Bruce Barbour - February 2020 and later updates.
In this section I will talk about reforms that would be
beneficial to Australia going forward. The reforms
suggested are to the taxation other financial and the
other societal reforms to the political and economic
systems of Australia.
Taxation reform has always been problematic in Australia.
The reason for this is quite straight forward: the word
"tax" is poisonous to the general disinterested populous,
except if it has the word "lower" or "abolish" associated
with it. The general opinion seems to be - if it is a tax it
must be bad. And it does not matter whether the person him
or her self or most of the people they know will not be
affected by the tax. In their mind - is tax = is bad.
Because of this it is so easy for either side of politics to
"weaponise" the arguments against any proposal to increase
taxes or to introduce a new tax or to do significant tax
reform that involves the introduction of new taxes. It also
seems that it does not matter to the politicians whether the
proposal is good, in the nation's best interest or even
whether they secretly agree with the tax proposal. They are
most likely to take the political approach, and use it as a
cheap shot weapon against their opponents.
From my observation the only way tax reform can be achieved
is that any new tax introduced must be offset by other tax
decreases or abolition probably worth two or three times as
much as the new tax collects. Consequently opportunities
only arise for tax reform after government tax receipts have
increased substantially due to either a sustained period of
"bracket creep", increased income from resources based taxes
or from company tax in boom periods. These opportunities
must not be wasted as they have been in the past, where
governments have either decreased tax rates without reform
or spent the windfall on services and projects, worthwhile
Why is tax and other financial reform necessary? If we stop
giving tax subsidies and pensions to those that don't need
them then the extra income derived will provide the
opportunity to improve services and government social
security payments (especially the unemployment benefit which
is well below the poverty line) in Australia. And
after this is achieved the savings can be used to lessen
other taxes such as the abolition of payroll tax by State
governments (which was meant to go with the introduction of
It should be recognised that introducing a new tax, or
plugging a hole rorted by tax minimisation schemes, does not
necessarily mean a greater overall take overall (except as
indicated in the prior paragraph). Government needs a
certain amount of money to run government and to provide
infrastructure and services. That money largely comes from
taxes but the parts of the economy taxed to derive that
income can vary as decided by Government. Given that
Government does need this money then it might as well use
its powers of setting and collecting taxes to encourage
beneficial behaviour and discourage damaging behaviour, as
well as just collect money. The carbon tax was (and will be
in the future) a prime example of this. When used in this
way the community gets a dual benefit from the tax system
rather than single purpose taxes (such as income tax) which
are just to collect money to run Government. For example,
the millions collected from a proposed packaging
tax may encourage a decrease in the amount of
packaging used and as well go to lower other taxes, not to
necessarily just to increase the total Government tax take.
Economic rationalists hate the use of taxes in this manner,
arguing that they distort the free market. And yes they do -
that is the whole point. The free market is not the king,
the people are the king.
It is with the knowledge of the difficulties of tax reform,
but also the benefits, that I will suggest a number of tax
and associated reforms for consideration on the pages
associated with this section. In most cases I provide just
the kernel of the idea. While I could flesh them out, that
would take many pages on each idea. This site is not the
place for that.
Related to taxation reform is a group of financial reforms
to systems that offer benefits and concessions to Australia.
These benefits and concessions are offered to try to achieve
a desired outcome for the Australian people. And I have no
qualms with that aim however they must be fair and in line
with Australia's progressive tax system and not needlessly
give benefits to those that do not need them.
Suggestions for general voting reforms and also reform of
the Senate to make it more democratically representative and
to work better as a house of review. Also a "message from
the future" containing a suggestion on how society may work
in 2050 in the face of climate change and other challenges.
The topics I cover are listed in
the side bar. Or else click on the Next Page link
below to step through each topic in turn.
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