Ian Goodenough (Moore, Liberal Party) Share this | Hansard source

In summing up, the coalition government recognises that, in order for the Australian economy to prosper in response to increasing competition from emerging economies in our region, our nation needs the right tax system to generate economic growth yet provide an equitable system of services and welfare for those in our community who genuinely need it. Australians want a tax system that will enable them to achieve their full potential rather than hold them back.

Since being elected, the coalition government has repealed the carbon tax and the mining tax which were affecting industry. There are more than 125 different taxes in Australia. The top 10 taxes raise 90 per cent of the revenue whilst the remaining 115 taxes raise only 10 per cent yet it is difficult to abolish some of these taxes because they are designed to curtail activities which have detrimental consequences, such smoking and alcohol consumption or have social equity implications such as taxes on luxury goods. The overall objective is to implement lower, simpler and fairer taxes.

Tax reform is linked to social policy. The Prime Minister has said that the objective of any tax reform is to ensure that Australia remains a high-wage, generous, social, safety-net economy that is creating jobs. Encouraging greater workforce participation and civic mindedness is at the core of delivering a lower tax burden on others. Hardworking Australians and small business owners must not be overburdened by taxation. The challenge is to generate growth and provide incentives to work, save and invest. Those on this side of the House want to create a better tax system, not a bigger tax burden.

The coalition government are adopting a methodical, consultative approach to taxation reform. We are not in the business of ruling individual tax measures in or out in isolation before proper consultation and debate can occur. The Prime Minister and Treasurer will seek a mandate for substantive tax reform at the next election. The government are involved in good-faith discussions with the states and territories on how we can improve our taxation system. In particular, in my home state of Western Australia, the allocation of a fairer share of the GST is a priority to support the provision of infrastructure over a vast area that services our export-earning mining, energy and agricultural industries. No decisions have been made to alter the GST.

The 2015 Intergenerational report indicates that, by 2055, the ratio of Australians of traditional working age to persons aged 65 and older will be less than three to one compared with the current ratio of 4.5 to one. This presents an emerging problem because Australia has a relatively high reliance on income taxes, higher than nearly all other developed countries as well as most of Australia's Asian competitors. Personal income tax accounts for 39 per cent of tax raised in Australia, while company taxes make up only 19 per cent of tax revenue. A dozen companies pay around one-third of Australia's company tax.

Many of Australia's international competitors and trading partners are reforming their tax systems to make them more competitive. The digital economy and globalisation present significant challenges for the effectiveness of the tax system. Capital is more mobile and highlights the need for a competitive corporate tax regime to encourage investment, promote higher economic growth, improve living standards and improve our international competitiveness. Comprehensive tax reform has the potential to lift Australia's gross domestic product more than any other government reform.

By contrast, Labor has little to offer the tax debate when it comes to trying to tighten the government's belt and actually cut taxes. Labor has, so far, promised taxes that will raise just $7.6 billion over the forward estimates period and announced spending worth $44.1 billion over the same period.

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