‘Attractive in theory’: CA ANZ offers recommendations on productivity reform

CA ANZ has submitted recommendations to the Productivity Commission on four of its five interim reports in a move to work collaboratively towards a “stronger, fairer economic future”.

Before the Economic Reform Roundtable last month, the Productivity Commission’s five interim reports targeted creating a more dynamic and resilient economy, investment in cheaper, cleaner energy and the net zero transformation, harnessing data and digital technology, building a skilled and adaptable workforce and delivering quality care more efficiently.

In terms of tax, the commission suggested multiple reforms for the government to consider on the road to increasing the nation’s productivity, such as the net cash flow tax, which is continuing to receive mixed feedback and support.

CPA Australia revealed earlier this week in its own submission that it was not in favour of the proposed net cash flow tax, which CA ANZ took a similar position on, yet said there needed to be key refinements.

In its submission, CA ANZ dubbed the cash flow tax “attractive in theory” and stated it supported a move to a more efficient mix of taxes.

“However, transitioning to a cash flow tax would be complex and costly. The focus should be on modernising the existing framework to better support today’s economy. CA ANZ has concerns about this proposal. The costs and benefits need more consideration.”

Ainslie van Onselen, chief executive of CA ANZ, said the body was focused on outlining the impacts of tax reform strategies to the profession’s role in building a skilled and adaptable workforce.

“CA ANZ agreed that tax reform is needed to ensure our economy is strong and are advocating for the interim recommendations to take into account other significant tax settings, which affect business investment decisions for significant parts of the economy,” she said.

“We recognise the opportunity to develop a more streamlined corporate tax system for Australia. Our view is that any changes, along with their transitions, should not disrupt investment, financing, or regulatory stability. Additionally, understanding the cost implications of administering these changes is essential.”

The body noted the most important areas it would look to provide feedback and support to the Productivity Commission was in tax reform, red tape reduction, as well as data and digital technology.

CA ANZ group executive of advocacy, policy and government affairs, Damien Ogden, said: “The immediate opportunity for the government is to reduce the regulatory burden from the tax system. Minimising the number of announced but unenacted measures, as well as the timely enactment of legislation, is an efficient way to move us forward.”

As previously reported by Accounting Times, the professional accounting body has been increasingly proactive within the digital reporting space – pushing for mandating digital corporate reporting for large businesses.

CA ANZ’s reasoning behind the call was attributed to it being the “low-hanging fruit of productivity and economic reform”, and ninety per cent of the world’s major economies already doing it.

Van Onselen said CA ANZ strongly supported the Productivity Commission’s call for government action to make digital reporting the default for disclosing entities.

“This is the logical step forward and we strongly believe this reform will unlock productivity, improve accessibility to our capital markets and bring Australia in line with global best practice,” she said.

“The investment required for this transition is minimal compared to the potential billions in productivity gains and investment opportunities. It’s a clear and straightforward decision.”

Ogden said the body would continue to use its resources and knowledge to push the conversation.

“CA ANZ welcomes continuing the discussion on tax reform and other productivity boosting measures, and is confident that with continuing consultation, the government will be able to achieve its goal of ensuring Australia remains a strong player on the global stage well into the future.”