Editorial: As momentum finally builds, Treasurer Jim Chalmers must act on the tax reform
For once, there could be some momentum behind those calls, with Treasurer Jim Chalmers sounding a positive tone and saying the right things ahead of a highly-promoted economic reform roundtable, for which there are high hopes.
'Of course we are interested in ways to simplify the tax system.,' he said during the week.
'Ideally, people will come with views about how we simplify the tax system and where that fits more broadly into our efforts on productivity.'
The Productivity Commission has also published submissions to its inquiry into economic dynamism and resilience, including from the nation's biggest company, the Commonwealth Bank, which is urging a greater clampdown on multinational tax avoidance.
'It will be critical that we find mechanisms to ensure that multinationals do not profit-shift offshore, but instead contribute to Australia and pay their fair share of tax,' the CBA said. 'This is particularly true for software-based businesses, which continue to grow significantly faster than the economy.'
Australia's tax take — the way government funds its spending on services the nation enjoys and needs — has been for too long now too reliant on personal income taxes compared to other forms of revenue. In the 2023-24 financial year, income tax was $331.5 billion, with the strong labour market pushing that figure 11.7 per cent higher compared to the year before.
Productivity Commissioner Danielle Wood, in her former capacity as head of the Grattan Institute think tank, previously explained various taxes cost the economy in different ways — that some come at the cost of economic activity and some cost the system more than they actually collect.
Stamp duty on property purchases remains the bugbear of many academics, but few State governments will willingly accept reform in that area given how much revenue it yields.
With a projected decline in the number of workers, Australia needs to reform its tax system to ensure it's effective beyond relying on income tax. This concern is even more acute when considering the big expenses facing the country: Medicare, the NDIS, aged care and defence, and when considering the Federal Budget is in structural deficit.
To this end, a raft of options should be on the table, with big business, key lobby groups and research institutes attending the reform roundtable next month. Though tempting to just write it off as another gabfest (and the Treasurer, should this eventuate, will rightly be condemned) the potential is too great given how genuine tax reform has not been implemented for decades.
While a sugar tax may be controversial, it's an idea worth considering, as are broader changes to cut tax concessions that don't add to the economy.
The Treasurer must seriously commit to action following the talks, and ensure the tax system is fair and equitable for coming generations. The worst outcome from yet another political talkfest would be maintaining the status quo.
Responsibility for editorial comment is taken by Editor-in-Chief Christopher Dore.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
West Australian
2 hours ago
- West Australian
Robert Carruthers: WA merits a spot at Jim Chalmers economic reform roundtable
There's just over a month until Treasurer Jim Chalmers' highly anticipated economic reform roundtable. The guest list is still being finalised, and the agenda has evolved to tackle ever-growing 'pillars' of reform. Whatever the roundtable's name or shape, the problem statement is clear: Australia's prosperity is under the gun, and we need to become far more match-fit. That's precisely why more key players from WA's dominant resources sector should receive a call-up. Australia's largest exporters are clearly critical to Australia's prosperity. Prime Minister Anthony Albanese has spoken of his Government's mandate to make lasting change. Indeed, alongside his Treasurer, there's the opportunity to become generational reformers in the mould of past Labor luminaries. But here's the rub: consensus-seeking cannot be the singular objective. We're right to be wary of well-choreographed, Canberra-centric thinking and an invite list that is too narrow. Without strong representation and leadership, we risk ending up with a well-rounded table but a flat agenda. WA has produced world-beaters across medicine, tech, and sport — and last week, a boy from the Wheatbelt ascended to the top job at Rio Tinto, one of the world's largest diversified mining companies. Yet of the 24 formal invites issued, to date only one has been summoned from WA. There is no doubt former WA treasurer Ben Wyatt will be a strong voice and wears many hats, including board roles with major resources companies. Still, a solitary voice is not sufficient from a State that contributes more than half of Australia's export earnings. Resources Minister Madeleine King deserves credit for convening sector leaders in a series of mini roundtables in Perth last week, with identified priorities to feed into the broader Canberra roundtable. It's a measure of the respect that Minister King has earned for her ongoing engagement and support for the sector. It just makes sense to extend more invitations to WA's industry leaders to accompany her in making the 3000km journey east. Successive governments have shied away from tackling broad-based tax reform. The net result is an overly complex system reliant on a proportionally narrowing base, akin to a death by thousand cuts labyrinth. The Albanese Government was elected with a mandate for lower taxes (with the notable exception of superannuation tax). Yet, concerningly, the Treasurer has taken to flying kites in recent weeks to test support for introducing new taxes. Any move to increase resources-based taxes should