Overhaul tax system to fix low productivity, inequality: Teals
Independent MP Allegra Spender has called for more GST, lower income taxes for young workers and the abolition of stamp duty and concessions.
The tax system must be overhauled to fix Australia’s flailing productivity levels and growing intergenerational equity, according to Teal MP Allegra Spender.
Laying out her vision at the National Press Club last week, Spender said the government should establish a tax reform commission to look at stamp duty, GST, resource rents, income tax and concessions.
“The tax system needs to be deployed to drive more capital investment, unlocking the productivity gains that catalyse lower prices for consumers and higher wages for staff,” she said.
According to the Productivity Commission, labour productivity fell by 0.8 per cent across the economy in the June quarter.
“Productivity isn’t everything, but in the long run it’s almost everything,” she said, quoting economist Paul Krugman.
“The capital investment which enables much of our productivity growth is simply not there.”
Growth should be funded through taxes on economic rents such as in resources and prices on negative externalities, like the harms of social media, she said.
Stamp duty was also an “awful tax” that the Commonwealth should help to abolish.
“The states simply can’t give up the revenue,” she said. “The Commonwealth should step in and provide interim support.”
“It penalises people who move home, who downsize, and who get divorced, it raises insurance premiums and it stops about 300k people in NSW owning their own homes.”
The tax system could also address growing levels of inequality, she said, proposing an increase in GST to allow for lower income taxes on younger workers.
She said younger workers were increasingly bearing more of the tax burden even as they shrunk as a proportion of the population.
“Young people know they are falling behind.”
“With our current structure, you can have two households earning $100,000 a year: one working and one retired. The working household will pay twice the tax despite the retired one likely being significantly wealthier.”
“This clearly is not sustainable.”
More options would be put for debate in Spender’s forthcoming green paper, developed in consultation with tax experts and the community.
Despite being the member for Wentworth, Australia’s wealthiest electorate, she said her “community sees the need for change”.
“The policies I have outlined are not a panacea but they would be real progress,” she said. “Independents aren’t being elected to be timid or to preserve the status quo.”
About the author
