Tim Wilson (Goldstein, Liberal Party) Share this | Link to this | Hansard source

Australia needs to talk income tax. Many young Australians may not pay a large share of income tax now, but when their careers kick off they'll be copping a nasty bill. Half of all federal tax comes from incomes and is mostly paid by working-age Australians. That means younger Australians will be disproportionately hit with rates of up to 47½ cents in the dollar. That means paying back a higher share of previously incurred debt, a higher share of our nation's debt, a higher share towards paying for an ageing population. Meanwhile, those living off assets will pay half the rates or less. You can imagine it: you get through school and maybe some tertiary education, you get a job and year on year you're paying off your HECS debt and facing a rising tax bill, just when you're trying to make sure you can fund a family and buy your own home.

The Productivity Commission's 2015 Tax and transfer incidence report highlighted the problem. Total expenditure from an ageing population will increase significantly—pensions, health care, the Pharmaceutical Benefits Scheme and aged care. Concurrently, income tax on younger Australians will increase substantially to fund it. Income tax is designed to have progressive rates, but in truth it is unconscionably regressive, hitting young people to fund many who are asset rich. Young Australians are well and truly drawing the short straw. It's time to help young Australians. It's time for serious tax reform.