Latest news with #Spender
Sydney Morning Herald
a day ago
- Business
- Sydney Morning Herald
The end of negative gearing as we know it? Spender calls for new income tax system
Spender's plan would mean property losses could only be used to offset taxable income on other capital investments, or carried forward to tax paid on capital gains when they are sold. She said the current tax system acted as an incentive for people to sink money into property, but was a disincentive for someone who wanted to boost their skills or work. Moving to a dual-income system would limit the attractiveness of negative gearing and trusts. 'You should be rewarded for investing in yourself, not for expanding your property portfolio,' she said. 'We're taxing young people when they aren't getting high pay, and they're facing high costs such as buying a home or childcare. It's actively working against young people.' In the 2022-23 financial year, 1.1 million people made a net loss on their property investment, with a similar number either breaking even or recording a profit. The number of negatively geared investors is expected to grow due to the rise in mortgage interest rates that began in 2023. Spender said any change would require a transition period to enable people to adapt to the new system. She said her proposal would be budget neutral, as extra tax collected on property investors would be used to either cut personal income tax rates or lift the thresholds at which tax rates change. She said the current tax system was using bracket creep as a 'silent driver' of budget repair, while her proposal would encourage people into the workforce and reward those who depend on wage income. 'We're not incentivising people to be the best that they can be, but how much they can put into property. We can't keep doing that,' she said. Her proposal emerged as the Reserve Bank released research showing that a fall in competition across the economy since the early 2000s had directly contributed to Australia's slowdown in productivity that is costing every person up to $3000. Loading RBA economists Jonathan Hambur and Owen Freestone found that if competition were around the level it was at the turn of the century, overall productivity would be 1 to 3 per cent higher, and the economy up to $80 billion larger due to a better allocation of business resources. 'This shows that declining competition has been a significant drag on productivity, and therefore GDP and incomes,' they found. 'These are important findings. They suggest that declining competition in the Australian economy can account for a significant portion of the slowdown in productivity growth, and therefore growth in incomes and living standards.'
The Age
a day ago
- Business
- The Age
The end of negative gearing as we know it? Spender calls for new income tax system
Spender's plan would mean property losses could only be used to offset taxable income on other capital investments, or carried forward to tax paid on capital gains when they are sold. She said the current tax system acted as an incentive for people to sink money into property, but was a disincentive for someone who wanted to boost their skills or work. Moving to a dual-income system would limit the attractiveness of negative gearing and trusts. 'You should be rewarded for investing in yourself, not for expanding your property portfolio,' she said. 'We're taxing young people when they aren't getting high pay, and they're facing high costs such as buying a home or childcare. It's actively working against young people.' In the 2022-23 financial year, 1.1 million people made a net loss on their property investment, with a similar number either breaking even or recording a profit. The number of negatively geared investors is expected to grow due to the rise in mortgage interest rates that began in 2023. Spender said any change would require a transition period to enable people to adapt to the new system. She said her proposal would be budget neutral, as extra tax collected on property investors would be used to either cut personal income tax rates or lift the thresholds at which tax rates change. She said the current tax system was using bracket creep as a 'silent driver' of budget repair, while her proposal would encourage people into the workforce and reward those who depend on wage income. 'We're not incentivising people to be the best that they can be, but how much they can put into property. We can't keep doing that,' she said. Her proposal emerged as the Reserve Bank released research showing that a fall in competition across the economy since the early 2000s had directly contributed to Australia's slowdown in productivity that is costing every person up to $3000. Loading RBA economists Jonathan Hambur and Owen Freestone found that if competition were around the level it was at the turn of the century, overall productivity would be 1 to 3 per cent higher, and the economy up to $80 billion larger due to a better allocation of business resources. 'This shows that declining competition has been a significant drag on productivity, and therefore GDP and incomes,' they found. 'These are important findings. They suggest that declining competition in the Australian economy can account for a significant portion of the slowdown in productivity growth, and therefore growth in incomes and living standards.'
