5 years ago
INDEPENDENT REPORT BACKS LABOR’S TAX PLANS
CHRIS BOWEN MP
One of Australia’s most eminent independent economic think tanks has today backed Labor’s calls to reform unfair and unstainable tax concessions to help improve the social compact and to build fiscal buffers to help withstand future downturns.
In its report release today – Sustainable Budgets: Underwriting Australia’s social compact – CEDA specifically recommends reforming the capital tax discount and removing imputation refundability.
“To the extent that there is a need to increase taxes to address a revenue shortfall or fund tax relief, proposals should align with broader principles of good tax design, including simplicity, equity, revenue adequacy and efficiency. Limiting work-related deductions, full volumetric taxation of alcohol, reducing the capital gains tax discount and removing dividend imputation refundability would move Australia’s tax system in this direction”’ [Recommendation 4.1]
CEDA has also belled the cat on why the Scott Morrison led Coalition is so opposed to reforming imputation refundability – not only do the current arrangements benefit the well-off, they also effectively erode the tax paid on company profits.
“the practical effect is that no tax is paid on part of a company’s profit” [page 71]
“people with low taxable incomes (based on concessional superannuation tax arrangements), but higher actual income streams and wealth enjoy the greatest benefit from refundable credits” [page 72]
This is a stinging rebuke to the shrill scare campaigns that have been run by Scott Morrison and Josh Frydenberg in recent weeks.
It says a lot about a government that at a time when everything is going up except people’s wages, the Government spends all its time protecting concessions for the wealthy.
In further backing to Labor’s broader reform program, CEDA also backs in Labor’s calls for intergenerational report to be undertaken by the independent Parliamentary Budget Office, while also giving a nod to concessions like Labor’s Australian Investment Guarantee, advocating for “more generous allowances for new investment in the corporate tax system”.
CEDA rightly argues that to protect and deliver Australia’s social compact through the provision of adequate social security and welfare, health, education and other services that are fundamental to people’s wellbeing, difficult decisions are necessary.
Labor is the only party willing to make the difficult decisions to fund important public investments, to provide tax relief to those who need it and to build bigger fiscal buffers at a time when economic circumstances allow.
In its report release today – Sustainable Budgets: Underwriting Australia’s social compact – CEDA specifically recommends reforming the capital tax discount and removing imputation refundability.
“To the extent that there is a need to increase taxes to address a revenue shortfall or fund tax relief, proposals should align with broader principles of good tax design, including simplicity, equity, revenue adequacy and efficiency. Limiting work-related deductions, full volumetric taxation of alcohol, reducing the capital gains tax discount and removing dividend imputation refundability would move Australia’s tax system in this direction”’ [Recommendation 4.1]
CEDA has also belled the cat on why the Scott Morrison led Coalition is so opposed to reforming imputation refundability – not only do the current arrangements benefit the well-off, they also effectively erode the tax paid on company profits.
“the practical effect is that no tax is paid on part of a company’s profit” [page 71]
“people with low taxable incomes (based on concessional superannuation tax arrangements), but higher actual income streams and wealth enjoy the greatest benefit from refundable credits” [page 72]
This is a stinging rebuke to the shrill scare campaigns that have been run by Scott Morrison and Josh Frydenberg in recent weeks.
It says a lot about a government that at a time when everything is going up except people’s wages, the Government spends all its time protecting concessions for the wealthy.
In further backing to Labor’s broader reform program, CEDA also backs in Labor’s calls for intergenerational report to be undertaken by the independent Parliamentary Budget Office, while also giving a nod to concessions like Labor’s Australian Investment Guarantee, advocating for “more generous allowances for new investment in the corporate tax system”.
CEDA rightly argues that to protect and deliver Australia’s social compact through the provision of adequate social security and welfare, health, education and other services that are fundamental to people’s wellbeing, difficult decisions are necessary.
Labor is the only party willing to make the difficult decisions to fund important public investments, to provide tax relief to those who need it and to build bigger fiscal buffers at a time when economic circumstances allow.