The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
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Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

11 December 2011

NO.153

Business Tax Working Group - Interim Report on The Tax Treatment of Losses

Today I am pleased to release the Business Tax Working Group's Interim Report on the Tax Treatment of Losses for public comment.

Following the Tax Forum in October, the Government established the Working Group to look at how our tax system can best help businesses increase productivity and respond to the pressures of a changing economy.

The Working Group, which includes representatives from business, academia and unions, has found merit in further exploring reforms to business tax losses and seeking community feedback on specific reform proposals.

Reforming the tax treatment of losses may be one way to encourage investment in Australia, particularly in struggling businesses, leading to higher productivity and wages.

Improving the treatment of losses could help businesses going through periods of losses, such as start-ups and infrastructure builders, as well as those businesses undergoing restructuring, in volatile industries or outside large corporate groups.

Of course, any reform proposals that may be recommended by the Working Group will also be funded by savings from within the business tax system.

I encourage businesses and the wider community to make submissions on the issues and ideas canvassed in the interim report, which will help inform the Working Group's final report on the tax treatment of losses expected in March 2012.

In the longer term, the Working Group will focus on business tax reform options such as a further lowering in the corporate tax rate or moving towards a business expenditure tax by, for example, providing an allowance for corporate equity.

The Working Group's interim report on the tax treatment of losses is available on the Treasury website. Consultation closes on 3 February 2012.

CANBERRA
11 December 2011