Today I am releasing the independent Business Tax Working Group's Final Report on the Tax Treatment of Losses.
The Business Tax Working Group, chaired by Mr Chris Jordan AO, was established following the Government's Tax Forum in October 2011 to examine what kind of business tax system will best support Australia's future growth prospects.
The independent Working Group's report progresses the very constructive policy debate at the Tax Forum about making sure that the Australian tax system supports businesses currently facing challenges in the patchwork economy.
The Working Group has recommended that loss carry back would be a worthy reform. Such a proposal would help struggling businesses adjust to the challenges and opportunities of the patchwork economy by improving their cashflows when they invest.
I would like to thank all the members of the Working Group for their contribution to this important debate. This is the first of two reports and I look forward to receiving the Working Group's second report at the end of 2012 on longer‑term reforms for the business tax system.
As part of the Government's commitment to fiscal responsibility, the terms of reference for the Working Group required it to identify savings from the business tax system to offset the cost of proposed reforms, and to consult widely with industry and the broader community.
The Working Group has identified four savings options, which they undertook consultation on, but also recommended that further examination and consultation be undertaken.
A number of businesses have already raised with me their views on some of the options raised by the Working Group, and I look forward to further discussions and public debate following the release of this report about how we might reform the business tax system in the nation's interest so that it better supports business' changing needs.
The work of the independent Business Tax Working Group – and the highly successful Tax Forum that gave rise to it – follows on from the wide-ranging tax reform agenda being delivered by the Gillard Government.
Among many other important measures, the Government has announced a reduction in the company tax rate, along with a significant tax break for small business, to help those Australian businesses which face challenges in our patchwork economy.
The report can be accessed on the Treasury website.