Young people are facing a “profound” disadvantage due to Australia’s tax settings which risks becoming entrenched without an ambitious reform agenda, independent MP Allegra Spender has warned.
Calling on Treasurer Jim Chalmers to enact comprehensive economic reforms, Ms Spender argued that raising the GST and adjusting capital gains tax should be a priority for the government.
“Young people are doing it harder. They’re having a harder time and our tax system is really driving into that,” she said speaking on the ABC’s Insiders program on Sunday.
“I believe everything should be on the table. GST should be on the table. Capital gains tax should be on the table,” she said.
The intervention comes following the release of the sixth Intergenerational Report, which forecast a smaller proportion of working Australians would shoulder a growing burden of the overall tax take.
Personal income tax as a proportion of the federal tax base is expected to soar to 58.4 per cent in the next 40 years, up from 50.5 per cent currently, while the share of other tax receipts is predicted to fall.
This is forecast to occur as inflation pushes workers’ wages into higher tax brackets meaning that a greater proportion of their pay packets will be subject to a higher tax rate.
But amid calls for wholesale tax reform, the Treasurer said the government would instead focus on pursuing incremental reform in what he called “bite-sized chunks”.
These include changes to the petroleum resource rent tax, multinational tax avoidance rules and high-balance superannuation accounts.
Arguing that both major parties had effectively “wedged themselves” on pursuing broader changes, Ms Spender is currently conducting a review into Australia’s tax and transfer system.
Asked about Australia’s growing housing crisis, Ms Spender said introducing annual land taxes and phasing out stamp duty must be a priority to ameliorate low home ownership levels among young Australians.
“Stamp duty is a tax which really holds back homeownership for young people,” she said.
Ms Spender also confirmed that she would run at the next election with wholesale tax reform set to be a “frontline” issue she would be campaigning for.
Employment and Workplace Relations Minister Tony Burke is set to unveil the specifics of the second tranche of industrial relations legislation at the National Press Club on Thursday.
The independent MP separately cautioned against adding additional complexity to Australia’s workplace relations laws.
The proposed changes, are expected to be introduced to parliament in the first week of the September sitting period.
The omnibus bill comprises of clamping down on labour hire arrangements, additional regulation of the gig economy and increased penalties for wage underpayments, make it easier for casuals to convert to permanent positions.
Pointing to the recent revelations that some staff at minister’s own department had been underpaid, Ms Spender renewed her push for award simplification as that would boost productivity.
“[The government] do not have an agenda which is around trying to make it easier to run a business and actually easier to employ people.”
“That’s absolutely what the government needs to put on the agenda. Make it easier to run a business because that drives productivity as well,” she said.
Originally published as ‘Profound’ impact on young Australians without tax reform push, Spender warns