Tax Reform in Australia is essential. The Intergenerational Report was a wasted opportunity because it focused on a political agenda. We must have genuine and informed debate around the rate and breadth of the GST, around stamp duties and around the other options within the tax and transfer system, like setting limits on negative gearing, having means testing linked to net wealth, and what about death taxes, or means testing aggregate household assets to reduce the recent phenomenon of the millionaire aged pensioners?
We need to be looking over a fifty year period and considering such issues as demographic shifts, population projections, long-term impacts of climate change.
There was widespread support for a mining tax at the beginning, and indeed many in the mining community said that they understood that they should pay more tax, but the mining tax was neutered by politics. The carbon price is another example and also negative gearing. We need to outline the problem with negative gearing. First identify who are the winners and who are the losers and what can we do about it. Then present a range of “real” options and document the evidence around those options.
There are many examples of what an intelligent forward thinking government could do, such as implement a system that promotes the investment of superannuation in Australian infrastructure projects or use the tax system to support investment in renewable energy technology.
The community should demand that our political parties broaden the agenda to consider some of those bigger economic and social challenges and ask the question of the role of the tax system in that context.
If our politicians could do this and have the cajones to implement the “real” decisions we would have a country significantly different to that where Australians are being led via short-term political expediency.