Politics Now What's tax reform got to do with productivity? | Insiders on Background
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Jun 20, 2025 
Danielle Wood, Commissioner at the Productivity Commission, shares her insights on tax reform's critical role in shaping economic productivity. She discusses how tax structures significantly influence investment and labor dynamics. The conversation highlights the burden of high housing costs on young people's job choices and investment decisions. Wood also addresses the complexities of reform proposals and the need for effective public communication in overcoming media scrutiny. Lastly, she emphasizes balancing stakeholder interests while navigating the future of taxation.
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Tax's Role in Productivity
- Tax influences productivity by affecting investment, work incentives, and resource mobility.
- High taxes can reduce work incentive and limit economic dynamism over time.
Corporate Tax Impacts Investment
- Business investment has declined as a share of GDP since the global financial crisis.
- Corporate tax rates, especially how investments are treated, strongly impact business investment incentives.
Targeted Corporate Tax Incentives
- Cutting the headline corporate tax rate alone may increase profits without boosting investment.
- Targeted tax incentives like investment allowances can better stimulate productive reinvestment.