Appendix C - About the Business Tax Working Group

Date

Membership

Chris Jordan AO - Chair

Chris Jordan is a Fellow of the Institute of Chartered Accountants, the Taxation Institute in Australia, and the Australian Institute of Company Directors and is a Solicitor of the Supreme Court of New South Wales.

He is the Chairman of the Board of Taxation, which is an advisory body to the Federal Treasurer, and the Chair of the Committee for Sydney. He is also a board member of the Sydney Children's Hospital Foundation and the Bell Shakespeare Company. Chris was awarded the honour of Officer of the Order of Australia in the 2005 Queen's Birthday Honours list for high-level advice to Government.

Peter Burn

Dr Peter Burn, Director of Public Policy, Australian Industry Group (Ai Group), has extensive experience in taxation policy through his role at Ai Group since 2002 and as Director - Policy at the Business Council of Australia with particular responsibilities for taxation policy from 1997. Peter was also the Secretary of the Business Coalition for Tax Reform in the years around the Australia's New Tax System.

Frank Drenth

Frank Drenth has been in the role of Executive Director of the Corporate Tax Association (CTA), since 1998. The CTA represents the taxation interests of about 120 of Australia's largest companies. He is also Deputy Chair of the Business Coalition for Tax Reform, which brings together the views of the broader business community on tax reform issues.

Teresa Dyson

Teresa Dyson is a Tax Partner in Ashurst's Brisbane office, specialising in providing income tax advice on corporate and financing issues to domestic and international businesses. Teresa is a member of the Board of Taxation. She is also the National Chair of the Law Council of Australia, Business Law Section (Tax Committee) and, in that capacity, represented the Law Council of Australia at the Tax Forum. She is currently recognised as a leading individual in tax in Chambers Global 2012 and Best Lawyers 2012.

John Freebairn

John Freebairn holds the Ritchie chair in economics at the University of Melbourne. He has degrees from the University of New England and the University of California, Davis. Prior to joining Melbourne in 1996, his preceding career includes university appointments at the ANU, LaTrobe and Monash, and periods with the NSW Department of Agriculture and at the Business Council of Australia. John is an applied microeconomist and economic policy analyst with current interests in taxation reform and environmental economics.

Tim Lyons

Tim Lyons was elected as Assistant Secretary of the Australian Council of Trade Unions (ACTU) in August 2008. Prior to that, he was an official of the National Union of Workers (NUW) for over 13 years, and represented members in a wide range of industries, including logistics, food, plastics, oil and gas and general manufacturing.

Tim is also a member of a range of government committees, including in relation to superannuation, workplace relations and procurement. Tim is a Trustee Director of HESTA superannuation fund, a director of The Union Education Foundation and the Australian representative on the Global Unions Committee on Workers' Capital.

Rob McLeod

Rob McLeod was appointed Ernst & Young's Oceania Managing Partner and CEO in 2010 and was previously Ernst & Young's New Zealand Country Managing Partner. He has more than 30 years experience in corporate and international tax.

Rob has held a number of high profile roles in New Zealand including Chairman of the New Zealand Business Roundtable. In 2001, he conducted a comprehensive New Zealand government tax review - the McLeod Review. In 2009, he was appointed to the government-sponsored Tax Working Group and the Capital Markets Development Taskforce, both of which had a strong focus on tax reform. He was also a member of the New Zealand Government appointed Consultative Committee on Capital Gains Tax in 1989. He has been appointed to numerous government committees, the latest ones focusing on defence, infrastructure and Maori economic development.

Jennifer Westacott

Jennifer Westacott took up the role of Chief Executive at the Business Council of Australia in April 2011.

Jennifer has extensive policy experience in both the public and private sectors. She has held critical leadership positions as the Director of Housing and the Secretary of Education in Victoria, and most recently was the Director-General of the New South Wales Department of Infrastructure, Planning and Natural Resources. Jennifer was a Director and National Lead Partner at KPMG and provided advice and assistance to some of Australia's major corporations on climate change and sustainability matters, and provided advice to governments around Australia on major reform priorities. She previously chaired the Public Sector Performance Commission in South Australia, and was a member of the Commonwealth Grants Commission.

Rob Heferen

Rob Heferen is the Executive Director of Treasury's Revenue Group, which is responsible for providing advice and assisting in the formulation and implementation of government taxation and retirement income policies and legislation as well as providing information on material changes to taxation revenue forecasts and projections.

