Fed: Minchin says tax system still needs fixing

AAP General News (Australia)
08-22-2001
Fed: Minchin says tax system still needs fixing

CANBERRA, Aug 22 AAP - Australia's tax system remained a hurdle to attracting international
investment in research and development and in stopping top scientists heading overseas,
Science Minister Nick Minchin said today.

Senator Minchin said a top marginal tax rate which kicked in at the equivalent of about
$US30,000 ($A60,000) provided little incentive for the best and brightest to stay in Australia.

He said the issues of employee share ownership and share options, tax treatment of
US pension fund investment in venture capital and personal tax cuts needed further examination.

"There are some significant issues still remaining on the tax front if we are to maximise
our capacity to commercialise our great research base," he told a group of scientists
in Parliament House today.

"We have got to face up to how competitive the world is becoming and how out of line
our tax rates are becoming.

"We do need to look to further measures. There is a need in relation to the commercialisation
of our research to look at further personal income tax cuts."

Senator Minchin said tax remained an issue which would be pressed during the forthcoming
election campaign.

He disputed suggestions that personal income tax cuts would reduce the funding available
for science.

"It does seem to me that fundamental to building a knowledge economy is an internationally
competitive tax regime," he said.

"I don't think enough Australians understand that.

"You will not be able to retain the best and brightest in Australia. You will not be
able to bring back to Australia the best and brightest.

"And you will not get the requisite level of investment in commercialising our great
research base.

"When you tell young scientists that the top rate of tax in this country cuts in at
the equivalent of $US30,000 and at that point you will be paying 50 per cent of your income
in tax, then going somewhere else starts to look very attractive and that is a real problem
for us."

AAP mb/daw/ph/de

KEYWORD: TAX MINCHIN

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