THE federal government insists Australia’s poorest won’t be disadvantaged as a result of changes to the tax system, despite new modelling suggesting otherwise.
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Low-income earners would lose about $33 a week because whatever they would save from a tax cut would be offset by having to pay more at cash registers.
“Any package of reforms which is not and is not seen as fair will not and can not achieve the public support without which it simply will not succeed”.
Earlier Turnbull, addressing the 2015 economic and social outlook conference hosted by the Melbourne Institute and The Australian, said a tax reform package must raise the revenue needed, share the burden fairly across the community and do so in a way that incentivised employment, investment and innovation. “We have a very unique culture in Australia, a very good mix of laissez-faire capitalism and free market, but we also have a culture of a fair go, looking after each other”, he said.
Mr Turnbull wouldn’t be drawn on any details for his tax reform plan, saying he did not want to be forced to rule anything out.
A study from Australian Council of Social Service (ACOSS) found a 5 per cent increase to the GST would disproportionately impact the poorest families.
Mr Turnbull said the Government’s overall goal would be a “high wage, generous social welfare net, first world economy”.
Labor has already pledged to oppose a GST increase on that basis.
“Malcolm Turnbull’s plan would be to make Australia’s tax system more regressive, to hit low income earners in particular harder than is now the case under our tax system”, Bowen told reporters in Melbourne.
Deloitte economist and budget expert Chris Richardson had shown the forum a Treasury table which shows stamp duties, insurance taxes and corporations taxes as the “bad” taxes, which imposed the biggest drag on economic efficiency, and land taxes, fuel excise and GST as the “good” taxes, which imposed the least economic drag.
But the government is very unlikely to pursue a GST increase without accompanying compensation in the form of tax cuts or increases in transfer payments.
But Mr Richardson said the GST and income tax were “a little further apart than you think”.
The prime minister said he wanted to avoid being drawn into a trajectory where scare campaigns led to various policy options being rule in or ruled out.
Independent modelling vindicated Labor’s concerns, he said.
“Income tax has become the silent tax for many Australian, particularly young Australians”, Mr Morrison said.
If there are blockages in the parliamentary system that can be cleared through sensible negotiation, we must engage constructively.
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Council president Catherine Livingstone also says if there is no economic growth dividend from tax reform, it will be a missed opportunity.
