State of the Nation – economic update: BDO Comments
13 May 2020
Updated 13 May 2020
Mark Molesworth (BDO Tax Partner) was quoted in the AFR today in the ‘Letters to the Editor’ section (‘Time for some real tax reform’) requesting tax reform in a post COVID-19 environment.
According to Mark, “… we keep hearing that business as usual will not be the same post-pandemic and we are all going to have to adapt to the “new normal”. Why, then, would anyone expect the tax system to remain the same? We need to rapidly reform our tax system; not just adjusting the current levers but actually taking the hard decisions about who and what bears tax.”
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Responding the Treasurer’s address to Parliament today (12 May, 2020), BDO Australia Tax Partner, Mark Molesworth said:
“Treasurer Frydenberg’s economic update, shows the scale of the economic shock we are now facing.
“To the end of March, the underlying cash deficit was $22.4 billion, $9.9 billion higher than forecast in the December MYEFO.
“Filling the gaping hole in the budget will be the number one task for all tiers of Governments, and real reform to our tax system would be a good place to start.
“We know there is no such thing as ‘business as usual’post-COVID19 and we all have to adapt to a ‘new normal’.
“So it should be expected that the tax system also needs to adapt.
“This can be done by taking a good, hard look at reforming our tax system; not just adjusting the current levers but actually contemplating the hard decisions relating to: Capital Gains Tax, Tax Concessions, GST rate and base, Hybrid mismatch rules and Superannuation.
“Reform must be done swiftly – which has been the case before, as shown by the implementation of GST inside an 18-month timeframe.
“Tough times require tough decisions.”
The Treasurer confirmed that an updated economic and fiscal outlook will be provided in June, with the 2020-21 Federal Budget to be delivered on 6 October 2020.