Tim Neilson, CTA
Special Counsel, Greenwoods & Herbert Smith Freehills
Transcript, 14 March 2019: Comments on the upcoming Federal Budget 2019-20
Our Pre-Budget Submission focused on distortions that the tax system creates. For example, we're way at one end of the spectrum compared with OECD countries in our reliance on income tax, and way at the opposite end in the way we don't rely very much on consumption taxes.
So, if you're that far out of sync with other people, it's worth having a look and see where there might be a good reason to change.
Other things include the way the income tax system operates with the complexities of Medicare Levy, and suggesting that that should just all be abolished and wrapped up in one single set of rates, rather than having the complexities of thresholds, and rebates, etc.
Other things included, pointing out that, we rely on 10 taxes for 90% of our revenue, and questioning whether the other 115 taxes are all actually justified - given the compliance costs. So, that's the general theme of our Pre-Budget Submission.
As to how much of that will get into the budget, it's an election year. Politicians probably won't want to jump on anything, unless it's been focus grouped, and poll tested.
I'm told that when The Institute made its very, very first technical submission to government, we did eventually get our own way, but, it took fifteen years. So, whether you regard that as being encouraging or discouraging is up to you.
As to what's in the Federal Budget, I haven't heard any leaks so far, but interestingly in the Mid-Year Economic and Fiscal Outlook Statement, there was a reference to ‘Adopted, but not yet announced, government measures’ which would reduce revenue by something like 9 or 10 billion dollars. So, maybe there's cause for optimism that we might see some tax cuts, or rather relief from, the tax burden.