The Premier’s recent call for tax reform is a courageous one. It takes a brave politician to publicly propose an increase in the rate and scope of the GST, but it’s a conversation we must have, and I support the Premier in starting it.
It might be the most talked about, but the GST is just one aspect of our tax system. When discussing tax reform, we need to talk about all forms of government revenue and expenditure. A broad-based consumption tax (such as the GST) is an economically sound way to ensure financial viability of the states. Increasing the rate above 10 per cent and the scope must be options on the table.
The changing economic climate, commercial realities, and financial stability of our governments, cannot be held hostage to a romantic notion of the GST as it currently exists, but we need to be looking to cut taxes as well. The first to go must be those taxes which penalise people looking to get ahead and contribute to the economy.
Stamp Duty is the most obvious and egregious example of such a tax. It adds tens of thousands of dollars to the average price of a first home and, quite simply, it keeps young Australians out of the housing market.
Then there’s Land Tax. For many Australians, an investment property is not a high-end luxury. As a second income stream it can be a prudential insurance policy, and as part of a self-managed super fund it can be a modest nest egg that will assist people to retire without the taxpayer footing the bill.
Politicians often talk in platitudes about the importance of small business in the Australian economy. You can’t hide from the facts though – small business is the engine behind our economy.
Payroll Tax however is a kick in the teeth to the hundreds of thousands of small and medium sized businesses that employ Australian workers. It is an absolute scandal that businesses are penalised for working hard, innovating and making wise decisions in order to grow and create jobs. Good policy promotes jobs, it doesn’t penalise the job creators.
Fuel excise too is in urgent need of review. Motorists already pay GST on petrol, which means they are effectively taxed twice. And it’s worth remembering that most of the miles driven in this country are not by fat cats in luxury saloons, but by ordinary Australians, going to work, conducting a small business, picking up the kids, picking up the groceries.
Cutting waste is also important.
It is the private sector that provides the best opportunities of increased efficiency and productivity, so this must be an ongoing project. But this can never be at the expense of those essential services that only a government can reasonably provide. Any conversation about government revenue and expenditure must guarantee funding for health and education.
Our nation’s future depends on us getting the tax question right once and for all.
We must create incentives for private investment, and provide the conditions for Australians to build sound financial futures for their families. But it also depends on our government being able to provide and sustain world-class infrastructure, and health and education systems.
We must insist on these as we support our Premier’s courageous call for what will be an honest – and sometimes difficult – conversation.
Oatley MP, Mark Coure