AceBreakingNews – Left-of-centre think tank The Australia Institute is hosting a revenue summit in Canberra today

Ace Press News From Cutting Room Floor: Published: Oct.27: 2023: TELEGRAM Ace Daily News Link https://t.me/+PuI36tlDsM7GpOJe

Unsurprisingly, given the hosts, the key theme of the summit was the urgent need to raise more revenue to pay for government services.

Probably the most interesting speaker was former finance department boss Michael Keating (no relation to former PM Paul).

He says Australia needs to dramatically increase its tax take, rather than cut it (as will happen when the already legislated stage three income tax cuts take effect next July).

“Even if Australia increased its taxation revenue by as much as another 4% of GDP, as I’ve suggested is needed, I contend that that would not harm economic growth.

“Taxation in Australia would still only be raising about the same amount of revenue relative to GDP as the OECD average, and Australian taxation would still be lower than in Canada and the UK.”

And here’s how he thinks it could be done.

“First: a high priority would be to rely more on those taxes which improve efficiency, such as a carbon tax, congestion charging and substituting a land tax for stamp duty.

“Second: Australia raises relatively little from its GST compared to other countries. [It] would be possible and arguably desirable to raise more by a combination of broadening the GST tax base and raising the GST tax rate.

“Third: resource rent tax. So the community shares some of the super profits that mining companies can make due to fortuitous circumstances not from their own effort or initiative.

“Fourth: the avoidance of company tax has become an industry. As I said, I’m not an expert, but urge close consideration of Ross Garnaut’s proposal to substitute a tax on corporate cash flows for the present company tax.

“Fifth: loopholes in the personal income tax system, such as inadequate rate of capital gains taxation and negative gearingshould similarly be closed.

“Sixth, and finally, we need more progressive income tax rates. The starting point should be to at least adjust the stage three tax cuts.”

If you don’t know what the stage three tax cuts are, I did a handy primer video earlier this year with Angelique Lu.

That last proposal also got support from independent MPs Monique Ryan and Dai Le.

“For the government, they really can’t go ahead with it, shouldn’t go ahead with it,” said Dai Le, the member for Fowler, a traditionally Labor electorate in south-west Sydney.

“And think about it, especially for a Labor government by the way. Labor is supposed to be for the working Australians, right?”

Ms Ryan, who defeated previous treasurer Josh Frydenberg in the wealthy Melbourne electorate of Kooyong, may not be popular with some of her high-income constituents for also backing the wind-back of stage three.

“The 2019 stage three tax cuts were a booby trap for our economy,” she argued.

“Led by Malcolm Turnbull, and by Scott Morrison and Josh Frydenberg, they were the wrong policy at the wrong time then, and worse now.

“They will be inflationary, they’ll suck revenue out of a tax system at a time when we need more revenue to set up … a country for the future to drive our transition to a new clean energy economy and to find the revenue that we need for aged care, child care, disability care and medical care.

“This at a time when debt costs cost us more to service our debt than we have for a long, long time.”

Her suggestion? To retain the 37% tax rate on each dollar earned between $120,001-200,000, which is being abolished as part of stage three.

I went down to Canberra to cover last year’s event, and that was one of the key suggestions put forward by some of the tax experts I spoke to then.

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