Tax Reform Debate Heats Up

Peak bodies from the social sector and the business community have united to call on State and Federal Governments to have a transparent conversation about tax reform, despite the potential political ramifications.

Ahead of this week’s Leaders Retreat involving Australia’s Premiers and Chief Ministers, a group of representative organisations, including the Australian Council of Social Service (ACOSS) and the Business Council of Australia (BCA) have called for action on tax reform.

The group released a statement urging leaders to demonstrate “a level of bipartisanship and inter-jurisdictional cooperation not seen for a long time”.

NSW Premier Mike Baird has publicly advocated for the GST to be increased to 15 per cent, while WA Premier Colin Barnett has said he would support a more modest increase.

ACOSS and BCA said the best starting point for the tax review was to design a robust, fair and efficient national tax base, with discussion around revenue distribution between the States and Territories a secondary issue.

ACOSS CEO Cassandra Goldie said the leaders knew that Australia needed to reform a tax system that was out of step with the rapid economic and social changes facing Australia.

“We can no longer afford to avoid serious tax reform. If we postpone it until governments really do face a Budget crisis the choices will be a lot tougher,” Goldie said.

“Experience shows us that tax and budget reform can be achieved, but it will require a degree of vision, consensus and bi-partisanship, starting with our political leaders. ACOSS is up for reform, this is why were are working with business and others.”

Goldie said Governments and all stakeholders must remain open to looking at the tax system as a whole, and considering all the options which could deliver the optimal system for the 21st century global economy.

BCA Chief Executive Jennifer Westacott reform would only happen if political, business and community leaders took the long view and put the national interest first.

“If our diverse organisations can sit down together and nut out the objectives for tax reform, core problems with the current system and some directions for change, this provides our political leaders with a solid platform of consensus and support to take things forward,” Westacott said.

However, New South Wales welfare peak body NCOSS said increasing the GST should not be a priority.

According to its own research the Council of Social Service of NSW found that 86 per cent of low to middle income families in NSW are concerned about a potential rise in the GST, and 89 per cent are concerned about potentially applying the GST to food.

The findings – from a survey of low to middle income families conducted by Essential Media Communications and Research Now – are detailed in NCOSS’ annual Cost of Living Report 2015 which was released earlier this month.

NCOSS Deputy CEO, John Mikelsons, said more low to middle income families were now struggling.

“We know that it is essential that State Governments can raise the revenue they need to pay for the services that everyone relies on. We support sensible tax reform that secures the revenue our governments need to pay for these quality services," Mikelsons said.

“But at a time when almost 1 in 7 children in NSW are experiencing poverty, and low to middle income families are struggling to meet the rising cost of living, increases to regressive taxes like the GST are the last place we should look for revenue – not the first."