Kate Chaney (Curtin, Independent) Share this | Hansard source

So what needs to be done about our tax system? We could do worse than to start with the recommendations made by Ken Henry 12 years ago. The issues identified then are generally still the same or worse than they were. For example, our tax system could be simplified to five key types of tax: personal income tax; business income tax; consumption tax; economic rents from natural resources and land; and taxes to address social, environmental or economic costs, such as tobacco, gambling and carbon emissions. We could get rid of many complexities, such as payroll tax, insurance tax and stamp duty.

We need to revisit the rate and breadth of GST and ensure that any changes are not disproportionately borne by lower-income earners. We need to look at how much taxpayers are earning from the development of our natural resources, especially in relation to fossil fuels that damage the planet. We need to revisit the tax treatment of housing to ensure that the main purpose of housing is to provide homes for people. We need to think about the balance between old and young Australians and make good on the intergenerational bargain to support people at the vulnerable beginning and end of life in exchange for the promise that we'll keep making things better.

Doing this will require the cooperation of federal and state governments. It will need to be community led, not just negotiated between government and business. It needs to be holistic. We can't look at one change to the tax system in isolation; we need a long-term, broad perspective so the whole system works better. For example, changes to GST can't be discussed without also discussing transfer payments to ensure the change is not regressive.

Over the last two decades, economic reform has slowed significantly. The Grattan Institute's Gridlock report published last year showed that both quantitatively and qualitatively we've lost our ability to reform. Reform has dried up for a few reasons: it can be politically unpopular; winning elections has become more important than doing what's best for the country; the focus tends to be on the immediate economic consequences, not the long term; public opposition gets louder faster with social media; and ministerial advisers tend to be more focused on minimising political damage than the public interest. Change has been driven more by ideology than by evidence. Vested interests have the potential to skew reform agendas, with climate change responses being the prime example. We've seen a worrying trend. Instead of deciding what's in the long-term public interest and then working out how to sell it, governments have begun by working out what people want to hear, irrespective of the long-term consequences. But I'm optimistic that, in this new government, we'll see some changes to this trend.

The stage 3 tax cuts may be the first serious test of which matters more: good policy or good politics. Institutional reforms can help kickstart economic reform. Increasing trust in politicians will help, through an effective and efficient National Anti-Corruption Commission and a reclaiming of politics by communities. We need to rebuild the public sector as frank and fearless advisers. I look forward to working with government in this term to start the community conversations we need to reform our tax system.

A brief discussion of the positive aspects of this budget: I welcome the inclusion of Statement 4 of Budget Paper No. 1, Measuring What Matters, an initial discussion of introducing an overarching wellbeing framework with a centralised set of indicators. This is a good start. We need different ways to measure progress that better reflect what we actually value. We need to think of progress as equitable, sustainable wellbeing, not just GDP. Countries around the world have started thinking differently about this, including Wales, Scotland and New Zealand.

The missing piece in the discussion outlined in the budget is that this needs to be an open, collaborative process, not something produced by Treasury with input only from the experts. Governments must engage with communities across the country to find out what Australia we want, what matters to us. This collaborative process is important not only to ensure that our framework reflects the domains we value but also to rebuild trust and engagement in our democracy. If we are involved in deciding what we value, we're much more likely to understand the trade-offs and consequent decisions.

On housing, the Housing Accord announced sounds good, with an aspirational target of a million new homes by 2029, but there's little indication of how we might reach this number. It depends a lot on the private sector. In terms of what government is actually committing, there seems to be the 30,000 social and affordable houses committed under the Housing Australia Future Fund and an 10,000 additional homes under the Housing Accord. With 27 per cent of renters and 13 per cent of mortgage holders in Curtin spending more than 30 per cent of their income on housing, I'd like to see more long-term planning on how we address affordability.

One of my campaign platforms was to increase government accountability. I'm glad to see more resources allocated to institutions designed to keep government accountable, including the National Anti-Corruption Commission, the Climate Change Authority, the Royal Commission into the Robodebt and the Australian National Audit Office. It's good to see some attempt to address the growing culture of outsourcing the strategic work from the Public Service. The intended saving of 3.6 billion on consultants, contractors and lawyers sounds good, but it will need to be accompanied by adequate resourcing of the public sector at the senior level. There's not much detail on whether this will happen.

