The Liberal Party is often described as the ‘party of big business’, but a new paper shows this is not quite accurate.

In fact, on many issues big business is more progressive than the party that supposedly represents them.

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A new survey by accounting firm KPMG finds that on three key issues – negative gearing, superannuation tax concessions, and budget deficits – the business community is on a completely different page from the Abbott government.

That is not to say, of course, that Australia’s senior executives and company directors are misunderstood socialists.

Their main wish for tax reform, according to the survey, is to pay less income and company tax. And they want lower-income earners to help pick up the slack with a higher GST.

If not big business’s, then whose interests is Mr Abbott serving? Photo: Getty

They also want to hang on to the benefits they receive through franking credits, despite the cost to Treasury and the distorting effect it has on business behaviour.

Above all, big business executives value efficiency, competitiveness and simplicity in a tax system – all qualities that free up businesses to make money. But they also at least pay lip service to equity, which they value far more highly than having a ‘balanced budget’ (i.e. no deficit).

Negative gearing

The majority – 64 per cent – of the 222 executives and directors who took part in the survey said negative gearing should be limited in some way, despite the rules benefitting wealthier Australians.

KPMG used this as the basis for the recommendation that capital gains be taxed at a discount of 25 per cent, rather than 50 per cent.

At the moment, because capital gains are so heavily discounted, it makes running an investment property at a year-to-year loss and claiming the loss as a tax deduction very worthwhile.

The Abbott government has repeatedly rejected the idea of limiting negative gearing.

Superannuation tax concessions

If the Abbott government follows NSW premier Mike Baird’s lead and moves to increase the GST, super tax concession will be a major stumbling block.

Trying to justify taxing the poor more, while refusing to touch huge, disproportionate and unnecessary concessions to the nation’s wealthiest will be very difficult.

But while Tony Abbott has explicitly ruled out ever touching super tax, the business community is more open to it. According to KPMG’s survey, 60 per cent believe there should be some reductions in super tax concessions, while 67 per cent believe there should be a review into the objectives of the super system.

From this, KPMG recommended that before any change be made, there should be such a review.

Grant Wardell-Johnson, leader of KPMG’s Australian Tax Centre, said that while tax concessions clearly do favour the high end, a review is necessary so that super does not remain fair game for cash-strapped governments.

Given debt is such a central part of financing a business, it’s hardly surprising the business community has a relaxed attitude to government debt – in stark contrast to Mr Hockey. Photo: AAP

Budget deficits, government debt

Treasurer Joe Hockey’s attitude towards government debt is reactionary: he doesn’t like it, but if he can’t get spending cuts through parliament, he has no option but to keep borrowing.

But the business community has a different take. According to KPMG’s survey, having a balanced budget is very low in its list of priorities, with 55 per cent of respondents giving it a negligible mention.

One respondent said: “A balanced budget is required over the business cycle but is not necessary for each year. Removal of taxes that raise relatively insignificant amounts will improve simplicity and efficiency and can be offset by minor increases in other taxes.”

In other words, if a tax reform reduces revenue over the short-term, but improves productivity (and thus tax revenue) over the long-term, then it is worth backing up with increased government borrowing.

While this is clearly a self-serving position on the part of business, it is also a major departure from the government’s position that debt and deficit are universal evils.