The Productivity Commission has reinforced its call for a controversial hybrid corporate tax system, including a net cashflow tax, aimed at driving business investment across Australia.
The Commission's latest report, part of a series of five inquiries launched in December 2024, makes 47 recommendations to reduce regulatory burdens by $10 billion and enhance productivity.
Under the proposed tax model, small and medium-sized businesses earning under $1 billion would face a 20% tax rate, while larger firms would be taxed at 28%, with an additional 5% net cashflow levy applied across all companies.
The Commission projects the reform could lift GDP by $13 billion (0.7%), increase investment by $10.2 billion (2.2%), and raise labour productivity by 0.5%.
Deputy Chair Alex Robson said the Commission is "confident it is the best revenue-neutral option for improving investment" and has also examined alternative measures such as partial asset write-offs and corporate equity allowances.