Master Builders welcomes Productivity Commission’s call for tax cuts and red tape reform to boost productivity

Master Builders Australia has welcomed the release of the Productivity Commission’s interim report Creating a More Dynamic and Resilient Economy, which addresses corporate tax settings and regulatory burdens, two key areas for reform.

Master Builders CEO Denita Wawn said the Commission’s acknowledgement that our current corporate tax and regulatory systems are not delivering the best outcomes aligns with what industry has been saying for years.

The Productivity Commission recommends:

• Reducing the headline company tax rate to 20 per cent (from 30 per cent or 25 per cent) for companies with revenue under $1 billion.
• Introducing a 5 per cent Net Cashflow Tax, allowing companies to immediately deduct the full cost of capital expenditure.

“While Master Builders strongly supports the proposed company tax cut, further work will be required to assess the short, medium and long-term implications of pivoting to a combined company income and cashflow tax system for the building and construction industry.

“We will continue to work through the detail of the proposed cashflow tax to ensure it delivers real benefits for builders and supports investment in construction projects, while not increasing regulatory burden and the effective tax rate on business.

“This is an important first step in what must be a broader journey of tax reform including the detrimental impact of taxation on Australia’s ability to meet the Housing Accord targets,” Ms Wawn said.

Master Builders, as part of a coalition of leading business groups, has been calling for practical reforms that lift productivity, drive investment, and reduce the costs holding business back.

“Reducing tax and cutting red tape will help builders keep costs down, speed up delivery, and unlock new housing supply.

“Boosting business investment and productivity in construction is critical if we are to meet Housing Accord targets and put downward pressure on rents and home prices,” Ms Wawn said.

The interim report also delivers a clear warning on regulatory burdens, arguing that ‘Australia’s regulatory environment has become too restrictive’ and that government has ‘created a thicket of regulations and rules’.

Key draft recommendations include:

• Establishing a clear agenda for regulatory reform, backed by a whole-of-government statement committing to reducing red tape.
• Strengthening scrutiny of new regulations, including the appointment of an independent statutory commissioner to oversee the Office of Impact Analysis.
• Holding public servants accountable for delivering growth, competition and innovation through regulatory systems.

“These recommendations come at a critical time with businesses in building and construction drowning in compliance obligations and red tape,” Ms Wawn said.

“The Commission is right to call for a fundamental shift in how regulation is designed and applied.

“By cutting taxes, reducing red tape and supporting investment in construction, these reforms will help tackle the housing crisis head-on. They provide a pathway to build more homes, faster and at a lower cost, ensuring more Australians can access affordable housing.

“We will continue to work closely with our partners across the business community and government to build on these recommendations and deliver meaningful, sustainable tax reform that supports all businesses from small family builders through to larger companies while helping to solve Australia’s housing and productivity challenges,” Ms Wawn concluded.

Media contact: Dee Zegarac, National Director, External Affairs & Engagement
0400 493 071 | dee.zegarac@masterbuilders.com.au