Kate Chaney (Curtin, Independent) Share this | Hansard source

After the economic roundtable two weeks ago, the Treasurer committed to developing a process for longer term tax reform focused on a fair go for working people, including, in intergenerational equity terms, an affordable, responsible way to incentivise business investment and making the system simpler and more sustainable. I welcome this commitment and regard it as a real win for the crossbench. Throughout the last term, I and other Independents consistently called for both long-term tax reform and a focus on intergenerational fairness. In fact, we were the only ones calling for tax reform. These issues were too often ignored by the major parties. The challenge now is to maintain pressure on the government to follow through—and on the coalition to bring its own solutions—on intergenerational equity and tax reform. That's why I bring forward this matter of public importance—to maintain momentum for real, structural tax reform in the coming years.

Keeping a lid on spending must, of course, be part of budget repair, as must productivity, but these are not the only levers. We also need to shift the burden to different taxes that demonstrate the principles of intergenerational equity, business investment and simplification. As we build public appetite for reform, we need to avoid being sucked into the rule in, rule out game that characterises so much of our politics. Every option should be on the table. While an individual measure may have a negative impact on a particular cohort, other measures within a broader package may make that same cohort better off, so we must consider tax reform packages as a whole.

Today, I'm putting forward some options that should be on the table when we look at how to shift the tax burden. They're informed by evidence, by international best practice and by the voices of the people of Curtin. Changes to negative gearing and capital gains tax concessions are increasingly supported by a majority of Australians. In a survey of Curtin residents, 76 per cent supported reform in this area. People recognise how seriously our housing system is broken and how current tax settings encourage Australians to treat housing primarily as an investment, not as a home. Reviewing these concessions must be part of any serious tax conversation.

In Australia, successive governments have relied on bracket creep as their only plan for budget repair. This stealth tax disproportionately burdens younger working Australians while discouraging productivity. Most OECD countries index their tax brackets to inflation, and Australia should do this too. It would ensure governments can no longer rely on hidden tax hikes and must instead make a case for every new spending decision.

The GST is often dismissed as regressive, but a package can be designed that is progressive. I worked with Professor Richard Holden and the Parliamentary Budget Office to develop an example of a progressive GST combining an increased rate with a basic supplement paid to every adult. This can be structured so that the majority of people—those with zero, low or middle incomes—would be better off. The key message here is that tax reform needs to include reviewing GST rates and exemptions.

Stamp duty is one of the most inefficient taxes we have. It discourages mobility, locks people into housing that no longer suits them and makes it harder to use our houses well. Transitioning to a broad based land tax in partnership with the states would enable better housing outcomes. Again, Curtin residents are ahead of the politicians. In my community survey, 65 per cent supported this idea.

Australians are not being fairly compensated for the use of our natural resources. Last year, no tax was paid on two-thirds of the gas exported from Western Australia. PRRT revenue this year will amount to just 0.08 per cent of GDP, which is a staggeringly low return for resources that belong to all of us. It's time for a serious review of resource rent taxes, particularly for fossil fuels that not only deplete our finite resources but also impose global climate costs. Too many multinational corporations shift profits offshore and escape paying their fair share.

The structure of global markets is changing. This undermines fairness, erodes our tax base and disadvantages local businesses that do play by the rules. Australia must work with other countries and strengthen its laws to ensure that we're appropriately taxing the digital economy and multinationals that benefit from access to the Australian market.

Finally, carbon and pollution taxes remain the most economically efficient way to drive a cleaner and more sustainable economy. If we're serious about finding the cheapest and fastest path to net zero, then we cannot rule out these tools. Shifting the balance from income tax to some of these taxes will ensure younger Australians are given a fair go, drive productivity and innovation, and secure Australia as a prosperous and thriving country for decades to come.

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