be called out for what it is: a shakedown on WA. The allure of low-hanging revenue measures must not substitute for meaningful rationalisation of the tax system across all levels of government. As former WA premier Colin Barnett argued, not even the GST distribution should be off-limits in the quest for meaningful reform. Ask global resources companies who have recently invested in North or South America what welcome mat measures were rolled out to secure their investment in those jurisdictions. You can bet it was streamlined and designed to incentivise investment and job creation — not a confusing queue of overlapping requirements. WA's mining leaders can share firsthand what Australia is getting right, and what we're getting dangerously wrong. Any serious economic reform agenda must tackle the red tape holding back major projects across the nation. This is fundamental not just for WA resources projects, but for the infrastructure and energy transition projects that are vital for future generations. It's noteworthy that Dr Ken Henry, architect of the last major template for tax reform, is now championing environmental regulatory reform as the single greatest opportunity to lift productivity and protect Australia's environment. It's a conundrum I'm equally passionate about. For two decades, there's been broad agreement on the need to reform the EPBC system which is contorted, cautious, and far from certain. New Environment Minister Murray Watt has taken an encouragingly proactive and pragmatic approach, openly acknowledging that not everyone can be happy with every aspect in the pursuit of meaningful reform. The proposed framework for streamlined environmental regulatory approvals — with standards set nationally and ideally implemented by the States under a single pathway — should have top billing at the roundtable. No conversation on productivity is complete without addressing industrial relations. It's the elephant in the room. The IR system had sizeable chunks re-jigged during the first term Albanese Government, but these reforms broke the link to productivity and international competitiveness. The roundtable presents an opportunity to hardwire productivity back into Australia's IR landscape. Past Labor governments have succeeded in striking accords between employers, employees, and unions to share responsibility for both delivering efficiency and sharing the benefits. Cyclical industries like the resources sectors need the flexibility to adapt to changing conditions. There are good global examples, including in US heavy industries, where these kinds of flexible workplace agreements have become a foundation for shared resilience and job security. We simply must get these settings right to secure Australia's competitiveness. It is puzzling that Australia's largest export industry did not make the first cut of invitations to the roundtable. The Prime Minister outwardly acknowledged the sector's central importance when he invited senior iron ore executives on his recent high-level state visit to China. WA's wealth-generating industry deserves more than a sideline role in shaping national economic reform. If the NSW Treasurer can secure a seat at the roundtable, surely our world-leading mining CEOs and WA's Premier warrant their place too. Robert Carruthers is Principal at CSA Ltd
Sky News AU
7 hours ago
- Sky News AU
'Bunch of drunken sailors': Sky News host Steve Price scorns Labor's 'crazy' spending as NDIS budget exceeds defence by a billion
Sky News host Steve Price has hit out at Labor's 'crazy' spending as the NDIS budget overshadows defence while more than half the nation relies on some form of government subsidy. Price said the Albanese government was rightly happy to have won the federal election, but now needed to get the country 'back on track'. A report by the Centre for Independent Studies which found more than half of Australian voters rely on government for most of their income - through wages, benefits or subsidies - was proof of the major challenges ahead, he claimed. 'We have become a nation of leaners, not leaders, and I hate to say that,' Price said. 'We have continued to swamp the country with unprecedented numbers of migrants. We have workers relying on governments for their pay packets. That grows alarmingly.' CIS economist Robert Carling warned such widespread dependence has fuelled unsustainable government spending and eroded economic resilience. In a new paper published on Wednesday, Leviathan on the Rampage, Mr Carling warned federal spending alone has reached 27.6 per cent of GDP. This was up from between 24 and 25 per cent of GDP in 2012-13 and has been fuelled by a 'program expansion in social services, defence and debt interest'. 'How can that be sustainable?' Price said. 'According to that report, spending is driven largely by a small group of programmes including - surprise surprise - the NDIS, Aged Care, Medicare and Defence. The NDIS is actually costing taxpayers more than what we spend on defence. How crazy is that? This year alone, $52 billion on the NDIS. 'Simply not sustainable.' Australia's current defence budget is $51 billion. Price said the Labor government was 'spending like a bunch of drunken sailors'. According to the federal budget 2025-26, the NDIS recorded the second highest annual growth in major payments, behind only interest. It has been projected to cost more than $64 billion by the end of the decade. Meanwhile, the federal budget has been projected to endure a decade of deficits and surge past $1 trillion of debt. The findings come just days after leaked Treasury advice revealed the Albanese government has been told to pursue 'spending reductions'. Treasury said Treasurer Jim Chalmers would need to find 'additional revenue and spending reductions' to ensure a 'sustainable budget'.
