Survey: What do you think about these critical policies?

Tax UBER and other foreign companies as they have destroyed the the retirement of GST &TAX paying Australians

Government has more of a spending problem than tax revenue problem!

For example: stop wasting our money on ineffective defence equipment (almost nothing to show for the spend e.g French subs), education (standards going dramatically backwards despite huge expenditure), massive public service size and wages bill and outsourcing to expensive consultancies, almost free childcare for couples on a point income of $530K, ......

I agree with all your points. The childcare subsidies for a couple earning $500k have really lost me. If a woman is earning $250k she is most likely to go back to work with or without the child subsidies as she hopes to maintain both the career and the good income. Many of my GFs and I were earning $250 prior to having children and everyone of us went back to work as soon as we could. Some of us were made redundant soon after in the name of productivity. Childcare subsidies don’t boost productivities for high income earners. Employers’ attitudes do.

There are many people especially people 50+ unemployed or underemployed. Why doesn’t the government tackle the real issues - the ageism and sexism? Save the subsidies for the low income earners.

The stage 3 tax cut should be cancelled. There is no logic that a person earning $45k paying the same tax as a person earning $200k, even if budget allows it.

No, don’t pay cost of living concessions to anybody and everybody. Just increase payments permanently to people who genuinely need them, such as those on disability pension, unemployment benefits and aged pensioner who don’t own a $million dollar house - these are not the people spending money on travel, renovation and causing inflation. By the way we are still travelling and renovating my house and don’t want any subsidies for the government. No thank you. We may start buying supermarket labels but we are more than capable of standing on our own feet and just need you politicians to do the same which brings my next point.

Why the politicians don’t cut their own salaries and benefits? Why do we pay politicians benefits after they leave their jobs? Don’t they get paid even more using the connections they have built during their political careers after they leave as trade commissioners, developer advocates or macbank consultants?

"childcare subsidies":

Are they subsidies or tax fertiliser?

https://theconversation.com/if-governments-were-really-concerned-about-tax-and-the-cost-of-living-they-would-cut-the-cost-of-childcare-182669

"It’s the cost of childcare, which, according to new calculations, imposes an effective tax as high as 70% on a second-earner wanting to work a fourth or fifth day a week."

Dudley, I have no problem with low income earners receiving subsidies. We need them to work and they need to feed their families. I don’t think the subsidies should be extent to a couple earning $500k. The $500k is more than sufficient financial incentive to keep them in workforce and they don’t need any subsidy.

"I don’t think the subsidies should be extent to a couple earning $500k":
Less harmful that having means test caps and tapers which introduce high marginal tax rates.

Less than 5% of all households have incomes > $500,000 / y :
https://www.abs.gov.au/statistics/economy/finance/household-income-and-wealth-australia/2019-20/1.%20Household%20income%20and%20income%20distribution%2C%20Australia.xlsx
What government can giveth, government can taketh in high marginal tax rates uncorrupted with anomalous tax rates caused by cutoffs and tapers.

"Are they subsidies or tax fertiliser?"

Where in the compact between government and parent is there a guarantee that the childcare support will be offset with sufficient taxable income (and tax paid,) or for that matter any additional income at all, to justify the expenditure of tax payer money? From my observation many government programs are great thought bubbles but very poorly executed, audited, costs are uncontained and are often egregiously rorted!

"justify the expenditure of tax payer money":

The hourly rate cap = $12.74: https://www.servicesaustralia.gov.au/type-child-care-you-use-can-affect-child-care-subsidy?context=41186#hourlyrate

$12.74 / h:
= 12.74 * 10 * 5 * 48
= $30,576 / y

To pay more tax, full time income would have to be $123,000 ( https://moneysmart.gov.au/income-tax/income-tax-calculator#!focus=1 )

> "It’s the cost of childcare, which, according to new calculations, imposes an effective tax as high as 70% on a second-earner wanting to work a fourth or fifth day a week."

this is the case for many means-tested payments where the more you earn the less subsidy you get. You end up working for next to nothing.

if you want to subsidise childcare you need to get rid of all means testing and "claw-backs". But a better way is to simply get rid of all subsidies and make childcare costs tax deductible as it is an expense of the second-earner working. (Or the primary/only earner in the case of single parent families).

"make childcare costs tax deductible":

In a progressive income tax system that results in smaller income earners paying proportionately more of their income in childcare - which is next to being tax regressive.

>"results in smaller income earners paying proportionately more of their income"

that applies to everything though. For example, if two people buy a Toyota Corolla and one earns much less, then the car is a much greater proportion of their income.

in the case of tax deductible childcare, if one person earned $70k and paid $50k in childcare then they would be taxed on the $20k difference. They would pay little if any tax. On the other hand if someone earned $250k and paid $50k childcare they would pay tax on $200k which would be a lot more. So it still seems progressive - in fact the lower income earner would get a greater deduction as a proportion of their income than the high earner.

anyway the aim is to not have any thresholds which discourage people from earning more and bettering their situation. Most of our welfare payments and subsidies lock people in poverty traps.

Perhaps instead of subsidising child care it could be made either tax deductible or, if one of the parents decide to be a stay at home mum or dad, let the income of the working parent be split between both parents for tax purposes. So if someone is earning enough to make tax deductible but unsubsidised childcare attractive they could make that choice. For others the income splitting option might be more attractive. It’s their choice. I’m not sure how the numbers would stack up in terms of cost to the revenue.

