A broad coalition of leading Australian industry groups and business associations has issued a joint statement expressing strong concerns over the Productivity Commission’s recent proposal to impose a new tax on business cash flow.
Representing a wide range of sectors — from company directors and petroleum marketers to telecommunications, tourism, banking, and farmers — the groups warn that the tax represents an untested, experimental approach not tried anywhere else in the world.
The signatories include the Australian Institute of Company Directors, Australasian Convenience and Petroleum Marketers Association, Australian Airports Association, Australian Banking Association, Australian Chamber of Commerce and Industry, Australian Energy Producers, Australian Industry Group, Australian Investment Council, Australian Retail Council, Australian Telecommunications Alliance, Australian Travel Industry Association, Business Council of Australia, Chartered Accountants Australia and New Zealand, CPA Australia, Corporate Tax Association, Council of Small Business Organisations Australia, Group of Eight universities, Insurance Council of Australia, Master Builders Australia, Minerals Council of Australia, National Farmers’ Federation, Property Council of Australia, Tech Council of Australia, and Tourism and Transport Forum.
The groups argue that this proposed tax increase threatens to exacerbate cost-of-living pressures for Australians, noting that while some businesses might gain, the risk is that all consumers and businesses will face higher prices for everyday essentials such as groceries and fuel.
They emphasise that the proposal effectively penalises some of Australia’s most productive companies and industries, which employ millions and provide vital goods and services across the country.
Central to their critique is the notion that any tax reform must be revenue neutral and form part of a comprehensive, holistic discussion.
They caution against introducing uncertain and potentially harmful measures when the Productivity Roundtable should instead prioritise practical reforms aimed at cutting red tape and improving regulation to lower costs and boost productivity.
While the joint statement acknowledges the Commission’s positive focus on reducing regulatory burdens, it rejects the notion that increasing taxes will stimulate investment or address lagging productivity in the economy.
The joint release, dated 1 August 2025, underscores the unity of business and industry leaders in calling for careful consideration of tax policy that supports economic growth without imposing new financial strains on Australian households or productive enterprises.
This unified industry stance comes amid the Productivity Commission’s broader agenda to reform corporate tax settings, which includes lowering the corporate tax rate for smaller companies and introducing this new 5 per cent net cash flow tax as a revenue-neutral offset.
However, the collective voice from these organisations highlights significant concerns about the potential negative economic impacts of this specific tax component.
The statement reflects a clear call for a balanced approach that fosters investment and productivity through regulatory reform rather than experimental tax hikes, advocating for stability and certainty in Australia’s economic policy environment.