Sydney Morning Herald
11 hours ago
- Sydney Morning Herald
Let's lower the voting age and see some progress
Herald opinion writers Vivienne Skinner and Brad Emery discussed the pros and cons of lowering the voting age to 16 in Australia after England's move to join Wales and Scotland (' Sixteen is sweet to step up to the polls', ' An interest in politics is great, but only adults should be allowed to vote ', July 23). I was delighted to read that independent MP Monique Ryan intends to bring a private member's bill to Parliament on this issue. Initially, I would support the vote for 16 and 17-year-olds to be voluntary, with a view to make it compulsory over time. Democracy worldwide is under pressure with elderly, self-serving leaders mainly concerned with holding on to power. In a world rapidly changing environmentally, socially and geopolitically, we have old men making decisions that will largely affect the young, who have no voice. This change would almost certainly increase the progressive vote, and may be why British PM Keir Starmer is putting it forward. It could work for Anthony Albanese, too. Now is the time to refresh our democracy and make our society as representative as the UK's. Andrew Caro, Greenwich While there are thoughtful arguments each way, my feeling is that 16 is too young. People such as Tanya Plibersek and Monique Ryan move in relatively select society in which politics is of interest and importance, so perhaps have a biased view of how much ability and interest the average 16-year-old has. There is also the maturity factor, which is not necessarily based on chronological age. Let them reach at least 18, while encouraging them to become politically aware and hopefully more able to make reasoned, logical, responsible decisions. Augusta Monro, Dural I must challenge columnist Brad Emery on his assertion that 16 and 17-year-olds are 'considered minors in every other regulatory contexts'. At 16, youths can legally have sex and bring children into the world (in most states) – one of the most important decisions of their lives. At 16, you can register as an organ donor, get an abortion, get married (with permission), get a learner's permit, apply for youth allowance, consent to medical and dental treatment, have your own Medicare card and work full-time. You only have to look at the 'School Strike 4 Climate' protests, in which thousands of youths took part, to see the commitment that young Australian have to civic duty. I believe that the voting age should be lowered to 16 now. Bruce Welch, Marrickville Australia has one of the lowest ages of criminal responsibility in the Western world. If 10-year-olds can be tried as adults for crimes, then surely they should also be allowed to vote. Either they are capable of adult decisions, or they are not. Bart Fielden, Lindfield Marine tragedy The toxic algal bloom on South Australia's coastline should indeed be taken seriously (' Government all at sea on toxic algal bloom ', July 23). The Great Barrier Reef has already suffered several mass bleachings, largely due to ocean warming. Now a widespread algal bloom has put South Australia's Great Southern Reef under threat. It is heartbreaking to see the devastation of coastal treasures like the Coorong, which once had an abundance of thriving birdlife and wetland vegetation. Many readers will remember the iconic film Storm Boy, which was set in this location. Again, a marine heatwave was a major contributor. Environment Minister Murray Watt has finally decided to visit Adelaide with a pledge of $14 million to deal with the algal bloom disaster. But what's the point of Labor spending that money when at the same time it approves fossil fuel projects? The government must account for the effects of global warming when dealing with such disasters. Anne O'Hara, Wanniassa (ACT) Gender writes Correspondent Ryszard Linkiewicz claims fewer boys read books nowadays because male authors have been 'purged from reading lists' (Letters, July 23). But why should boys only be interested in stories written by men? At school, we girls read F. Scott Fitzgerald, Ernest Hemingway, Joseph Conrad and other male authors. We read them despite the fact they were written by men, about men, with only the occasional one-dimensional female character to whom we might relate. It is sad that boys only have what Linkiewicz calls 'poorly written tripe' by the likes of Helen Garner, Kate Grenville, A.S. Byatt, Doris Lessing and other women. What a pity that, according to him, those whose 'literacy skills develop more slowly' can't find anything of interest in the works of such (female) giants of the literary canon. Gerianne Rudd, Toowong (Qld) There are several Australian male authors who are writing and publishing books now, all available to boys. I've just finished Mark Brandi's latest book Eden and have read his Wimmera and Southern Aurora, all of which have boys or men as the main characters, and are easy to read. Then there's also Tim Winton and Trent Dalton, plus Aaron Blabey with his graphic novels Bad Guys. The graphic novels in particular are a good way to encourage reading among boys and young men. Rosemary Wolf, Mount Warrigal Ryszard Linkiewicz notes that NSW schools