SYDNEY (Reuters) -Australia’s treasurer on Sunday praised a report by the nation’s Productivity Commission (PC) that urges lower corporate tax rates in a bid to spur foreign investment.
The draft report, “Creating a More Dynamic and Resilient Economy”, released in July, recommended reducing the tax rate from 25% to 20% for companies earning less than A$50 million ($32.44 million) and from 30% to 20% for those earning A$50 million to A$1 billion.
The changes would help attract more overseas firms to invest in Australia, the report by the government’s advisory body on economic, social and environmental issues said.
When asked by the Australian Broadcasting Corporation about the PC report on Sunday, Treasurer Jim Chalmers said, “It’s good that this proposal is out there”.
“The PC chair and her colleagues have tried to incentivise investment in a way that we can afford,” he told ABC television, adding that “I am open to tax changes which incentivise investment if we can afford to do it”.
He said the plan was part of talks this week at an economic reform roundtable in Canberra. The meeting included business leaders, the union movement and civil society groups.
“There was a lot of discussion at the roundtable about the draft recommendations,” Chalmers said. “I think that’s a really good thing.”
Chalmers’ comments come after the centre-left Labor government in June said it would consider tax reforms to boost productivity and build economic resilience amid a spike in global volatility.
The nation’s central bank this month slashed its forecasts for economic growth as it downgraded the outlook for productivity, implying lower living standards and incomes for the country’s 27 million residents.
($1 = 1.5413 Australian dollars)
(Reporting by Sam McKeith in Sydney; Editing by Christopher Cushing)
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