Proposed tax law changes will “constrain future investment” as “tax deductions for building depreciation is a critical factor for investors”, according to Accommodation Association of Australia chief executive Richard Munro.

Mr Munro said the Business Tax Working Group’s plan to reduce or eliminate the rate of building depreciation would have a detrimental effect on Australia’s accommodation industry.

“Taxation changes such as those which have been proposed will jeopardise investment and place at risk the stretch goal in the ‘2020 Tourism Industry Potential’ blueprint of 40,000 - 70,000 new accommodation rooms in Australia by 2020,” Mr Munro said.

“It is vital that the Business Tax Working Group abandons its building depreciation proposals or at the very least, carves out tourism accommodation infrastructure from them.”

Mr Munro said there is a direct link between the room numbers, accommodation standards and investment.

“All of the building depreciation options which have been put forward would constrain future investment in hotel construction and refurbishment,” Mr Munro said.

“Should it be necessary, the Accommodation Association is planning to formally communicate to the Federal Government and the Opposition the importance of rejecting the proposals.”