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“That makes it difficult for the economy to generate enough tax revenue to meet voters’ wishes and the country’s needs, such as strengthening defence or improving aged care.”
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The federal government has not had real tax reform for decades, and the bookshelves of its Canberra offices are littered with reviews that have no trace. For example, former treasurer Ken Henry’s 2010 review of the tax system advocated a three-threshold personal income tax system that, when adjusted for inflation at the time, would have given Australia a tax-free threshold of $35,000, a 35 per cent tax rate up to $256,000 and a 45 per cent tax rate above that threshold.
As Wright points out today, Australia’s tax system hampers economic development and encourages people to engage in tax evasion schemes, while hampering the government’s ability to pay for the services that voters demand.
Treasury Secretary Jim Chalmers likes to portray himself as a reformer. The Herald So far, there is little sign that Labour has the political courage and policy strength required to enact the radical changes that are sorely needed.
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