Tackling financial inequality is being touted as a productivity boost ahead of an economic think-fest designed to plot Australia’s future.
Raising revenue via tax reform and rethinking how community services are funded are on the wishlist of the Australian Council of Social Service ahead of the three-day Economic Reform Roundtable later in August.
Lifting GST levels to reduce reliance on income tax would “undermine fairness” and do nothing to improve economic efficiency, the council’s chief executive Cassandra Goldie said.
“The extra revenue we need to fund care and community services, schools, and an income support system that protects people from poverty must come from those with the most capacity to pay – not those doing it toughest,” she said.
“The government must not waste this historic chance to put Australia on a fairer, more productive and more sustainable financial footing.”
The council’s submission calls for a halving of the capital gains tax discount, a 15 per cent tax on superannuation retirement accounts and a commonwealth royalty payment for offshore gas.
It urges the government to strengthen the not-for-profit sector by supporting digital transformation and making service users the centrepiece of governance and program design.
All policies developed at the roundtable should be assessed on how they improve the wellbeing of people and the natural environment while taking gender and other factors into account, the council said.
“We must better prepare and train people for jobs and finally lift income support to levels that don’t trap people in poverty and destitution,” Dr Goldie said.
The Productivity Commission has proposed cutting the income tax rate to 20 per cent for firms earning less than $1 billion while introducing a five per cent tax on cashflow, which it says would reap $14 billion without worsening budget sustainability.
But business groups argue productivity will not be fixed by taxing companies and making Australia less competitive.
Treasurer Jim Chalmers said finding ways to afford tax reform was crucial.
“Some people have embraced that challenge. Others haven’t,” he said.
“It’s a good thing (the commission) is testing some of these difficult ideas and trade-offs … I’m not surprised not everybody forms an orderly queue, but it’s an important input.”
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