Published on: 19 Oct 2022
SYDNEY, Thursday, 20 October 2022: Allegra Spender MP along with expert panelists Bruce Billson, Small Business and Family Enterprise Ombudsman; Jo Masters, Chief Economist for Barrenjoey; and Scott Treatt, General Manager, Tax Policy & Advocacy, The Tax Institute, explored what can be done about tax reform, including setting up an Australian Tax Reform Commission at The Tax Summit 2022, presented by The Tax Institute on Wednesday, 19 October.
The panel covered a range of other issues affecting tax reform, including:
Spender raised the issue of setting up an Australian Tax Reform Commission, saying: “You know, one of the things I'm suggesting – and I have now written to the Treasurer to seek a conversation about – is establishing an Australian Tax Reform Commission.” A body like this, she says, “could have those conversations and give options – because that's what the Australian people want.”
The current state of Australia’s tax system
Spender raised another contentious issue, saying the Australian tax system is ‘not working’: “I'm sure I'm not the only person in the room who feels that the tax system is not working from a productivity point of view, from a growth point of view, from a fiscal sustainability and from an intergenerational equity point of view.”
Billson disagreed, saying: “I don't think the general public thinks the tax system is broken… One of the issues around tax changes is you need to have some shared view that there's a problem to solve. And I just don't think that conversation has been had.”
Revisions to the GST put forward as one solution
Some of the panelists agreed one solution to Australia’s current economic situation could be revising the current GST settings. Treatt believes we should “depoliticise” the GST so reform will be easier. Spender said she’d like the Labor Party to include GST in a tax conversation because consumption taxes are “really important.”
The panel’s MC, award-winning journalist Leigh Sales, suggested a Labor Government could have a “better prospect” of increasing the rate and base of the GST. She asked Spender how partisan agreement across parliament on meaningful tax reform could be achieved.
Spender answered, saying: “This is more possible now than perhaps it was in the past. It's entirely possible. You have a great opportunity in a more diverse parliament to have the conversations about things that are tricky.”
A carbon tax and the role it could play
Spender raised the issue of a carbon tax, and how it could play an important role in the Australian economy. She said a carbon tax would have “very significant impacts in terms of… how energy is going to be made and what our exports are going to be… Australia is very well set up for the clean energy future, but how to make sure that households actually benefit from that – not just larger businesses.”
Solution to the current skills crisis
Sales raised the issue of the skills crisis, saying it's a major problem right now. She asked Treatt how he felt wholesale tax reform could help with this.
Treatt said he felt the role of tax is vitally important to our skills crisis. He said it was disappointing that the recent jobs summit didn’t take into account tax reform. Tax Reform and the need to create incentives to bring people to Australia from other countries are vital to achieve the outcomes needed.
“Tax plays an important role in influencing any behaviours within society,” Treatt said. “It influences people’s contributions and decision-making around entering and exiting the workforce. Tax [and the transfer system] should be discussed in that context.”
Is the current model for superannuation sustainable?
Sales asked Treatt if Australia’s current model for superannuation is sustainable, given its current settings, which are skewed to the older generations.
Treatt replied, saying: “If I'm blunt, no. I don't think the system can sustain it in its present form. If you're looking around how the whole tax system is balanced at the moment, it just comes back to that discussion on how do we rebalance everything and look at it holistically, rather than turning around and simplistically saying, do we go after the tax cuts? Or do we simply make some changes to superannuation?
“It’s a real place to actually have that discussion without saying this is how it fits into a vision, or this is how it needs the balance of taxes. I fear that we're going to have those discussions. I fear that there are going to be announcements and tinkering at the edges around super. And we might see some of that start next week.”
Now is the right time to work on tax reform
In relation to timing, the panel agreed that now is the right time for a great deal of work on tax reform. However, tax reform would be a massive undertaking to tackle all at once.
Overall, the consensus among the panel is that tax reform must be broken down into more manageable pieces. It’s time to seed the conversations and break it down now. That’s key for true and comprehensive reform.
Treatt said: “There must be other aspects within the tax system that can “tweak, change, remove: We have 120 different taxes. We could probably get rid of a couple, and then bring down the reliance on income taxes to get the right balance.”
Spender agreed there is a great deal we can achieve by working on tax reform, adding: “I think there's an opportunity to have those conversations across the Australian public about what sort of economy we want in the future. And how are we going to pay for it?”
The Tax Institute (TTI) is the leading forum for the tax community in Australia. It is committed to furthering tax education, representing its members and continuously improving the tax system for the benefit of all. Its newly launched Graduate Certificate in Applied Tax Law is the ideal stepping-stone to a specialist post-graduate qualification in tax. TTI selected four subjects to provide a strong knowledge of the key tax compliance requirements in the Australian tax system, as well as an in-depth understanding of Australian commercial law. For those working in an accounting or legal role with an interest in tax, it provides a great opportunity.
