Winston Churchill once said “for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
In coming weeks, the Abbott Government will release its long-awaited tax white paper. This couldn’t come any sooner, with Deloitte Access Economics forecasting a $35 billion budget blowout, with deficits ‘as far as the eye can see’.
It’s clear to most Australians that the current system is not delivering the revenue we need to provide the services we need – both now and in the future.
Taxation reform is urgently needed to address many of the great challenges we face as a nation: employment creation, sustainable growth and investment, affordable housing and cost of living pressures, as well as our international competitiveness. The complexity and inefficiency of our tax regime has an impact on all these challenges.
The property industry, for example, is one of the most highly taxed of all sectors. Canberra property owners continue to pay an unreasonable and unsustainable level of taxes, fees and charges. This has a dramatic impact on housing affordability and cost of living, particularly for those that can least afford it.
Representatives from business and community sectors are currently in dialogue to explore areas of agreement and disagreement about tax reform – from the tax treatment of personal and retirement income to company income tax rates and raising the GST. We all in furious agreement of the need for tax reform.
This isn’t about big business looking for ways to reduce its tax burden. It’s about looking at how we can encourage inclusive growth that supports everyone in the community.
Without taxation reform, we can expect a widening gap between community expectations for healthcare, education, infrastructure investment and welfare support and what our government can afford.
We must move away from the current mindset which is centred on ‘what’s in it for me’ and instead work together to liberate our nation from a taxation regime that is stifling our potential and preventing fair, equitable and sustainable growth that will benefit all.
Catherine Carter is ACT Executive Director of the Property Council of Australia