But it seems that one of the reasons for the complexity is that Australia aims to target deductions to those who need / deserve them, ranging from business people to low income earners.

One example: starting a fledgling business I was delighted to learn that it’s paltry earnings in the first year meant I got an “entrepreneur’s allowance”.. not much, but in an environment where no one is a venture capitalist it was nice that the Australian government recognised I was giving it a go.

Unless you’re making or retailing food or something the GST exemptions aren’t a huge issue. I do my own accounts, use the ATO’s own accounting software (admnittedly fairly rudimentary, but free and tailored to their reporting requirements) and their online lodgement tool which “interviews” you to help make sure you get your taxes right.

Of course bigger businesses would have much larger compliance costs, and state taxes are a pain, especially when they’re wasted by incompetent state governments.

But I don’t think it’s quite as clear cut as the impression you’ve been given Lynn. Inertia plays a big role in these decisions, whether acknowledged or not. Easier to stay with the status quo unless pushed.

And a higher corporate tax rate could well be that push…

Our stock exchange is a joke, when did we last have a substantial new listing?

And it’s simplistic to look just at the corporate tax rate. There’s payroll tax etc.

Various businesses I’ve been associated with have looked at setting up operations in aussie. They’ve usually balked at the higher rates of effective business taxation. You can get around a lot of it with a good enough accountant. But that usually costs as much as you save.

The effective rates of tax combined with the tax compliance costs for businesses in aussie are somewhat higher than they are here.

Taxing business profits essentially taxes the money that is left in the business that would otherwise be used for funding growth, paying back debt etc.

Money that is taken out of the business (dividend, wages etc) is then taxed as income at the ‘normal’ rates.

In a nut shell the reason the government want to align the Australian and New Zealand rates is to stop the drift of companies to Australia, attracted by a (potentially) lower tax rate.

It makes you wonder. Perhaps countries with well educated and healthy citizens and properly funded infrastructure function better?