Treasurer Jim Chalmers has opened the door for a broader tax reform that addresses intergenerational inequity as he wraps up his three-day productivity summit.
While there was no clear consensus on the specifics of the tax reform, there was a general recognition among the 23 attendees that the system was unfairly skewed away from young people.
“I think our tax system is imperfect, and one of its most troubling imperfections is best seen through an intergenerational lens, which is why we take our responsibilities to the coming generations seriously,” Chalmers said.
Chalmers also kept the possibility of adopting the Productivity Commission recommendation to introduce a headline company tax of 20% for businesses with turnovers under A$1 billion open.
Tax rates of 30% would remain for companies with turnovers of A$1 billion or more, and all businesses, regardless of turnover, would pay a 5% tax on cash flow, which could be offset by investment.
According to Chalmers, there is no need for another tax review and that the government would formulate reforms based on the following three principles:
- “A fair go for working people, including in intergenerational equity terms”
- “An affordable, responsible way to incentivise business investment” and
- “A simpler, more sustainable tax system to fund the services people need”.
Chalmers said that the “hard work begins now” after consensus was reached on 10 key priorities, including modernising government services, turbocharging housing supply and making AI a national focus.
