Australia needs significantly lower company taxes

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Image by .nele via Flickr

I’m hoping to re-read the books that I have in my library written by Clayton Christensen.

Mr Christensen is a professor at Harvard Business School who writes about business topics covering disruptive technologies and process. A theme that he raises throughout this books discusses companies that need to be competitive and importance of being a low-cost producer.
In an earlier blog post , I discussed America becoming the low-cost producer.
In turn, I can’t see how Australian companies will be either economically competitive, let alone a low-cost producer against their international competitors anytime soon.
Whether it’s the strong AUD,  compulsory superannuation burdens for employers, rising wages, tight labour markets, higher commodity prices leading to higher product input costs, increasing regulation, tighter lending practices and higher borrowing costs; it is difficult to make a positive case, especially for exporters.
Company taxes are on the current political agenda and should prove to be an interesting debate.
Low corporate taxes are imperative to staying competitive. It would serve Australia well to consider a significantly lower corporate tax rate, not to stimulate the economy but to stay ahead of a looming episode of being uncompetitive.
Whether it’s money management firms or mining companies, sometimes the search for a lower tax tax domicile begins with a “dual listing” on a foreign stock exchange, as the company cites the need to attract different types of capital.
Over the next decade, I expect to see more Australian companies moving their legal domiciles to offshore jurisdictions similar to what various U.S. and U.K. firms have done in the preceding decade.
There is more to our economy that buying cheap electrical goods and international internet shopping.
Stay tuned !
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