richest federal MP – the Member for Harbour Views – is having his 48.5%
of a quid’s worth in the tax debate. Malcolm Turnbull has already done
some wondering out loud on tax reform on his blog. Now, he’s reiterated his commitment to lower rates of personal income tax in Australia in a story in today’s Sydney Morning Herald and headed “Tax the rich and give to the poor – Turnbull does a Robin Hood.” See here.
says on his site that “in order to achieve lower rates we needed to
broaden the tax base so that more income [is] available to be taxed.
This objective of a broad base and a low rate [is] the most equitable
for all Australians and a fundamental element in a well designed and
equitable tax system.” Turnbull tells the Herald today: “You
hear some people wandering around saying you should have a tax cut at
the top and fund it by cutting social welfare. This is a ridiculous
sort of proposition… Just as there are excessively high marginal tax
rates at the low end, so at the high end there are, in some cases,
excessively low marginal tax rates.”
“However, to gain moral authority for a crackdown, the Government would first need to reduce tax rates,” the Herald
has him saying. “The lower the tax rates are, the less incentive there
is for avoidance and I think the greater moral authority governments
have to say, ‘Hang on, you’re not being over-taxed here, so pay up.’”
His comments are “an apparent dismissal of the Coalition’s ‘ginger
group’ of backbenchers, whose tax and welfare-cutting ideas were
prominent earlier in the year,” according to the Herald. The
group will be addressed tonight by Peter Hendy, chief executive of the
Australian Chamber of Commerce and Industry. Glenn Milne has more on
this in today’s Australian.
deserves a tick for using his profile, his experience – and very broad
contacts across the top end of town – to push issues as an MP. These
have ranged from tax reform to parish-pump matters like public
transport issues in his seat of Wentworth. He seems coy, however, on
the easiest way to deliver tax cuts – raising the tax threshold. “It is
generally (although not universally) accepted that, by international
standards, Australia’s income tax system has a top marginal rate which
is too high and a threshold for that marginal rate which is too low,”
his media release says.
Democrat tax spokesman Andrew Murray has
said his party is ready to move on this issue. “It is good to see the
Coalition backbenchers at last joining the campaign for a higher
tax-free threshold and indexed tax rates,” he told Crikey earlier this
year. “Tinkering at the edges won’t do. Like the Coalition/Democrats’
GST, what is needed on income tax reform is structural change.
Certainty and equity would be delivered by a three-part plan phased in
over a few years, in this order: a $20 000 tax-free threshold;
indexation to end bracket creep; a $120 000 top rate threshold.”
the right proposals on the table and presumably they could pass the
Senate – today, tomorrow, whenever. The problem is that raising the
threshold is very expensive.
Murray has said his proposal could
cost $18 billion Who’s going to bite the bullet and square this circle?
Who’s going to come up with a workable solution? Merchant banker
Malcolm seems eminently qualified. Mr Turnbull, over to you.