Sky News AU
25-07-2025
- Business
- Sky News AU
Ken Henry says tax system is failing young Australians and warns the case for lifting tax-to-GDP ratio is now ‘much, much stronger'
Former Treasury Secretary Ken Henry has urged Australia to 'prepare ourselves for the worst,' cautioning that while he hopes the government can avoid lifting the nation's tax-to-GDP ratio, the argument for doing so is now 'much, much stronger'. Mr Henry made the comments at a tax reform roundtable hosted by independent MP Allegra Spender on Friday, where he outlined the need to reduce reliance on income tax and flagged concerns about the growing economic burden on younger Australians. 'Tax reform packages must be revenue neutral, and I suggest that we should be thinking about designing the tax system that would do least economic damage as we lift the revenue-to-GDP ratio over time,' Mr Henry said. 'I can understand that some people don't want to quantitate that prospect, but we've been aware of the need to avoid that prospect for 23 years since the first intergenerational report was published in 2002 and the case for having to lift the tax-to-GDP ratio is much, much stronger, but I still hope we can avoid it.' Mr Henry, who served as Treasury boss from 2001 to 2011, said the current tax mix was too heavily dependent on personal income tax and offered little fairness between generations. He argued the system should do more to support productivity growth, warning that bracket creep – where inflation pushes workers into higher tax brackets – placed disproportionate pressure on the young. 'We need to reduce reliance on bracket creep,' he said, adding that boosting productivity was essential for raising wages and lifting national revenue without further tax hikes. Mr Henry also didn't shy away from politically sensitive areas, calling for reforms that could improve housing affordability. He said the government should be open to examining negative gearing and capital gains tax concessions for property investors. 'Anything that makes housing more affordable,' he said, should be on the table. In a stark assessment of Australia's preparedness for a changing global economy, Mr Henry said the tax system was no longer suited to today's challenges. 'The current tax system is not fit for today's increasingly dangerous times,' he said. 'I used the word dangerous quite deliberately.' He also raised concerns about high corporate tax rates deterring overseas investment, while suggesting that politically favoured sectors were under-taxed. Ms Spender, the Member for Wentworth, echoed Mr Henry's concerns and said younger Australians were bearing the brunt of a tax system stacked against them. 'We have a tax system that taxes people most heavily when they are young and under most financial pressure – paying off student loans, trying to buy a house, starting families, paying childcare – and less when they can afford it,' she said. 'Young people are the group that can least afford it.' Speaking ahead of the roundtable, Ms Spender said her goal was to make tax reform more relatable to the broader public, even if that meant stepping outside her comfort zone. 'We're actually doing lifestreaming on YouTube. I've been doing some slightly cringe-worthy Instagram videos on tax reform recently, just trying to bring more people into this conversation,' she said on ABC Radio National. 'Because tax matters to all people, it influences our country, but it's sometimes pretty hard to get your head round and I do want people to be able to get informed.' Ms Spender said Friday's discussion was part of a broader push, with Treasurer Jim Chalmers set to convene his own tax roundtables in the coming weeks. 'The Treasurer has now opened the door to tax reform,' she said. 'I feel that tax reform has the opportunity to help Australia solve some of its biggest problems like sluggish productivity growth, like the fact that young people can't get ahead, like the fact that we need to make this climate transition as cheap as possible. 'But to be honest tax hasn't really been on the table until now.' Treasurer Jim Chalmers has welcomed Ms Spender's initiative, saying he would 'obviously listen to and respect the views put forward'.
