Much needed wholesale tax reform, to lock in prosperity for decades to come, is now much harder following the Government’s decision to reverse legislated tax cuts months before they were to be implemented, according to the Business Council.
BCA Chief Executive Bran Black said public confidence had been undermined because the previous tax cuts were voted into law, given an ironclad guarantee, and supported at two elections.
“This decision to overturn an iron clad guarantee makes urgent wholesale tax reform harder because it undermines public trust,” Mr Black said.
“The Stage 3 package rewarded aspiration and started to address bracket creep with a simpler system, giving Australians the confidence to get ahead based off policy that was already law.”
“The changes do not address any of the real issues with our tax system and simply kick the can down the road.
“Personal income contributes too much of our tax revenue, up from 42 per cent in 2001 to 51 per cent today, and as the Intergenerational Report highlighted, Australia can't afford to pay for its future on current projections.
“Genuinely addressing bracket creep is also about intergenerational fairness for young taxpayers who will earn more money in the future.
“We currently have just under four people working in the economy for every person over the age of 65 and in 1980 that figure was 6.6 and by 2060 it will be 2.7 people.
“In 2060 we’re also projected to face an extra $140 billion in cost pressure while having less people working to pay for more and if those facts don’t support the need for urgent and comprehensive tax reform, nothing will.”