*Pic: Image from HERE
It looks as if the upcoming Federal election is going to be largely fought on tax issues with the Coalition, Labor and the Greens all promising tax reform. Labor has already announced a broad range of changes but so far the Government has been unable to provide a coherent plan. GST reform: gone. States levying income tax: gone. What next?
Yes, savings can be made through better efficiency but, even so, more money will be needed in the longer term and if we are to have a bright future as a nation we need to fund the services we value so highly.
To a non-politician like me the solution seems simple: after loopholes, inequitable concessions and inefficiencies are sorted out, if it’s still needed, raise taxes.
Is it really true that the electorate will inevitably react negatively to higher taxation? Perhaps not: if we can be convinced that the money raised is being well spent.
Ideas of what “well spent” means are going to differ wildly of course. There are many who query whether $55+ billion on submarines and more than $20+ billion on the dubious F35 strike fighters is money well spent.
Perhaps the real threats we face are closer to home in the form of bush fires, floods and the like. Perhaps water bombers would be more appropriate? Maybe this money would be better spent on creating a high speed rail to link our eastern seaboard cities?
These are debates we should be having but the first thing we should understand is how relatively low our tax is in Australia when compared with other OECD countries.
We have the fifth lowest tax to GDP ratio out of 34 countries. Yes, that’s right, the fifth lowest. And that includes tax at all levels of government. These aren’t figures plucked out of the air … they are from Treasury itself (see: http://www.treasury.gov.au/Policy-Topics/Taxation/Pocket-Guide-to-the-Australian-Tax-System/Pocket-Guide-to-the-Australian-Tax-System/Part-1 ).
Yes, there are inequities in our system and many improvements could be made but the idea that we are highly taxed is simply rubbish.
Yes, too many corporations are managing to avoid paying tax on earnings made in Australia. Yes, there are too many concessions for the already wealthy to avoid paying their fair share.
These issues can and should be addressed but, even if fixed, it’s likely that we would all have to pay a bit more tax in order to have first-class public health and education systems.
And I believe we would accept to do so if we received a strong and consistent message from credible leaders who showed commitment and, most importantly, results.
Do we have any?
*Pat Synge writes occasional pieces for various publications on topics associated with political donations, electoral funding and taxation. He is founding president of Funding & Disclosure (Inc) - http://www.fundinganddisclosure.org.au/ - and has no association with, or has ever been a member of, a political party.