2 days Ago By Shane Wright
A key crossbench MP has vowed to use a hung parliament after the next election to drive tax reform, arguing the current system is hurting young people to the point they are giving up on having families and unable to buy a home. As Treasurer Jim Chalmers conceded young Australians had borne the brunt of the challenges of the last few years, Sydney-based MP Allegra Spender said the tax system and concessions such as negative gearing were partly to blame for the collapse in birth rate and the dramatic fall in homeownership among those in their 20s and 30s. Allegra Spender, with Ken Henry next to her, launches a green paper on tax.
Credit: Dominic Lorrimer On Thursday, Spender became the first independent MP to ever release a green paper into taxation reform, built upon 18 months of discussions with community groups, tax experts, business organisations, unions and individuals. Fellow independents Sophie Scamps and Kate Chaney attended the release of the paper. Spender said it was clear the tax system was a key reason for some of the largest problems facing the country, with working people forced to carry an increasing share of the nation’s tax burden.
“If I am returned at the next election in a minority government setting, a commitment to a process for tax reform will be a key consideration for me in any decision on supporting supply and confidence,” she said. Spender said the tax burden on wages hit young people the hardest, making it almost impossible for them to get into the housing market. “Young people are making profound choices about their lives because our economic system is not working.
Australia’s fertility level is our lowest ever,” she said. “Young Australians can’t have children because they can’t see a secure future. They can’t own a home.
They’re cutting back on discretionary spending because productivity and real incomes are stalling, while wages and earned income carry more and more of the tax burden.” On housing, Spender’s green paper found that reducing the concession on capital gains tax and narrowing negative gearing could both fund cuts to personal income tax that would then help people save to get into the housing market. The paper argues there are six priority reform areas that could deliver major productivity gains to the economy.
Treasurer Jim Chalmers admits young people have faced intergenerational challenges. Credit: Dominic Lorrimer These include lower taxes, rebalancing tax arrangements to favour homeownership rather than investment in existing dwellings, providing incentives for innovation and investment, overhauling the tax system so it does not penalise specific demographics, using the tax system to drive the shift to zero-net energy and creating a tax reform commission. The author of the last major tax reform paper, former Treasury secretary Ken Henry, said the tax system had clearly deteriorated since his work was released to the public in 2010.
“We’re in a worse place now than we were then,” he said. Chalmers said the government recognised that one of the biggest intergenerational issues facing young people was the cost of housing. “There is an element of intergenerational unfairness in our economy, but we also need to recognise that there’s more than one way to address that,” he said.
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