West Australian
25-07-2025
- Business
- West Australian
Creators trying to make 'wage slaves' care about tax
Very few people stop Wentworth MP Allegra Spender on the streets of Bondi to talk about tax reform and she wants that to change. That's why among the usual cast of economic boffins, politicians and business representatives at the teal independent's tax roundtable in Parliament House on Friday, content creators were packaging up the discussion to cut through to a different audience. While young people feel the impacts of the tax system on housing unaffordability and stagnant real wages, getting them to care about changing it - and ensuring policymakers know that support is there - is another matter. Former Treasury secretary Ken Henry, who wrote the book on tax reform during the Rudd and Gillard governments, said the current system was broken. The burden is increasingly shifting onto the shoulders of young people, who are also contending with an increasingly unaffordable housing market. "Tax policy tragics know that tax reform is necessary, but the thing is that most people in the community do not," he told the roundtable. "I reckon the best thing that we can do as a group is to help make the case, to help in the construction of a compelling narrative, something that motivates action." Ms Spender agrees. "You have to convince people why it's important before you can convince them what the solution is," Ms Spender told AAP. "People don't come up to me in the street to talk about a particular aspect of tax. "But they talk to me about the fact that they're worried about their kids, whether they can get a home. They're worried about productivity, and whether our businesses can get access to capital. "Those are the things that people worry about. They don't necessarily see the link back to tax." Ms Spender has been taking to Instagram to get the message out. Also there to spread the message were Konrad Benjamin, whose Punter's Politics videos rack up millions of views on social media, and Natasha Etschmann, a personal finance podcaster with more than 300,000 followers across Instagram and TikTok. They have a direct line to a growing cohort of younger Australians who increasingly feel the system is stacked against them. Getting buy-in from regular punters who felt left out was an important step if things were to change politically, Mr Benjamin said. The solutions raised around the table were largely the same ones tax reform advocates have been calling for for more than a decade - taxing carbon and resources more effectively, reducing reliance on personal income tax, and boosting incentives for investment. "They know the solutions," Mr Benjamin said. "How do you get it through? And how do you communicate it? And that's, I suppose, where we are sitting. "We're trying to shape the political discourse around something like tax, because it's been dominated by the Murdoch channels. "But who's bearing the burden? Our generation, wage slaves, us."
Perth Now
25-07-2025
- Business
- Perth Now
Creators trying to make 'wage slaves' care about tax
Very few people stop Wentworth MP Allegra Spender on the streets of Bondi to talk about tax reform and she wants that to change. That's why among the usual cast of economic boffins, politicians and business representatives at the teal independent's tax roundtable in Parliament House on Friday, content creators were packaging up the discussion to cut through to a different audience. While young people feel the impacts of the tax system on housing unaffordability and stagnant real wages, getting them to care about changing it - and ensuring policymakers know that support is there - is another matter. Former Treasury secretary Ken Henry, who wrote the book on tax reform during the Rudd and Gillard governments, said the current system was broken. The burden is increasingly shifting onto the shoulders of young people, who are also contending with an increasingly unaffordable housing market. "Tax policy tragics know that tax reform is necessary, but the thing is that most people in the community do not," he told the roundtable. "I reckon the best thing that we can do as a group is to help make the case, to help in the construction of a compelling narrative, something that motivates action." Ms Spender agrees. "You have to convince people why it's important before you can convince them what the solution is," Ms Spender told AAP. "People don't come up to me in the street to talk about a particular aspect of tax. "But they talk to me about the fact that they're worried about their kids, whether they can get a home. They're worried about productivity, and whether our businesses can get access to capital. "Those are the things that people worry about. They don't necessarily see the link back to tax." Ms Spender has been taking to Instagram to get the message out. Also there to spread the message were Konrad Benjamin, whose Punter's Politics videos rack up millions of views on social media, and Natasha Etschmann, a personal finance podcaster with more than 300,000 followers across Instagram and TikTok. They have a direct line to a growing cohort of younger Australians who increasingly feel the system is stacked against them. Getting buy-in from regular punters who felt left out was an important step if things were to change politically, Mr Benjamin said. The solutions raised around the table were largely the same ones tax reform advocates have been calling for for more than a decade - taxing carbon and resources more effectively, reducing reliance on personal income tax, and boosting incentives for investment. "They know the solutions," Mr Benjamin said. "How do you get it through? And how do you communicate it? And that's, I suppose, where we are sitting. "We're trying to shape the political discourse around something like tax, because it's been dominated by the Murdoch channels. "But who's bearing the burden? Our generation, wage slaves, us."
