Major tax reform probably 'a bridge too far': CBA
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Sky News AU
8 hours ago
- Sky News AU
Prime Minister Anthony Albanese dismisses GST changes ahead of economic roundtable, despite calls for ‘brave' overhaul
Prime Minister Anthony Albanese has ruled out lifting the Goods and Services Tax (GST) as part of any upcoming economic reform ahead of the productivity round table in August. Economists have long pushed the government to increase the GST and reduce personal income taxes, as a way to equalise the tax system. Speaking at Sky News' Australia's Economic Outlook forum on Friday, Mr Albanese said that changes to GST were 'not something we have given any consideration to'. 'I'm a supporter of progressive taxation, consumption taxes by definition are regressive in their nature, so that's something that doesn't fit with the agenda,' he said. While refusing to play what he called the 'rule-in, rule-out game', Mr Albanese made clear the government was not considering changes to the GST. However, he said he remained in favour of lowering income taxes 'as low as possible, consistent with providing appropriate services'. 'I remind you there's only one political party that went to the election arguing for lower taxes and that was the one that I lead.' CPA Australia, one of the country's major accounting bodies, has said it will submit a plan for 'fundamental reform' to the GST ahead of the economic round table. 'It's time for a grown-up conversation about Australia's tax system and the GST's structural weaknesses,' CPA Australia chief executive Chris Freeland said. 'Most tax specialists believe that increasing the GST is the key to broadening the overall tax base. 'Reducing the reliance on personal income tax would put more money in people's pockets and ultimately generate more revenue to drive economic growth.' While Mr Albanese said it was not on his agenda, he added that people were entitled to put forward whatever proposals they wish at the round table. Another major topic of discussion at the Australia's Economic Outlook 2025 event was the role of the private sector in driving productivity. Mr Albanese said he wanted to make it easier 'for business to create jobs, start and finish projects, invest in new technology and build new facilities'. 'From big employers to the millions of small businesses… Our government wants you to be able to resume your rightful place as the primary source of growth in our economy,' he said. 'That is the essential purpose of the roundtable we are convening in Canberra in August. We are seeking a broad range of views, so we can build broad agreement for action.' Mr Albanese's comments were welcomed by Australian Industry Group chief executive Innes Willox, who expressed concern about the 'failing investment economy' in recent years. 'Australia's long-term productivity challenges have been laid bare in recent years, with anaemic growth, difficult business conditions and a falling investment economy,' she said. 'We welcome Prime Minister Anthony Albanese's promise to be brave with reform… The evidence is clear on private sector weakness – around four in five of the jobs created last year were in government-supported industries. 'The Prime Minister rightly recognises that business needs to resume its rightful place as the engine of growth, if Australia is to realise its ambitions for a strong, productive and diversified economy.'
Sydney Morning Herald
20 hours ago
- Sydney Morning Herald
Australian government super tax: Most Australians are far from being affected by new tax on Superannuation, ATO data shows
Known as the super guarantee, this rate has gradually climbed from 9 per cent in 2013 to 12 per cent, beginning this month, meaning younger workers will be contributing a larger slice of their income to their super over a longer period. Chalmers has said Labor's legislation would not increase the $3 million threshold in line with inflation, meaning more people would be pushed past the cap in decades to come, and by which time that amount will not be worth as much in real terms. Loading Australian Council of Trade Unions secretary Sally McManus told Channel Nine's Today program this week that it would be 'a very long time into the future' before the average worker would be affected by the $3 million cap. McManus also said the threshold has 'got to be indexed' to make sure most people do not end up being hit by the new tax rate. Calculations based on the latest ATO data, for example, suggest a surgeon – the highest income occupation in 2022-23 – earning the job's average salary of about $470,000 a year, and contributing 12 per cent to a super fund (returning an average of 5 per cent), would still have to work about 22 years to accumulate $3 million in superannuation. That includes an assumption that their wages grow at 3.5 per cent a year. Under the same assumptions, an individual earning $180,000 would have to work 34 years before reaching the $3 million cap, and a person earning the median salary of $62,000 in 2022-23 would have to work five decades. The data from the Tax Office shows the median super account balance for those earning more than $180,001 grew from nearly $304,000 in 2021-22 to just over $315,000 in 2022-23, while the overall median balance climbed from $57,900 to $60,000. Grattan Institute Housing and Economics Security program director Joey Moloney, meanwhile, says that in 30 years' time, the $3 million threshold will still hit only the top 10 per cent of income earners, and the threshold – like ones for personal income tax – is likely to change under future governments even without indexation. 'There are people forecasting 30-, 40-plus years into the future as if this threshold will never change,' Moloney said. 'That strikes me as a very bold assumption because there'll be 10 electoral cycles in between that.' Moloney also noted that 85 per cent of those with super balances over $3 million are aged over 60 and the super tax change would reduce the pressure on younger Australians because older, wealthier Australians would shoulder more of the burden of budget repair and the ageing population. Latest data from the ATO shows men aged 60 to 64 and women aged 70 to 74 have the biggest median super balances, at just under $225,000, with both seeing a drop-off in the size of their nest eggs after 75. Men in the ACT, Western Australia and South Australia had the highest median super balances in 2022-23, while among women, median super balances were highest in the ACT, South Australia and Tasmania. Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.
Sydney Morning Herald
a day ago
- Sydney Morning Herald
The bold plan to use tax reform to boost Australia's struggling culture sector
Australia's struggling culture sector could be handed much-needed extra funding under plans to use a radical shakeup of the nation's tax system to alleviate the burden of rising costs, rapidly shifting audience trends and waning philanthropic support. Exempting prize money from GST, giving wealthy benefactors added incentives to donate, taxing vacant commercial spaces and allowing arts workers to claim new expenses are options being considered by the NSW government as part of the bid to convince their federal counterparts of the need for urgent reform. Arts Minister John Graham will on Saturday call a cultural arts tax summit at the Sydney Opera House for September 26, with any changes potentially applying to galleries, libraries and museums; performing arts like theatre, dance and comedy; music; screen and digital games; visual arts and crafts; literature and writing; and the design, architecture and fashion industries. 'This will be the most unusual show the Opera House has hosted and its impact could last generations,' Graham said of the impending summit. The gathering will take place just weeks after federal Treasurer Jim Chalmers hosts a productivity roundtable which will hear suggestions for tax reform from business, unions and independent bodies including the Reserve Bank. 'It is time to talk tax,' Graham said. 'Two of the biggest levers governments have to support the arts and creative sectors are regulatory change and funding. If tax boffins and creatives can agree on something then our nation should take notice.' The rethink on tax is an acknowledgement that government grants alone cannot help the sector tackle growing costs, changing audience demands, evolving media markets and shifts in the geopolitical landscape – including tariffs. With limited tax levers – mainly on property taxes which could help unlock vacant spaces – NSW requires help from the federal government and other states for reform. The matter was raised at a meeting of cultural ministers last month and well received. Tax reform is likely to be on the agenda of federal Arts Minister Tony Burke when he revisits his five-year cultural policy, Revive, next year.
