The Group of Eight Submission to Re:think: the Tax Discussion Paper
The Group of Eight (Go8) welcomes the opportunity to comment on Re:think: the Tax Discussion Paper. Please note that this submission represents the views of the Go8 network; member universities may also make their own, more detailed submissions.
The Go8 agrees that the nature and structure of the Australian economy is changing, and that it is timely to review the tax system to ensure coherence within a globally-connected, twenty-first century context. This submission will focus on the following issues raised in the discussion paper, which are pertinent to the effective operation of the higher education and research sectors both now and into the future:
- The Research and Development tax incentives
- Broadening the GST
- Dividend Imputation
- Treatment of the Not For Profit sector
- How Australian taxation incentives might better encourage innovation and entrepreneurship activities.
The Go8 also welcomes the broad nature of the Discussion Paper, especially the invitation to raise additional issues that are outside its scope. The Go8 would like to make the following broad points that should be considered as part of the taxation review:
- The tax review is one of a suite of government processes currently underway that have implications for the national innovation system. The Boosting Commercial Returns from Research; Industry, Innovation and Competitiveness Agenda and Federation White Paper will all also have an impact. We emphasise the need for consistency across these processes to ensure a coherence of overall approach.
- The Go8 welcomes the government’s commitment in the Tax White Paper to review the R&D tax incentive scheme in the broader context of reviewing the effectiveness of existing tax incentives for innovation, industry-funded research and collaboration with public research organisations. Ensuring that the tax system stimulates the creation of new high value knowledge-based industries will be critical to diversifying and strengthening Australia’s economy. The positive changes to the tax treatment of employee option and share schemes due to commence on 1 July 2015 is also welcomed. The Go8 is currently developing specific and practical policy recommendations to advance the engagement agenda, which we look forward to presenting later in the year.
- Universities are multi-faceted organisations which fuel the Australian economy in a multitude of ways. At its most basic level we train and educate the professionals of the future and explore the world through high quality research. However, focusing on this alone ignores the continual and more complex interactions between our organisations and Australian society. These can include the use of university expertise in the development of public policy or other community benefits; development of specific and targeted courses to address skill gaps in industry or government groups; or the provision of consultancy services around specific issues. It is important that reforms aimed at promoting certain activities do not have the unintended consequence of curtailing other, less visible, benefits.