have replaced distinguished authors with 'poorly written tripe'. I feel this has long been the case. Ryszard is lucky he didn't sit the HSC in 1970, when we studied such literary gems as Jane Eyre and Wuthering Heights. So many hours of boredom. Trevor McCarroll, Gerringong No right to rule Yet more correspondents (Letters, July 23) resorting to disparaging statements such as 'sense of entitlement' and ' their right to rule' to attack Gisele Kapterian for exercising her right, on behalf of those who supported her, to ensure that in an incredibly close election, every voter's true intention is properly accounted for. That is the entitlement of every candidate in our elections, and our system was established to enable that to happen. No one in this country has a right to rule, and even if they thought they did, it would be only to govern, not rule, and face their electors every three years. Peter Thornton, Killara Reality lost The Israeli ambassador to Australia was very quick to admonish the Australian government, along with 27 other countries, for their call to end the Gaza war, saying they were 'disconnected from reality and it sends the wrong message to Hamas' (' Penny Wong: Israel condemnation channels Australians' 'distress' over Gaza ', July 22). He conveniently forgets the reality that this whole catastrophe would not have happened had it not been for the abject failure of the Israeli government, the IDF, the Shin Bet (internal security service) and Mossad to protect Israel citizens from the Hamas attack on October 7, 2023. Perhaps he's the one 'disconnected from reality', and no amount of killing people seeking humanitarian aid is going to change that. Alexis Lander, Kensington Definition dilemma I read closely the piece by Adam Slomin about the definition of antisemitism. (' Defining antisemitism is no threat to free speech. Without a definition, we are adrift ', July 23). Unfortunately, the International Holocaust Remembrance Alliance's working definition of antisemitism would be more easily accepted if Israeli Prime Minister Benjamin Netenyahu and his government also adopted that definition, instead of calling all criticism of Israel's policies and actions 'antisemitic'. If Israel cannot accept that definition as best practice, why should anyone else? Doug Richards, Tamarama I find it extraordinary that Herald correspondents should suggest that the best way to combat antisemitism is for Jews to publicly disassociate themselves from Israel (Letters, July 23). I doubt that these writers would say that Arabs or Muslims must publicly condemn Hamas, or the Syrian, Iranian, Saudi Arabian, Afghani or Indonesian regimes. What about Australians of Chinese, Russian or American origin or connections? Should they have to condemn 'their' regimes? Opposition to particular actions by Israeli settlers or the government is not antisemitic as many Jewish people and Israelis prove. But the ideas that the Jewish state is uniquely evil and that all Jews are implicated in everything it does are, and should be, roundly rejected. John Sexton, Centennial Park Chinese Australians aren't directed to 'unequivocally denounce the actions' of the Chinese government in Tibet or Xinjiang or against Taiwan to stop harassment and firebombing and graffiti of their businesses and cultural centres, Dave Bailey (Letters, July 23). Indonesian Australians aren't told to 'disassociate themselves from the worst things happening in' West Papua to stop doxxing and protests directed at them at universities or art performances, Jennifer Briggs. It's only Jewish Australians who apparently deserve to suffer persecution for the actions of a foreign state. Richard Abram, Bexley Victims of tobacco war On the illegal tobacco debate, I agree with the obvious premise that cigarettes cause harm, and cheap cigarettes keep people using them. But if the plan is simply to close down the illegal tobacco market, I worry for many habitual smokers on low incomes (' Eviction, jail and fines for illegal tobacco sellers', July 23). As a psychologist, I work with a number of people on disability support pensions who live with severe mental illnesses. Cigarettes are a part of their way of life, and they're just not interested in quitting. If they are forced to go back to highly taxed/priced legal cigarettes, they will forego food and other necessities in order to keep smoking. I've seen this happen. Even though they're well aware of the terrible health prospects, cigarettes nevertheless help many people to keep going. Sadly, they're not keen on patches or gum. So, whatever is done about illegal cigarettes, allowances need to be made for many on low incomes who will continue smoking regardless. Otherwise their quality of life and mental health will crash. Jim Filshie, Kingsgrove I hardly think any landlord is going to evict a retailer for selling illegal tobacco. I recall reading that these same sellers are offering landlords above market rates to rent their premises and with today's vacancy rates in strip retail shops, I'd suggest it would be a rarity to see any landlord evict a tenant for anything apart from rent arrears. Barb La Ganza, North Narrabeen I think that tough legislation and penalties is