DJ Australia's Government To Review Tax System -Treasurer

CANBERRA, May 10, 2008 (Dow Jones Commodities News Select via Comtex) -- -- Australian Treasurer Wayne Swan said Sunday the federal Labor government has commissioned a comprehensive review of the country's taxation system, including company taxes.

The review, headed by Treasury Secretary Ken Henry, may placate business groups calling for the recently elected center-left government to unveil cuts to company taxes when it hands down its first budget May 13.

"We think a modern economy needs a modern tax system, particularly given our situation in the world. A modern tax system needs to be efficient. It needs to be internationally competitive," Swan said on Channel Nine television's Sunday program.

"We will look at everything. We'll look at personal taxation. We'll look at the transfer payment system. We'll look at how that affects individuals, how is affects families, how it affects retirees. We'll look at the company tax system, and we'll also look at all of the implications, say, of an emissions trading system for taxation as well," he said.

Also on the review panel are Heather Ridout, chief executive of business lobby Australian Industry Group; Professor John Piggott from the University of New South Wales; Greg Smith, a former officer in the Tax Department; and Jeff Harmer from the Families Department.

The Australian Industry Group, in a pre-budget submission, had called for a phased reduction in the company tax rate to 25% from the current 30% by 2010, to compensate business for the negative impact of climate change policies, including plans to introduce an Emissions Trading Scheme in 2010.

But Swan Sunday ruled out any changes to goods and services taxes, or GST, and the tax on pension fund savings, known locally as superannuation.

Tuesday's budget will also outline details of a plan to increase taxes on luxury autos to 33% from 25% currently. Luxury autos account for around 10% of Australian vehicle sales annually.

-By Rachel Pannett, Dow Jones Newswires; 612-620-80901; rachel.pannett@dowjones.com

(END) Dow Jones Newswires

05-10-08 2313ET

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