Take a look at Australia's tax challenge in five slides

1. Australia’s tax challenge
Taking a look in five slides
April 2015

2. The world is changing
2
Much has changed in 40 years.
Our once remote, heavily-protected
economy and the Australian dollar are
now integrated into the dynamic global
economy.
Forty years ago we mostly lived, worked,
produced and purchased locally.
That’s no longer the case.
A big question for every country when it
comes to tax, is where income and
profits can and should be taxed.

3. Physical business assets are less important
The value of a business
used to be mostly physical
assets (“tangibles”) such as
land, buildings and
machines.
Today, more and more
business value comes from
patents, trademarks,
copyrights, brands and
ideas, which can be located
anywhere in the world.
These are referred to on
company balance sheets as
“intangibles”.
3
17
84
83
16
-
20
40
60
80
100
-
20
40
60
80
100
1975 2015
Per cent
Components of S&P 500 market value
Source: Ocean Tomo . Data for 2015 are at 1 January 2015.
Intangible assets
Tangible assets

4. -1
0
1
2
3
4
-1
0
1
2
3
4
1980s 1990s 2000 to 2013 2014 to 2025
Net foreign income Labour productivity
Labour utilisation Terms of trade
Per capita income growth
Percentage points contribution, annual average
Projections
End of
mining boom
Due to
mining boom
Increases in
female
participation
Helped by
economic reform
Australia’s economy is changing
Today, Australians produce
twice as much in goods and
services for each hour worked
as they did in the early 1970s.
To protect our future living
standards we must continue to
increase our productivity. This
is about driving investment and
working smarter.
4
Sources of growth in real national income per person
Can we lift
productivity
further?
Source: ABS, Australian National Accounts, and Treasury projections.

5. Capital is global and mobile
Corporate tax rates have
fallen worldwide.
Now, businesses and
investors have more choices
about where to locate their
activities, assets and
investments.
Business and investment
decisions in this global
marketplace can be impacted
by country-based tax rates.
5
Trends in corporate tax rates in selected economies
10
15
20
25
30
35
40
45
10
15
20
25
30
35
40
45
2000 2002 2004 2006 2008 2010 2012 2014
Per cent
Australia Canada United Kingdom Singapore China
Source: OECD, Tax Database – Taxation of Corporate and Capital Income; KPMG, Corporate tax rates table, Hong
Kong Tax Competitiveness Series, Corporate Tax Rate Survey: An international analysis of corporate tax rates from
1993 to 2006.

6. Australia’s population is changing
Australia’s population will grow and change over the next 40 years. Today there are an
estimated 4.5 people aged 15-64 for every person aged 65 and over. By 2055, this is
projected to nearly halve, with 2.7 Australians of traditional working age to people aged
over 65. This relative decrease in the number of those who pay most personal income
taxes will put pressure on the current tax system to fund services.
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