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Bradbury defends business tax group


Assistant Treasurer David Bradbury has defended the federal government's decision to set up a business tax working group, even though it failed in its mission.

Last month, the group reported a cut of two to three percentage points to the 30 per cent rate could be funded through changes to the tax treatment of interest, capital allowances and research and development spending.

But despite consulting with 20 business groups and receiving more than 80 submissions, it could not recommend a specific revenue-neutral way to lower the tax.

Mr Bradbury on Tuesday told a tax conference in Melbourne he disagreed with claims the working group had been "set up to fail".

"These criticisms also seem to rely upon the notion that the broader community will accept higher taxes on non-business taxpayers or reductions in government expenditure, and consequently fewer government services, in order to fund a company tax cut," he told the CCH Corporate Tax Managers Network meeting.

He said a business taxation review in the 1990s was subject to similar constraints and came up with a package to broaden the base and cut the company tax rate.

"It is difficult to remember a time in Australia when the corporate rate was cut without being accompanied by a broadening of the business tax base," he said.

Mr Bradbury said while the government was disappointed there was no eventual consensus position, the working group had played a role in the introduction of the new loss carry back measure announced in the May budget.