Tax reform derailed
Late last year, the Abbott government called for submissions on its tax reform white paper. Prosper was happy to help and offered ideas.
Since the call, the popularity of the government has plummetted and Tony Abbott’s leadership is shrouded in doubt. There is no confidence the government could carry the electorate with it in any direction. Difficult tax reform would likely arouse a storm of derision rather than a reasoned debate.
On Friday, Treasurer Joe Hockey told the AFR the tax white paper would be deferred until after the intergenerational report – taking it and its controversies off the table in the hope L/NP fortunes can recover.
Prosper has serious concerns about the equity and economic efficiency of the reform proposals reported in the media as coming from cabinet ministers – notably broadening the GST , which is a regressive tax. Our submission spells out why.
The ideal tool to moderate land bubbles and properly fund infrastructure already exists in the hands of state and territory governments: State Land Tax. Unfortunately, this tax has been so riddled with exemptions and concessional treatments it must be considered dormant. The states show no interest in, for example, removing conveyancing Stamp Duty or Payroll Tax – both very damaging tax bases – and funding this by also removing exemptions from SLT.
Prosper Australia’s Federal tax white paper submission