My Letter to the Treasurer the Hon. Joe Hockey on Tax Reform and the Coalition's White paper to make our Tax System Fairer, Simpler and Lower.
Thank you for your leadership of the Tax White Paper process. I agree that a frank, national conversation on tax reform is essential to securing the future economic prosperity of all Australians.
The 2015 Intergenerational Report has outlined the challenges that we face, with an ageing population set to put pressure on the budget over the decades ahead.
Furthermore, the Tax Discussion Paper has laid bare the structural issues in our tax system. We rely too heavily on income taxes, diminishing the incentives to work, invest and save, and putting us at a disadvantage to our international competitors.
For far too long, Australia has been complacent, tinkering at the edges of our rickety tax system and failing to deliver meaningful reform.
It is my strong view that the Coalition must seek a mandate at the next federal election for bold tax reform that lowers taxes for all Australians.
The principles that I believe should form part of this vision are outlined below.
- Taxes as a percentage of gross domestic product should be lowered.
- Personal income taxes should be cut for all taxpayers as a matter of priority.
- Personal income marginal tax rates should be reduced.
- The structure of personal income marginal tax rates should be flattened.
- Company income taxes should be significantly reduced for all businesses.
- The GST should be broadened to cover all consumption in Australia.
- The rate of the GST should be increased to 15%.
- To compensate for the broadening and increase of the GST:
- low-income earners should receive income tax cuts; and
- pensioners and other income support recipients should receive increased payments.
- In exchange for the broadening and increase of the GST, the Commonwealth should work with the States and Territories to secure the abolition of payroll tax.
- The Commonwealth should share the income tax base with the States and Territories in exchange for:
- a reduction in Commonwealth income tax rates; and
- the elimination of tied grants and other specific purpose payments to the States and Territories.
This package of measures would unlock the potential of Australian families and businesses, realign the finances of our Federation, and set Australia up for future growth.
I have written to the Tax White Paper Unit in similar terms.
Senator for Queensland