the right approach rather than lowering the tax rate on tobacco products. However, it remains to be seen if the words will be put into action. It has been more than eleven years since smoking was banned in all cafes and restaurants, and I have seen little evidence of enforcement. Reports to Health NSW and local councils achieve nothing. Bob Edgar, Moss Vale HECS anomaly Ross Gittins quite rightly points out the stupidity of the Morrison government's Job Ready program, which resulted in arts degrees costing $50,000 (' Cutting HECS debt is the least Albanese could do for young Australians ', July 23). Why the new Labor government hasn't changed this policy is a mystery. Reducing students' HECS debts by 20 per cent is a good start, but surely preventing future extreme and unfair tertiary debt must be on the agenda. As they say, 'it's a no brainer'. Eric Sekula, Turramurra While the government tinkers with HECS debts in a rather ineffective attempt to reduce financial burdens on the young, it is quite amazing that university education in EU countries like France, Germany and Sweden is almost free. Furthermore, living allowances are provided which reduce the need to work part-time. Governments there heavily subsidise universities and the considerable benefit is little disincentive for university study even for the relatively poor. These policies obviously do much to reduce inequality. The secret is of course higher average taxation and the realisation that university degrees will result in higher salaries and thus more tax being paid during a lifetime of work. Geoff Harding, Chatswood Tax outrage There are certainly valid arguments for a tax on high-value family homes (Letters, July 23), but the government also urgently needs to address the miserable contributions from the oil and gas industry, among others. According to The Australia Institute and despite the industry's insistence that it pays substantial tax, nurses paid $7 billion more tax during the past 10 years than oil and gas companies paid in company tax and Petroleum Resource Rent Tax. In short, nurses paid $52 billion and the oil and gas companies $45 billion. Finally, the oil and gas industry 'exports 80 per cent of Australia's gas, gets most of the gas it exports for free, is a small employer and pays little tax'. It is hoped that Jim Chalmers' economic summit will not be dominated by the usual rent seekers. Alison Stewart, Riverview Super changes The story in the Herald (' Average pay of $240k to be hit by super tax', July 23) outlines a number of scenarios for people who will be hit by Labor's superannuation tax changes. But what the report fails to mention is that both a husband and a wife can have $3 million each in super. It also doesn't ask the question 'why do people running a farm have the farm included in superannuation?' Also, many farming families also have trust accounts, thus decreasing their taxable income. It's all legal but not an option for the average Australian. If everyone wants the Labor government to enact the policies it took to the recent election, then the money has to be found from somewhere, particularly as companies are not reinvesting to create growth in the economy. Peter Nelson, Moss Vale Welfare state It has become all too apparent that Australian society is fast becoming a welfare state following many years of government handouts (' Australia risks becoming a 'welfare state', study warns ', July 23). In many instances, this has been initiated to win elections. While government support is appreciated by those with urgent or specific needs, far too many now see it as an easy alternative to employment and making a contribution to society. With government spending approaching 40 per cent of gross domestic product and the emphasis currently on how to increase productivity, the answer clearly lies within government itself. The issue of debt – private and government – must be addressed if productivity is to be increased, or, accept that peak productivity and economic growth has been reached. Efficiency is just not a private sector issue but also a government issue with ever-increasing public sector employment. Australia's standard of living cannot be totally reliant upon an ever- smaller private sector. Just look at the number of business failures over the past few years. Bruce Clydsdale, Bathurst Moved to tears Your story on Labor MP Ali France has to be one of the most moving pieces of journalism in a long, long time (' How Ali France's late son's words propelled her to parliament ', July 23). Her compassion and courage, which included both the loss of her son, in addition to her disability, are just phenomenal and reduced me to tears. I sincerely hope we hear a lot more from Ali for a long time to come. Rose Lysnar, Sherwood (Qld) Ali France's maiden speech was inspiring. Let's hope that the 48th parliament provides a safe, supportive workplace which embodies her values of service, fairness, kindness and perseverance. Viv Mackenzie, Port Hacking Ali France is a beacon of hope for the many Australians living with grief and/or disability. We now have a strong voice in federal parliament. Sending grateful thanks to the voters of Dickson. Margot Alaba, Balgowlah