Terms of Reference

Objectives

  1. The Working Group will make recommendations on how the Australian business tax system can be improved to make the most of the challenges and opportunities arising from transformations in the broader economic environment, including the patchwork economy.
  2. The revenue neutral reforms to the business tax system will aim to increase productivity, while delivering tax relief to struggling businesses.

Scope

  1. The Working Group will focus on reform options that relieve the taxation of new investment:
    1. in the near term, by reforming the tax treatment of business losses; and
    2. in the longer term, by reducing the corporate tax rate further or moving to a business expenditure tax system, particularly an allowance for corporate equity.
  2. For its final reports, the Working Group will provide specific analysis of these business tax reform options, including:
    1. description of how these reforms options operate overseas and evidence on their effectiveness;
    2. potential priorities for reform, including transitional paths;
    3. worked examples of how these options would affect business taxpayers, including their financial and tax accounts;
    4. revenue integrity provisions, such as measures necessary to limit: the inappropriate claiming of tax losses; the equity allowance to new equity; and small and closely held businesses converting labour into business income;
    5. how the reform options integrate with the rest of the tax system now and in the future;
    6. impacts on national income and macroeconomic risks; and
    7. costings.
  3. The working group will also identify a range of off-setting budget savings from existing Commonwealth business taxation (or spending) measures. Changes to the GST should not be considered.
    1. The savings to be generated by the particular options will be costed by the Treasury in accordance with the budget rules.
  4. In developing its recommendations, the Working Group should have regard to the report of the Australia's Future Tax System Review and relevant international experience and expertise.

Timing

  1. The Working Group is required to provide the Treasurer with:
    1. an initial report on the proposed directions for improving the tax treatment of losses and offsetting savings in mid-November 2011;
    2. a final report on the treatment of losses and the offsetting savings in March 2012; and
    3. a further report on longer-term business tax reform options and offsetting savings by the end of 2012.

Consultation

  1. For its final reports, the Working Group should consult widely with industry and the broader community.
  2. The Working Group may establish technical sub-groups to consider specific issues or seek input from other sources of expert advice.

Support

  1. The Working Group will be supported by a Secretariat within Treasury.

Chronology

October 2011 - Business Tax Working Group established

  • The Working Group was established by the Treasurer to look at how Australia's tax system could be improved to make the most of the challenges and opportunities arising from the broader economic environment, including the patchwork economy. The Working Group's task is to be conducted in two phases:
    • Phase 1: consideration of reforms for the short-term, by improving the tax treatment of business losses.
    • Phase 2: consideration of longer-term reform directions for Australia's business tax system.

December 2011 - Interim report on the tax treatment of losses - released

  • The interim report explored the tax treatment of losses in Australia, in particular how this treatment affects Australian businesses' ability to respond to emerging challenges and take advantage of new opportunities presented by changes in the local and international economy. The report also outlined possible reform options that may increase business productivity, while delivering tax relief to struggling businesses.

February 2012 - Interim report on the tax treatment of losses - consultation

  • Submissions in response to the interim report closed in February.

March 2012 - Interim report on the tax treatment of losses - consultation

  • Consultation meetings were held between Working Group members and interested stakeholders throughout March.

April 2012 - Final report on the tax treatment of losses - released

  • The Working Group considers that loss carry back would be a worthwhile reform in the near term. However, the Working Group advised the Treasurer that it had not had an opportunity to explore the relative net-benefit of loss carry back compared with other business tax reforms.
  • The Working Group also recommended that the Government undertake further work to develop a model for reforming the same business test. The Working Group considers that further analysis and consultation is required before any conclusions can be drawn on possible savings options to fund reforms to the tax treatment of losses.

May 2012 - Budget announcement of loss carry-back reforms

  • On 6 May 2012, the Government announced that it would introduce a limited loss carry-back to the income tax law for corporate tax entities.

June 2012 - Focus on longer term reform of the business tax system

  • In June 2012, the Government asked the Working Group to prioritise consideration of a cut to the company tax rate accompanied by measures which fully offset the cost by broadening the business tax base.

    • • Also in June 2012, the Working Group released a consultation guide setting out how the Working Group planned to involve the community in its consideration of business tax reform.

August 2012 - Discussion paper on longer term reform of the business tax system - released

  • The Working Group released a discussion paper in August 2012 that sought views from stakeholders about whether a lower company tax rate funded by some specific base broadening options could deliver net benefits to the Australian economy.

September 2012 - Discussion paper on longer term reform of the business tax system - consultation

  • Consultation meetings were held between Working Group members and interested stakeholders throughout September.
  • Submissions in response to the interim report closed in September.