Calls to cut red tape, corporate tax ahead of budget
A new ranking for business investment competitiveness has placed Australia near the bottom for tax and regulation; businesses say these issues need to be addressed to increase productivity and improve living standards.
The findings of the Business Council’s Global Investment and Competitiveness Index, released on Tuesday, are strengthening calls for Chancellor Jim Chalmers to deliver ambitious tax reform and take bold action on red tape ahead of the May budget.
Although Australia is near the top for trading environments, rule of law and energy, it falls to 21st out of 42 countries for overall investment competitiveness, ranking 37th on regulation and 38th on business taxation and investment restrictions.
Business Council chief executive Bran Black hoped the index would shed light on changes Australia could make among the top 10 destinations for productivity-boosting business investment.
The reemergence of conflict in the Middle East, threatening global oil supplies and the economy, has only made this task more urgent, he said.
“Ultimately, the environments that are assessed in this index are all environments that are entirely under Australian control,” Mr Black told AAP.
“In times of uncertainty, with global conflict ahead of us, the best we can do is control things within our control so we can be as resilient as possible.”
Dr. Since his economic roundtable in August 2025, Chalmers has made moves to streamline red tape, including instructing regulators to reduce regulatory complexity and creating a single front door to make it easier for trusted foreign investors to get approval.
Mr Black said businesses were already feeling the benefits but employer groups wanted the government to go further by setting a target of reducing regulatory burden by 25 per cent by 2030.
According to a report published in November by the Australian Institute of Company Directors, the bureaucracy boom in recent years has cost Australian businesses and the economy $160 billion, or 5.8 per cent of GDP; this rate was 4.2 percent of GDP in 2013.
Mr Black also called for holistic tax reform to encourage businesses to invest more.
He said Australia’s 30 per cent corporate income tax rate on large businesses was becoming increasingly competitive compared to peer economies, making it harder to attract increasingly mobile global capital.
Mr Black argued that allowing businesses to lower their cost of capital more easily through investment allowances, immediate spending or reforming research and development incentives would encourage more investment and boost GDP growth in the long term.
He said it would serve a similar purpose as the Productivity Commission’s proposed net cash flow tax, without increasing the statutory tax rate for large businesses and further reducing Australia’s competitiveness.
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