Notes from Tax Policy Meeting 30 May 2023
Tammy Wolffs (ACOSS), Dan Mars (Mackillop Family Services), Tariro Mutongwizo (QCOSS), Emma O’Neill (Good Shepherd), Stephen Durney (TasCOSS), Greg Ogle (SACOSS), Avan Daruwalla (ACTCOSS), Emily Porter (BSL), Brooke McKail (Anglicare), Caitlin Perry (NTCOSS), David Tran (Oxfam), Josie Lee (Oxfam).
- Create an Evaluation Unit within Treasury to examine policies and programs across government. ($10M over 4 years).
- The tax rate applied to future earnings of superannuation balances above $3m will be 30% from 1 July 2026 ($3.2B in 2025-26, increasing to $6.25B in 2026-27).
- Superannuation to be paid on employee’s payday rather than quarterly from 1 July 2026 (Increase receipts by $835M and decrease payments by $285M in 2026).
- Increase to tobacco taxes as a welcome source of revenue (but must be supports for people affected on the lowest incomes) ($3.3B over 5 years).
- Multinational tax reform implementing a global minimum tax and domestic minimum tax based on OECD Global Anti-Base Erosion Model Rules ($370M increase in receipts; $111M increase in payments over 5 years).
- Reform of the Petroleum Resource Rent Tax for oil and gas producers will raise an additional $600 million a year, but this is only a fraction of what could be raised. The Government should go further and apply a 10% royalty to raise an additional $8 billion a year ($2.4B over 4 years).
This budget has missed the opportunity to:
- Cancel the scheduled stage three tax cuts set to cost $20 billion a year.
- Raise revenue and incentivise healthy behaviour change by increasing taxes on sugary drinks and wine.
- Align tax policy with climate goals by not phasing out the $9.4B a year fuel tax credit, or fossil fuel subsidies.
Advocacy/campaigning on Stage 3 tax cuts
- Opportunity right up until the 2024 Budget.
- Continued advocacy across sectors and organisations
- Seek to reshape the cuts to make tax brackets more progressive.
- Opportunity to deal with bracket creep for middle income earners, while reducing benefit to high income earners.
- Alternative may be for Labor to take broader tax reform to the next election.
- Would likely include greater use of indirect tax, such as increasing and broadening GST, other taxes, like a road user tax, working with states to move from stamp duty to land tax.
- Could include some reform of property taxes. Might not want to touch negative gearing, but could go with CGT.
- Brooke advised Anglicare hasn’t decided whether to campaign solidly from now until the next Budget or to have a short, sharp push next year. Anglicare good engagement on its regional of effects of the Stage 3 cuts, by taking electorate results directly to affected ALP backbenchers.
- Caitlin Perry NCOSS suggested considering advocating for reshaping, rather than withdrawing Stage 3 tax cuts, and how the sector might engage on inevitable broader push for rebalance between direct and indirect taxes.
- Josie leading Taxfare work, as Oxfam steps back into the tax space. She noted that this government is incremental in its approach, and may be timid following a decade of tax policies that it could not progress.
- Emily BSL want to get more involved in tax issues part of community tax project, still developing position. Important to keep opposing Stage 3, while having an open conversation about options to increase tax.
- Emma Good Shepherd, primarily interested in gendered dimensions and how women lose out. Want to tell stories about services for women that get cut when revenue is reduced. Also interested in tying Stage 3 cuts to climate change advocacy – emissions reduction, adaptive work. For example, a gender analysis of the Budget showed very high super balances held by older men are product of investment in fossil fuels; the store of wealth is a product of the fossil fuel era. How can that store of income from fossil fuels get taxed? https://nfaw.org/policy-papers/gender-lens-on-the-budget/gender-lens-on-the-may-2023-budget/#GLMay23-revenue
- Brooke referred to the national aged care strategy around disability and early childhood https://www.pmc.gov.au/resources/draft-national-strategy-care-and-support-economy. Believes the Government is likely to use its political capital to unlock value of family home – pushing more of the cost on users https://www.agedcareessentials.com.au/news/another-push-to-increase-aged-care-consumer-contributions-heres-why-it-really-could-happen
- ACOSS to convene a workshop with members to discuss strategies and priorities for campaigning on Stage 3 tax cuts, including:
- Considering the organisations and sectors that want the tax cuts withdrawn and that want reform
- how the sector work together to in the next 12 months
- how the sector campaign coordinates/complements responses with other sectors/voices
- considering other measures for raising revenue.
- The ACOSS submission was circulated. Briefly, the main points were that:
- Super is one pillar of the retirements system, together with the Age Pension and other savings, and should always be considered and dealt with in that context
- super should not be used as a wealth accumulation tool and/or for estate planning, but provide for an agreed standard of living, with reference to community standards
- there should be a national conversation about the purpose of super, with a view to further reform.
Early access to super
- Some concern that there may be a move to stop people accessing their super early.
- There are some situations where people are being exploited and persuaded to use super savings for surgery, so there may be room for some changes to requirements.
- Mostly, though, people who access their super early do not have enough super for it to improve their standard of living in retirement, and have a genuine and immediate need.
Productivity Commission Inquiry into philanthropy
ACOSS hopes to finalise the submission this week. Philanthropy cuts across both tax and social services, so Jacqui, Rob and Tammy have been working together and with members, particularly on settling a position on DGR status. Everyone agrees the DGR process must be faster and simpler, and that qualification must be clearer and more consistent.
Members’ community engagement to build support for tax reform
Josie suggested building more fundamental conversation about having a strong tax base in the community. Asked if organisations are engaging with their communities, as well as with governments.
Brooke advised members in aged care are doing it a little. Recent research shows that significant proportion of people are prepared to lose some of their inheritance to tax (see attached).
Emily wants to do some future work to encourage seeing the tax and transfer system as a whole.
Greg advised SACOSS had tried a public campaign on tax prior to a state election campaign but didn’t get traction. Mobilisation has to be well resourced.
Emma suggested there may be broader lessons from recent tax reforms by the Victorian Government https://www.premier.vic.gov.au/stamp-duty-reform-boost-business-industry-and-jobs