Bill Shorten (Maribyrnong, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

I would like to thank all of the speakers who have commented on the tax forum thus far. Last week, the Gillard government convened a forum of almost 200 people here in our Parliament House in the nation's capital to discuss the next steps in tax reform. It proved to be a sophisticated, level-headed, constructive dialogue. It showed we can have a gentler form of debate about our economic future when the belligerent political cynicism and negativity is out of the way. It confirmed that we should be optimistic about our future, even while being realistic about some of the considerable challenges which lie ahead.

We drew together representatives from across our nation and we heard views articulated from the perspectives of the boardroom and the factory floor, small business and the not-for-profit sector, academia and the kitchen table. No topic was off limits for attendees and the conversation covered a broad range of ideas. We did not all agree with each other—it would have been pointless and sterile if we had—but I have to report that we did find areas of common ground across longstanding political and ideological divides. We will progress a number of these issues coming out of the forum as part of the second wave of tax reform.

Tax reform has been a central part of the Labor government's economic agenda since we were elected in 2007. After those long years of conservative neglect, we have a plan and it is being implemented. Certainly Australians had seen largesse, bankrolled by the windfall gains of repeated revenue upgrades from mining boom mark I during the Howard years, but Australians had not seen anything approaching real tax reform, I suppose, since the GST for all those long years until we were elected. It was Labor who commissioned Australia's Future Tax System Review, chaired by Ken Henry, to reinvigorate the tax reform debate, to give us a good economic story and theory of direction and purpose. Having received the tax review, we set about a broad and ambitious agenda of tax reform. Of course, one of the key issues is our response to the pressures of a multispeed economy. We have adopted several of the thrusts of the tax review. One is that we get a better return for Australia's non-renewable resources through a profits based tax. Another is cutting business tax to help every incorporated enterprise in the country with a lower rate of corporate tax, and a billion-dollar tax break for our hardworking small businesses. Thirdly, we have saved some of the gains to prepare for an ageing population by boosting superannuation and making the concessions fairer. Fourthly, in very recent times we have been promoting participation by tripling the tax-free threshold from $6,000 to $18,200, and the Treasurer has said that we will look at increasing this further in the years ahead. Fifthly, of course, we have implemented significant tax cuts, which see the person earning $50,000 today paying $1,750 less tax than they were paying when the Howard government was in. Indeed, even with the flood levy, which is very important, we are seeing people on $80,000 who are paying $1,400 less tax than they would have been paying back in 2007.

We have implemented a tally of 32 of the Henry review reforms already. We are doing this at the same time as keeping tax, as a share of the GDP, well below those high levels that we inherited. This year tax is expected to be 21.8c in every dollar of our GDP, well below the 23½c that we inherited from the other side.

In conclusion, at the forum we were focused on the future. We recognised that parts of our economy are under significant pressure and that responding to the forces of an economy in transition has to be our priority. There were different ideas on how to respond. There were different views about what should be the form of tax changes, but there was consensus, such as targeting measures improving the tax treatment of losses, and consensus about the best way to develop these ideas through a collaborative working group.

At the end of the forum, the Treasurer announced a business tax working group chaired by Chris Jordan. We will look at the losses of business and we will fund changes from within the business tax system. We will look at equity deductions and compare them to alternatives like changing the rate. We have a plan for the states to work together. We have discussed reform for the not-for-profit concessions, the rules governing superannuation annuities and a new centre of research excellence, and we will be establishing our tax system advisory board. This forum showed that when we gather people of goodwill, even if they have differing ideas, we can accomplish far more, and we encourage the opposition to join the reform locomotive. (Time expired)

Main Committee adjourned at 17:48

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