More information about the Tax Institute
A comprehensive understanding of the tax system as a whole is key to a strong tax reform. In November, The Tax Institute will be releasing an introductory, video-based tax program that allows non-tax technical team members to better understand Australia’s tax system. Called Introduction to the Australian Tax System, the informative video works to increase tax literacy and appreciation for the role of tax practitioners outside of the profession. It’s presented by The Tax Institute’s own tax experts, Scott Treatt, CTA, Andrew Mills, CTA (Life), Robyn Jacobson, CTA and Abhishek Shekhawat, ATI.
The Tax Institute is the leading forum for the tax community in Australia. It is committed to furthering tax education, representing its members and continuously improving the tax system for the benefit of all.
About Allegra Spender MP
Allegra Spender is the independent member for the federal seat of Wentworth. She is a mum, business leader, and renewable energy advocate, and was elected in 2022 on a platform of climate action, integrity, inclusivity, and a future-focused economy.
Allegra has diverse leadership experience in the corporate, non-profit, private, and public sectors. She started her career at McKinsey & Company, before working at the U.K. Treasury and in a leading U.K. public teaching hospital.
About Bruce Billson, Australian Small Business and Family Enterprise Ombudsman
Bruce Billson, is the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) an independent advocate for small business owners. His office has the legislative powers needed to effectively influence our nation’s lawmakers to remove unnecessary obstacles and reduce headwinds so small and family business owners can do what they do best – run their business.
The ASBFEO office also provides small businesses and family enterprises with assistance should they find themselves involved in a dispute.
The ABSFEO acknowledge owning and operating a small or family business is a big responsibility and a deep personal commitment and thank small and family business owners for their dedication and significant contribution to the economy and our future prosperity.
Their mission is to help make Australia the best place to start, grow and transform a business.
About Jo Masters, Chief Economist, Barrenjoey
Jo Masters is the Chief Economist of Barrenjoey Capital Partners, a proudly Australian financial services firm. She focuses on trends across the economy and financial markets and has been a highly regarded part of the economic debate in Australia for 25 years.
Jo is passionate about the role of economics in shaping the world we live in and aims to provide insights that help clients succeed. Her views are regularly sought by Australian and international media.
Her career started in banking and financial markets, with 14 years at Macquarie Bank in various roles in economics and foreign exchange, before moving to ANZ. Most recently, Jo was the Chief Economist for EY Oceania.
She is a member of the Committee for Economic Development of Australia’s (CEDA) Council on Economic Policy, as well as an Executive Member of the Australian Business Economists and sits on the Advisory Board of the Financy Women’s Index.
About Scott Treatt, General Manager, Tax Policy & Advocacy, The Tax Institute
Scott is the General Manager of Tax Policy and Advocacy at The Tax Institute. He is a Chartered Tax Advisor and has been practicing as a tax specialist since 1997, gaining his experience in large 2nd tier and Big 4 accounting firms as well as Government.
Through the years he has been engaged on direct and indirect tax issues pertaining to individuals, start-ups, small businesses, private groups and multinationals, addressing issues including, but certainly not limited to, asset, business and entity transactions and disposals, insolvencies, structuring, succession and disputes (within family groups as well as with the ATO).
Scott has a passion for our tax system and tax education, continuously seeking to find opportunities to improve the efficiency and effectiveness of both. He is a regular presenter at industry events and had been a lecturer for some 12 years in The Tax Institute’s structured education programs.
About Leigh Sales, Journalist and Author (facilitator)
Leigh Sales AM is a multi award-winning author and journalist at the Australian Broadcasting Corporation and for twelve years, anchored the network's prime time current affairs program 7.30.
She has been the face of the ABC's major events coverage, including federal election and budget nights. She has interviewed every living Australian Prime Minister and innumerable world leaders and celebrities from Hillary Clinton and Tony Blair to Paul McCartney and Elton John.
Leigh has held numerous roles at the ABC, including as Washington Correspondent, and is a three-time winner of Australia's highest journalist prize, the Walkley Award.
She's the author of four books, including the national bestseller Any Ordinary Day and most recently Well, Hello.
Leigh also co-hosts a wildly popular podcast with Annabel Crabb called Chat 10 Looks 3. It attracts hundreds of thousands of downloads monthly and has an associated facebook group with almost 40,000 members.
In 2018, Leigh was awarded the Order of Australia for her services to Journalism. She has a Bachelor of Journalism and a Master of International Relations and was awarded Deakin University's 2019 Lifetime Achievement Award.
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Azadeh Williams – Founder & Managing Partner, AZK Media