Australian Treasury Secretary, Martin Parkinson, has given an interesting speech to the Business Council of Australia (BCA), which once again highlighted that Australia’s existing tax structure is becoming increasingly narrow and unsustainable, and how personal income taxes will rise dramatically via bracket creep as the once-in-a-century commodity price and mining investment booms unwind and national income growth slows. This, according to Parko, requires broad-based tax reform in order to boost productivity, including shifting the tax base away from productive effort (i.e. wages and corporations):
Genuine tax reform… requires more than an across the board cut in tax rates – it is about improving the structure of the tax system to reduce the cost that raising revenue imposes on the economy. In other words, it is as much about how much revenue is raised, as how it is raised.
