Armchair Left begs Turnbull to locate brain

From Fairfax:

Fifty prominent Australians have written an open letter to Prime Minister Malcolm Turnbull declaring “Australia doesn’t need lower taxes” and calling for the federal government to place fairness at the heart of the 2016 federal budget.

The letter is signed by former Reserve Bank governor Bernie Fraser, ACTU president Ged Kearney, former Labor premier Carmen Lawrence, Uniting Church president Stuart McMillan, Nobel prize winner Peter Doherty and a raft of economists and legal and public policy experts. It was published as a full page advertisement in Fairfax newspapers.

It comes as Mr Turnbull prepares to announce the government will push to abolish the Road Safety Remuneration Tribunal, an attempt to reset the political agenda after days of pressure within the Coalition over whether to back a banking royal commission.

The letter asks Mr Turnbull “not to cut taxes at this time – and certainly not for companies”.

“A debate about tax reform should begin with the question of how much tax is required to fund the services we need to build a fair and decent society in Australia,” the letter states.

“Real tax reform also requires fairness. A serious tax reform package designed to be ‘fair’ should address as a priority the current generous tax concessions to the top end of town, inequitable distribution of superannuation tax concessions and the capital gains tax discount, not how to give big businesses large company tax cuts at the expense of services that everyday Australians rely on.”

Mostly true, though I would have thought that any discussion about tax reform should also begin with “how much tax can we afford to raise to build a fair and decent society in Australia”. Nobody is getting richer without greater efficiency and productivity.

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  1. You might begin with questions of tax effectiveness and fairness, but you must also end with questions of efficiency and productivity. And the mediocre efficiency of our tax system is rooted in the broken Federal versus State system of collection, decision-making (read: buck-passing), and allocation, and in the vested interests of those careerists who occupy the positions of privilege within

  2. darklydrawlMEMBER

    I mean, this is great, but why, oh why, do so many of these people seem to find their sense of integrity and fairness (and a brain, period!) AFTER they leave office? How I wish we could get some of these people acting with good intent when actually in power. Too many freaks in office drink their own kool-aid I suspect. Sacking the ‘media advisor’ would also be a good step too.

    • The cynic in me suggests it’s not a matter so much of finding integrity, but more what being in their self interest then not being the same as what is in their self interest now.

    • Vote independent is the answer to all our problems.

      They’re not married to an ideology.

    • Jumping jack flash

      the lobby groups stop pounding on your office door after you leave the office. It must be hard to think clearly when vested interests are all shouting their various agendas at you and promising you cushy post-office positions if you do their biddings.

      Probably why old Mal always looks a bit spooked lately.

  3. All makes sense, particularly the bit about super, wealthy tax concessions, CGT etc – but where’s the bit about reducing govt debt and the unsustainable spending that creates it? Sooner or later, money will have to be directed away from the provision of services or otherwise a new and incremental revenue source accessed, or an existing revenue leakage plugged (super/CGT) to pay down the debt. It concerns me that everyone wants a gold gilded welfare and health system – I’d suggest we could all make do with a bronze plated one which would still satisfy a concept of fairness. And, lastly, does anyone realistically think a govt without control of both houses could get even a fair package through the senate – there’d need to be some adults in the house for that to happen.

    • Sooner or later, money will have to be directed away from the provision of services
      I would argue that most of the money is directed toward useless wastes of office space. The people actually delivering services to the public get a tiny fraction of the money.

    • Today's Empire Tomorrow's Ashes

      It concerns me that everyone wants a gold gilded welfare and health system – I’d suggest we could all make do with a bronze plated one which would still satisfy a concept of fairnes

      What, like the US?

      there is plenty of revenue leakage elsewhere

  4. Honestly, who’s going to take this seriously when it’s signed by a former Labor premier and an ACTU stooge? Hardly a damning indictment from the sensible centre. Well done Carmen Lawrence and Ged Kearney….you just nullified everybody else’s contribution so you could get your names up in lights. Surely someone involved in this made the point that their involvement makes it easy for Turnbull and the Libs to dismiss this as a partisan stunt? Evidently not. So yet again, I can only conclude….this country is a joke.

  5. Since we are one of the lowest taxed OECD nations I think we can afford to raise taxes – A LOT. Oh, and since we are also one of the highest productivity countries outside wages – especially hours worked and relative productivity, it is not simply a matter chanting ad nauseum the age old neoclassical mantra of productivity.

    Quite simple – its taxation – END OF STORY.


    • If we are using the OECD figures then presumably we need an increase in GST as our consumption tax is below the OECD average while our direct taxes (individual and corporate) are a tiny bit above the OECD average.

  6. Interesting that in the list of problems with the tax system, there is no mention of negative gearing.

    And that’s with the likes of the Tax Justice Network signing it.

    Maybe some perspective is starting to come back into the debate.

    • It is not meant to be exhaustive and in any case It does state ‘the current generous tax concessions to the top end of town’. Also CGT does get mentioned which works in tandem with NG (and is in my view the driver of the misallocation).

      • Agree on CGT but it must have been a specific decision not to mention NG separately as this has been the tax buzzword for the last few months.

      • It’s pretty simple, the fact it is a hot topic is reason enough to avoid it – it is a divisive issue and their goal is to get people on side. Politics 101: Never be specific.

  7. For an ‘open letter’ I am struggling to find a full copy of it (rather than just media excerpts), anyone got a link?

    “big businesses large company tax cuts”

    As a recent self funded company startup, I’d appreciate any tax cuts to help us get on our feet. For all this talk of supporting entrepreneurship I found little in the way of grants or tax breaks that were able to help us out when we started (though by the sounds of it there are some coming next FY).

    “A debate about tax reform should begin with the question of how much tax is required to fund the services we need to build a fair and decent society in Australia,”

    Extremely loaded statement given that many will have different ideas about what ‘fair’ means.

    • Thanks Jason.

      “Collecting more tax, more equitably, will make Australia a better place to live and work.”

      I’d be happy to see more equitable collection of tax. For example like many here I don’t like that incomes are (in many cases) taxed at a higher rate than capital growth given the CGT discount.

      But more tax? What is the justification?

      • “But more tax? What is the justification?”

        The fact that we have an ongoing budget deficit and cutting spending is very unpopular?

  8. Me on my favourite topic.
    As I have said many times let’s just abolish the existing tax structure and start again. No income tax, no corporate tax, no fringe benefit tax, no exemptions of any sort, no stamp duty, no payroll tax, no GST. Nothing. Then put a financial transaction tax on all deposits, double the rate if the money is sent overseas – the rebuttable presumption being that it is done to avoid taxation. Then everybody, individual and company, would be contributing to the running of the country they either live in or in which a business is active. If a country elected a Government that put its people first then it would also have a progressive inequality tax on incomes over X times the average wage with an inflation adjustment for tax bracket creep. It could then work out a policy how to better the country as a whole with all that tax money. And it would be a lot, and so easily administered because it would be collected by the Banks on behalf of the Government. But if the elected Government wasn’t interested in the welfare of its people then the Country would not have an inequality tax. Everything would be so very transparent.
    Surely anything is better than the nonsense we have now throughout the western world.