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A comprehensive new report on Australia’s tax system has set a roadmap for reform and discusses the need to examine the Goods and Services Tax (GST), the income taxation of savings, superannuation taxes and the future of the company tax for multinationals and small business.
The report, released on Monday, also looks at key directions for State taxes.
Written by the Tax and Transfer Policy Institute (TTPI) at Crawford School, the report is a stocktake of what has been achieved in the five years since the Henry Tax Review, and the challenges ahead.
TTPI Director Professor Miranda Stewart said it was time for a considered debate about the future of the tax system.
“We pay for government with our tax system – we need to keep it strong while allowing individuals to flourish,” she said.
“Tax reform should aim to support sustainable and inclusive economic prosperity, promote fairness and build resilience in the face of economic, social and technological change.
“We need the tax system to support increased and more productive work by young people, women and mature age workers.”
The report, A stocktake of the tax system and directions for reform, is released ahead of the release of the government’s latest Intergenerational Report on the ageing population, and as the government considers its first issues paper as part of its Tax White Paper.
Professor Stewart said it was crucial for Australia to discuss tax reform.
“The system should be examined as a whole including short and long-term consequences of reform and transition,” she said.
“The GST raises less than 13 per cent of total tax and barely covers the nation’s growing health costs. Federal and State governments keep squabbling about how to share the GST, but it’s most important to strengthen our only broad-based consumption tax while keeping progressivity through our income tax and transfers.”
Former Liberal Party leader and TTPI Chair Professor John Hewson said the report provided a picture of Australia’s tax system and what it could look like in the future.
“Five years after the Henry Review, we can take stock and build on the general directions for reform. This report will provide a valuable resource for all participants in the national conversation we have to have on reforming our tax system to fund the government we want.”
The TTPI was set up as a national institute at the Crawford School of Public Policy to do independent research on the tax and transfer system. The establishment of TTPI was a key Recommendation of the Henry Review.
Copies of the report are available at https://taxpolicy.crawford.anu.edu.au/files/uploads/taxstudies_crawford_...
Read more: Miranda Stewart on The Conversation: https://theconversation.com/its-time-to-choose-what-kind-of-tax-system-w...