Don’t sign up to a shocking deal, ACOSS urges nation’s leaders

Friday 11 December 2015

ACOSS has rejected the effort at so-called tax ‘reform’ emerging from the Treasurer’s and Leaders meetings held over the past two days.

‘Of all the packages and reform proposals on the table over the past six months, this attempt at a deal has picked up their worst elements’, said ACOSS CEO Dr Cassandra Goldie, at a meeting with Directors of Councils of Social Service from across the country in Melbourne today.

Dr Goldie said, ‘The purpose of tax is to raise the revenue for social investment in the essential supports and services for people that enable a productive economy. The only way to reduce demand for services is to reduce inequality and increase access to jobs, yet the current proposals increase inequality and do nothing for growth.

‘Tax reform worthy of the name should pay for the essential services the community needs and expects, in a way that’s fair and causes the least harm to the economy.

‘The best test for reform of taxes and spending is not whether it serves the interests of governments but whether it serves the community.

‘The argument that growing costs in health, education and community services can either be curbed with a dose of “competition” or funded through higher economic growth is naïve at best, dangerous at worst. Public health care costs alone are rising over the long term in all wealthy countries and will rise further as the population ages. There are still serious gaps in essential services such as early childhood, affordable housing and dental and mental health, which hold back participation and productivity.

‘The “deal” on tax and federalism reform is far from done’, said Dr Goldie. ‘Federal, State and Territory governments have agreed to consider changes along these lines. Before this is taken any further, the public are entitled to know that the tax reform package will deliver the following:

  1. Guaranteed and sufficient revenue to ensure access to quality services, with tied grants remaining in place (tied grants provide at least some guarantee of access to services for people across Australia);
  2. An overall package that is not based on a regressive switch from income tax to consumption taxes including the GST (which shifts taxation from high income earners to low income earners without providing any guarantee that essential services will be available to those who need them); and
  3. Tax reform that effectively tackles continuing tax shelters including capital gains, negative gearing and superannuation, and enables States and Territories to shift from economically harmful taxes such as Stamp Duties towards more efficient tax bases such as broad-based Land and Payroll Taxes.’