The CEO of the Australian Chamber of Commerce and Industry (ACCI), Kate Carnell, appeared on ABC’s Lateline last night, where she admitted that it is too easy for wealthy Australians to avoid paying tax due to Australia’s overly generous superannuation concessions and negative gearing:
EMMA ALBERICI: Kate Carnell, negative gearing, superannuation tax breaks – it’s too easy, isn’t it, for people with high incomes in Australia to shrink their tax bills?
KATE CARNELL: Look, what we’ve got to do is make sure that everyone’s paying their fair share of tax. So even for the …
EMMA ALBERICI: Can I just draw you back to that question? Do you agree?
KATE CARNELL: Yeah, look, we do.
EMMA ALBERICI: You represent some of the highest income earners in the country. Do you agree that it’s just a bit too easy in Australia for them to reduce their tax bills.
KATE CARNELL: There are certainly some areas such as superannuation that is too easy for high income earners to move money into superannuation and pay 15 cents in the dollar rather than 45. And so we agree with that. So we’re not shirking – we’re not going back into our corners and saying, “Look, the only taxes we’re willing to look at are the ones that don’t affect us.” We’ve got to have everything on the table here if we are to have reasonable tax reform. Remember that the Intergenerational Report showed us that today I think we’ve got 4.5 taxpayers for every person aged over 65. In 40 years, that will be 2.7 people paying tax for every person over 65. We’ve got some real generational problems here and everyone’s got to pay their fair share, including people on high incomes.
ACOSS Chief, Cassandra Goldie, who also appeared on the program agreed:
CASSANDRA GOLDIE: Well, look, I’m encouraged by Kate’s comments about the overall exercise here. I mean, I think this is one of the times when as a nation – the business community is also saying it’s not about a race to the bottom of just cutting taxes, but we certainly do want to get a more efficient tax system, and this area of making sure that at the higher end we are getting the right level of contribution. So where we’ve got an example of negative gearing and capital gains arrangements which are problematic clearly from a housing affordability point of view and it’s so attractive for people on higher incomes in terms of minimising your tax bill, this is a great time for us to be prepared to look at that. Now, ACOSS is not saying get rid of it altogether. We put forward a very modest proposal about how you would grandfather existing arrangements and how you would build off the recommendations from the Henry tax panel to quarantine it in a more carefully structured way to help drive better investment into the productive economy, which I think is what Kate and I both really want to see.
Here we have key lobby groups representing business and the disadvantaged agreeing that Australia’s tax concession system – superannuation and negative gearing, in particular – are far too generous and allow the wealthy to avoid paying tax.
Sounds like a strong endorsement for reforms to unwind these lurks. So, what are Australia’s politicians waiting for?
