Federal Budget Tax reform

No Federal Budget winners while tax system remains flawed

Sydney, 25 OCTOBER 2022: Labor’s updated Federal Budget 2022-23 was delivered as expected – laying out the Government’s position on economic policy – but there are no winners while our tax system remains broken and unfair, says The Tax Institute’s General Manager of Tax Policy and Advocacy, Scott Treatt, CTA.

‘As expected, this Budget sets out Labor’s position on the current economic health of Australia and gives us an idea of their approach and attitude towards fiscal policy. It’s likely that the next Budget in May is where we will see more significant change,’ Scott says.

‘There are no winners and losers from tonight’s Budget. In fact, all Australians are losing, and will continue to lose until there is a commitment to a better, fairer tax and transfer system.’

A small handful of announced but unenacted tax measures were addressed in the Budget, providing clarity to the tax profession and their clients.

However, this leaves many key tax measures needing further and deeper attention, which is only possible with adequate funding for the organisations charged with designing and upholding tax law. While the funding announced in tonight’s Budget is temporary, permanent and reliable funding is needed to allow for stable administration of our tax system and to improve our tax laws.

‘The funding of government agencies remains in the spotlight with certain programs including the Tax Avoidance Taskforce being extended in the Budget. We remain concerned about temporary funding linked to collections for Government agencies like ATO and Treasury. These important bodies need their base funding levels replenished and reinforced to provide a minimum level of service and support, particularly in the areas of law design, guidance, disputes and customer service,’ Scott says.

‘These are the people who design our tax and transfer system – who decide matters of policy for superannuation, small businesses, income tax and more. They need the resources to properly review and improve tax policy so our system can be fair, equitable and sustainable. Positive change can’t happen when their hands are tied by poor funding.’

Overall, the tax and transfer systems need to be reviewed and reformed in a de-politicised process that focuses on the best outcomes for taxpayers, communities and the wider Australian economy.

‘For the tax and transfer system to not only be fair and efficient, but to work effectively in its role underpinning our economic health, we need to have frank conversations about fundamental, holistic reform. And those conversations need to lead to action, sooner and not later,’ says Scott.

  • Federal Budget
  • Tax reform

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