Reform of the discretionary grants program has started, with the Community Development Grants Programme and round 6 of the Building Better Regions Fund being scrapped. Decisions made by the previous government at the discretion of the minister are also being reviewed. There's further work to be done to improve transparency on grant allocation, and I'll be seeking further clarity on this.

My community cares deeply about climate action. Setting the emissions reduction target was the first step, and now in this budget we see some of the work beginning to drive decarbonisation, build resilience and transparency, and ensure we have the governance structures needed to plan for the future. It's refreshing to see a level-headed, non-ideological discussion about the risks and opportunities presented by climate change. In relation to the opportunities presented by decarbonisation, the Reconstruction Fund will drive investments in new sustainable industries and add value to what we pull out of the ground. This is an important part of reshaping our economy. Critical minerals will be a key economic opportunity for WA and for Australia. It's good to see investments of $1 billion for the Value-Adding in Resources Fund, $50 million for a Critical Minerals Research and Development Hub, and $100 million to assist critical minerals producers to progress projects. With lithium exports expected to increase by a factor of more than 10 over the next two years, this is a good space to watch.

On transparency, the budget refers to commitments to improve climate transparency in both the private and public sectors. For the private sector, this will be done by internationally aligned and standardised climate disclosure requirements. For government, fiscal risks associated with climate change will be included in future budgets and intergenerational reports and in the annual climate reporting to parliament. There's obviously a huge amount more to be done to support the transition of our economy to a net-zero economy. The first thing we need to do is remove some of the mixed messages we're sending in the current budget. Fuel tax credits continue to be in the top 20 program expenses and growing by 30 per cent over the next four years. While this has some complexity, we will need to start phasing these fossil fuel subsidies out, rather than growing them, to drive a transition to renewables. Repurposing these credits to support smaller businesses to transition to renewables would be a better way to spend this money over time. Additional investments in gas exploration and infrastructure still appear in the budget and will need to be reduced.

The budget contains some good news for diverse parts of our communities, with some disappointments as well. The 32,000 Curtin residents who are over 65 will be glad to see the $2.5 billion investment in and regulation of aged care, as previously announced. The minor change to the number of hours pensioners can work without affecting their pension may benefit some too. I'm very pleased to see that $1.2 billion has been allocated for practical measures to close the gap and begin preparation for the Voice to Parliament referendum. I look forward to working with my community to build understanding of and support for a First Nations Voice to Parliament, to reset our relationship with First Nations peoples, and to close the gap on intergenerational disadvantage. There remains a significant sum allocated for maintaining detention centres in Nauru as a deterrent. I would prefer to see this go and for Australia to comply with its international legal obligations in relation to asylum seekers. In addition, numerous constituents contact me every week to find out when the government will provide hope for the legacy caseload of more than 30,000 people living in limbo on temporary visas. For students, there are 180,000 fee-free TAFE places in the care sector and digital economy and 20,000 new university places for students from disadvantaged backgrounds. These initiatives start the work needed to rebuild education levels.

At a local level, I'm glad to see the Western Australian Comprehensive Cancer Centre funded. This will add to our medical centre of excellence in Curtin and will increase access to top-quality cancer care. No other specific infrastructure projects in Curtin are identified in the budget. There are a number of local infrastructure projects within Curtin that are worthy of federal funding, and I will continue advocating for them and for greater clarity on future community infrastructure funding processes and criteria, to ensure that funds are allocated fairly. I understand some work is being done on this, so hopefully there will be greater transparency in time for the May budget.

In summary, the budget was generally sensible in the context of challenging economic times. Many of the economic challenges currently being experienced are outside the control of the government. There will be pressure to provide cost-of-living relief, and some short-term financial relief may be justified, but the big challenge ahead will be to maintain a focus on long-term reform, especially on tax and decarbonisation and to resist the pull of populist short-term fixes.

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