We must encourage entrepreneurs - Ridout

The Government's tax forum should look to encourage entrepreneurs because we can't rely on agriculture and mining, says Heather Ridout.

Heather Ridout

AUSTRALIAN Industry Group (Ai Group) boss Heather Ridout says she next week's tax forum should look at ways to encourage entrepreneurship because Australia can't just rely on agriculture and mining.

The Ai Group chief executive says the tax system should also drive productivity and competitiveness in the economy.

The tax forum in Canberra, on Tuesday and Wednesday next week, should be looking to take action on both company and personal income tax, Ms Ridout told ABC TV today.

"The company tax rate is too high for a small economy like ours. The rest of the world's is coming down. We need to reduce ours," she said.

The Ai Group's list of top priorities include reducing the company tax rate to 25 per cent, from the current 30 per cent, as recommended by the Henry Tax Review.

Ms Ridout was a member of the review panel chaired by former Treasury secretary Ken Henry.

She said tax reform must recognise that some sectors of the economy were doing it tough in a "lopsided economy" and had a hard time attracting capital and investment.

"So we need to beef that up," Ms Ridout said.

Small business also needed support and there should be a push to encourage investment in early-stage enterprises," the Ai Group boss said.

"We have got to start to create our future.

"We can't just dig it out of the ground and grow it, however important that is.

"I think Australia needs to actively embrace this agenda so we can become the great knowledge-based democracy in Asia."