In a big boon to Bill Shorten’s credibility, the independent Budget Balance Commission has urged a series of Budget reforms that it claims could return the Budget to surplus within three years that bear a striking resemblance to several proposals from Labor. From The Age:
The 12-member commission included current Reserve Bank board member Dr John Edwards and three former secretaries of the federal department of Prime Minister and Cabinet, Dr Michael Keating, Dr Ian Watt and Terry Moran.
Their report challenges the notion the budget can be brought to balance through spending cuts alone. It calls for $15 billion in revenue “enhancement” measures and $2 billion in spending cuts to bring the budget to surplus in 2018-19…
It presents five options for closing the fiscal gap “as fast as possible” that the commission believes has broad political and community support.
The biggest potential annual savings identified are in the areas of superannuation tax and capital gains tax. They include introducing a flat 15 per cent discount on super contributions ($6.9 billion), reducing the cap for concessionary contributions to super to $10,000 ($8.5 billion), halving the capital gains discount ($3.6 billion) and abolishing negative gearing on all assets purchased after December last year ($2.6 billion).
Other options proposed include increasing petrol taxes, cutting the fuel tax credit scheme, cutting industry tax concessions, clamping down on work related tax deductions and extending the “temporary” budget repair levy.
Notice how reforms to superannuation, the CGT discount, and negative gearing are front-and-centre of any Budget repair? It will be interesting watching Messrs Turnbull and Morrison try to spin their way out of this one.
