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Sussan Ley becomes the first female Liberal federal opposition leader

Sussan Ley becomes the first female Liberal federal opposition leader

The Guardian13-05-2025
Sussan Ley has become Australia's first female federal opposition leader and the first woman to lead the Liberal party, beating Angus Taylor in the race for the Liberal leadership. She won against Taylor 29 votes to 25. Queensland MP Ted O'Brien has won the deputy leader position in the Liberals, with 38 votes. Guardian Australia's Matilda Boseley explains
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ABC issues gag order on 'activist' staff pushing their own agendas on social media after Antoinette Lattouf debacle
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ABC issues gag order on 'activist' staff pushing their own agendas on social media after Antoinette Lattouf debacle

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IIt's time Australia ditched the ‘winners and losers' mentality and built an economy that's best for us all
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IIt's time Australia ditched the ‘winners and losers' mentality and built an economy that's best for us all

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How do we decide if a tax is good or bad? And which ones are ‘damaging' Australia's economy?
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Sign up: AU Breaking News email Speaking at the National Press Club this week, Danielle Wood, the chair of the Productivity Commission, explained that 'generally, anything that switches out higher cost, higher economic-drag taxes for lower cost, more efficient taxes will give you a productivity dividend'. 'Equally, anything that broadens the base of a tax, which winds back concessions but then reduces the rate, will give you an economic kicker.' Four of the five least efficient taxes are at state and territory level. This makes it difficult to coordinate shifts away from more damaging but highly lucrative taxes. The 'worst' taxes on Murphy's measure are the land tax on investment properties (92c of economic damage for every $1 in revenue raised), followed by stamp duties on the purchase of homes (74c) and taxes on insurance (69c). Wood said it was 'very clear' from modelling that 'stamp duties stand out as kind of exceptionally economically damaging taxes'. When experts talk about switching from inefficient stamp duties to a land tax, they are talking about a broad land tax that applies to all homeowners. Murphy says a broad land tax is equivalent to municipal rates – which, as the analysis shows, is a very efficient tax (a 4c offset in extra economic welfare per dollar of revenue raised). Efforts to transition to a more stable and less distortionary land tax have proved a step too far for even the most willing of state leaders. That's why any commonwealth-led discussion on tax reform has to include the states and territories, Bartos says. 'The only way to get the states on side is if you compensate them,' he says. 'Probably the only way to do that is to increase the GST rate or broaden its base' to include excluded items such as fresh food, education and health services. 'Broadening the GST would have the added benefit of simplifying the system.' Luke Yeaman, the Commonwealth Bank's chief economist and a former Treasury deputy secretary, says there is theoretically a strong case for using increased GST revenue to pay for income tax relief – a switch that has wide support among many experts. But cash-strapped states were unlikely to want to make this deal with the commonwealth. 'If you want lower income taxes, you'd have to do some other broader deal with the states, for example, around health funding or education funding, where you agree to provide less on the health and education side, and they claim the extra GST revenue,' he says. 'I think that proves very difficult at the moment in a world where the states are cash-constrained.' Yeaman agrees there could, however, be scope to use any increase in GST revenue to pay for states to get rid of inefficient taxes such as stamp duties. While state-level mining royalties schemes are lucrative for governments such as Queensland, Murphy's analysis shows they are much more inefficient than federal mining 'rent' taxes, which target excess profits. The petroleum resource rent tax, for example, has an offsetting 8c for the economy for every dollar raised. That's in part because foreign owners of the gas companies pay the tax, Murphy says. Bartos explains that 'the problem with royalties is basically you are taxing production, and so that acts as a direct disincentive'. 'A rent tax taxes super profits over and above normal profits, and in that sense they don't distort production at all. That makes them a much better form of tax.' Bartos' high level verdict on Australia's broad tax settings echoes the expert consensus: 'Australia's tax system is weighted too heavily to taxing income and not wealth. 'That encourages people to salt away wealth in unproductive things.' Labor is already chipping away at overly generous tax concessions for Australians with more than $3m in superannuation. But it has balked, at least so far, at suggestions for trimming tax breaks for residential property investors, which also overwhelmingly favour the rich. 'Sadly, the least likely to be on the agenda is inheritance taxes,' Bartos says. 'That doesn't distort behaviour – people are not going to put off dying because they have to pay tax. 'And it actually is a very efficient tax to levy and Australia is really unusual to be one of the few countries to not have some form of inheritance tax. It is very much a political no-no in Australia.' Patrick Commins is Guardian Australia's economics editor

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