Allegra Spender (Wentworth, Independent) Share this | Hansard source

I commend the member for Curtin for putting forward this really important MPI; for her advocacy in the previous parliament, and this parliament, on the need to make sure our system works for every generation; and for her bravery in speaking up on tax. I'm also very proud to have spoken up on tax and to have then delivered a tax green paper last term, because tax has been the missing element of so many of the issues facing younger generations, and we need the major parties to step up and get real and courageous about the changes that need to be made.

It was great to see the Treasurer, out of the Economic Reform Roundtable, acknowledge that the tax system is at the heart of intergenerational inequity as well as absolutely critical to productivity. Now that he has made that admission, it is time for the parliament to get behind this in terms of driving real change, and I urge the opposition to engage constructively in this discussion. That's certainly what I expect will happen from the crossbench, because the crossbench has been driving this debate from the start. This is because tax matters, and, frankly, the future of every generation, including those young people in our country right now, really matters, and they're struggling. Right now, only eight per cent of Australians think that the next generation will have a better standard of living than their parents. This is something you hear every single day on the street. This is really rooted, I think, in three key problems.

Firstly, we have flatlining productivity. Wages won't grow and generations won't be more prosperous unless we can get that productivity moving, and tax matters to productivity.

Secondly, we have a tax system that is unfairly weighted towards being dependent on younger working Australians while their wealth is going backwards compared to different generations. The income tax system is not working for driving incentives and driving businesses, nor is it working for making sure that young generations can get ahead.

Finally, we have a tax system, and an overall system, which is not driving climate action. This gets to the heart of intergenerational inequity. Who's going to be paying the bills for climate adaptation and change? It is the current younger generations and future generations. If we don't take action now, it is a problem, and we know that the tax system can help drive this.

Finally, a piece which is outside tax but is absolutely relevant is fiscal discipline because, if we lade our current generations with debt, we know that they have to pay it off in the future. So this goes to spending as well as tax, in terms of restraint in spending, but I do want to spend the rest of the time really focused on tax because it's absolutely critical.

Firstly, we need a tax system that drives business investment. We are seeing business investment at record lows, and the incentives for business investment are not there. We know that the tax system, in terms of its high headline rate, is not working, and its complexity is also actually stopping investment at the level that we need to see from both international and domestic companies. This has got to be a key focus for tax reform for the government. This is where I'm urging them to focus.

Secondly, I particularly wanted to focus on our income tax system, because we have a tax system that's just not working for every generation. We have a tax system which—I think quite unintentionally—has led to a situation where, in the last 10 years or so, the wealth of households over the age of 65 has grown by around 50 per cent, while the wealth of households under the age of 30 has pretty much flatlined. We have a tax system that is decreasingly relying on older Australians, despite the fact that we know that we are ageing as a population. In the 1990s, around 30 per cent of people over the age of 65 paid income tax. Now, it's only 17 per cent. When we know that our population is rapidly ageing, we've got to know that that is not going to work. We know that our young people are struggling to achieve the same milestones their parents did. They have a 20 per cent lower chance of owning their own home when they're 30 to 34 than previous generations, and this is particularly affecting less wealthy younger Australians.

The tax system is really at the heart of this because, currently, the only way that we are ever going to get back to a budget surplus is through indexation, which is an income tax on younger working people. So the only way we're planning to fix our fiscal deficit will actually have more impact on younger working Australians. These numbers do not add up, and this is why serious tax reform is needed.

The member for Curtin has been advocating on GST, and I think it is absolutely essential that we do consider the breadth of taxes, not just a narrow cast, which some in this House want to do, because, if we are going to fix this tax system to drive productivity, to drive fairer outcomes for younger Australians and to drive climate action, we're going to have to look at the breadth not the narrow.

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