Govt won't be rushed on tax reform agenda

Prime Minister Tony Abbott is sticking to the government's timetable on tax reform, including a white paper within two years.

Prime Minister Tony Abbott

Prime Minister Tony Abbott is sticking to the government's timetable and commitments on tax reform. (AAP)

Frustration among businesses about the slow pace of tax reform is growing but Prime Minister Tony Abbott says he is sticking to the timetable and commitments he took to last year's election.

An annual survey by tax consultant BDO found nearly all respondents feared there was too much talk about reform by the federal government but not enough action.

BDO tax partner Mark Molesworth says the survey sends an overwhelming message to the government.

"The years of talk need to come to an end. The years of action must begin," he said.

Mr Molesworth said the survey found strong support for the GST to be included in any new tax discussions, even if it is "politically unpalatable".

But Mr Abbott is sticking to the promises he made during last year's election campaign - abolishing carbon and mining taxes and cutting the company tax rate in 2015 to 28.5 per cent from 30 per cent.

"The only thing we will do in this term of parliament when it comes to tax is what we said we will do prior to the election," Mr Abbott told reporters in Canberra on Tuesday.

"Obviously from time to time anomalies will come up and we will address them in the ordinary course of events."

But he remains committed to a tax reform white paper two years into his first term.

Its recommendations will be taken to the next election, due in 2016.

In a separate report, Deloitte Access Economics economist Chris Richardson believes taxes should be part of the government's attempts to repair the budget.

"All programs need to be assessed on merit, rather than just focusing cuts on the newest programs," Mr Richardson said.

"Taxes need to be on the table, too - it's dumb to pretend they can't be touched."

Mr Abbott's national Commission of Audit into government spending is due to present its first report to the government in early February but it has not been tasked to look at taxes.

However, the prime minister insists the government is committed to "lower, simpler, fairer taxes".

"In order to have lower, simpler, fairer taxes, you have obviously got to have the most efficient and effective administration," he said.

Businesses believe Australia's complex tax system is a drag on the economy.

Mr Richardson, in his latest business outlook, expects government cutbacks to address the budget black hole and cautious businesses and households, and the peaking of resource-related investment should keep economic growth slightly below a trend rate of 3.25 per cent through to late 2015.

While National Australia Bank's latest monthly business survey - also released on Tuesday - finds trading conditions jumping to their highest level in two and a half years, it still points to sub-trend growth pace.

The bank also questions the sustainability of the rise, given forward orders and employment remain weak.


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Source: AAP


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