CW - read what you wrote.

After the stage 3 rates are implemented, a person on $45k will pay about $5k tax. A person on $200K, ie. earning about four and a half times the $45K person, will be paying about $50k tax ie. 10 times the tax the lower earner is paying. And you find this inequitable somehow?

David, “And you find this inequitable somehow?”
The stage 3 cuts will make it less equitable for sure. Using your logic, you are basically saying it is inequitable that a person earning $1 million is paying more tax than someone earning $200k, and that the whole progressive tax system inequitable?

Labor's position on not bringing forward child care subsidies is a cop-out. "earlier introduction cannot be sustained" "we account for the cost, but not for the benefit" Every budget makes assumptions about tax revenue. Why is this different? Also, regards "many speakers claimed the single most-important initiative to ease labour shortages and improve productivity would be to improve access to childcare and bring more women into the workforce", bringing more people into the workforce does not improve productivity (output per worker). This is an important distinction because improved productivity is the only way that sustainable real wage increases can be delivered.

Don't get tricked. There are always the proposal to reduce the income tax rates and increase the GST. But, it is only a way to get more tax out of the retirees. The retirees earned their income (at income tax rates higher than they are today) then saved their money, and are now living off that money - which they already paid income tax on. Today the proposal is to reduce the income tax rates and increase the GST. So the retirees will then have to pay GST on spending their money, when the money that they have accumulated (leaving aside the tax concessions of super). So effectively they are getting taxed twice. Unlike people that are still working, where an increase in the GST can be offset by a reduction in income tax

You can’t leave aside superannuation tax concessions. You can’t claim you paid higher tax when contributions tax is 15% and earnings tax is 15%. Your argument makes zero sense.

Cut stage 3, increase the GST (after inflation pressures ease), increase lower socio subsidies for the gst increase, tax the taxable component of pensions and cap TSB at twice the TBC to eliminate massive super balances.

If we want a traditional Australian egalitarian society and a fair go without the massive holes that the USA is now growing in their societal makeup we need to think of all members of our society, not just ourselves.

"Australian egalitarian society and a fair go:"

Age Pension for all age eligible and tax the living daylights out of those who have capital.

Then those who did not pay their fair share of tax, the habitually poor, get a fair share and those who paid many times their fair share of tax, the enterprising, also get a fair share.

The size of the fair share depending on the after tax profitability of the enterprising.

@Dudley

I am a top MTR tax payer and employ around 15-20 ppl. I personally would greatly benefit from stage 3.

I just don’t want the societal destruction currently occurring in the USA.

We’ll all be poorer if that happens.

Dudley, you appear to be a high income earners? If so, as a high income earner, you would typically have received benefits from subsidised private hospitals, subsidised private schools for your children, superannuation tax concessions, negative gearing, franking credits and tax concessions from family trust. I am not against you receiving some or all those benefits. But probably the biggest benefits for living in a harmonious and often egalitarian society are that you don’t have to worry about being kidnapped or shot for being rich (think South Africa), or stepping into human waste once you are out of your palace in your gated compound community (think India), or being robbed by the government (think China) - only a harmonious society where we look those in need can give your this safety and security.

"top MTR tax payer":
Nought MTR tax payer (retired). Some types of enterprise, such as the employing kind, are frowned on and punished with high tax rates whereas passive enterprises are reward with low tax rates. Negative MTRers are smiled upon by many including the Commonwealth.

"We’ll all be poorer if that happens.":
"harmonious society":
Heartily agree. If we wish to tolerate disability and indolence then we must compensatorily reward enterprise and capital formation.

"received benefits from subsidised private hospitals [no], subsidised private schools for your children [no], superannuation tax concessions [yes], negative gearing [no], franking credits [yes] and tax concessions from family trust [no]":
High MTRs pay for that.
Employee income tax credits paid by employer on gross income are similar to franking credits paid by company on shareholder gross dividends.

We will achieve nothing unless politicians put sound economic decisions before securing votes for the future. Water, economic and energy security have been damaged due to poor decisions taken in the interest of political popularity now ,versus long term projects to the benefit the country which may come to fruition after a politician’s career is over - giving them no sugar hit.

I read the comments above, and find most to be questionable, some objectionable. This is nothing more than a reflection of the diversity of views, often strongly held, present in any society, and mirrored in our Parliamentary representatives. Little wonder that necessary and long overdue changes to our overly complicated, contradictory and unfair tax and retirement regimes (super and the age pension) are politically impossible. So we are destined to trudge on in a mire of red tape, made worse by actions taken by individuals and businesses responding rationally to the unfair and illogical regulatory regime. This Government is no better equipped than its predecessors to address the issue, because they are more interested in preserving their hold in power at the next election in less than three years' time, than taking tough but necessary decisions in the clear long term best interest of the nation. And so we drift on in a spiral of regulatory self destruction.

Spot on Kym until a federal gov't is prepared to address tax reform without fearing upsetting some nothing will change. We are overall a wealthy country but the gap between those struggling to survive and the ultra wealthy continues to grow

Quote from The Australian to give some context to the question on a mining/resources tax: "US energy giant ExxonMobil has pushed back against calls from some for a super profits tax, saying its $740m in petroleum resource rent payments showed Australia already had a windfall tax in place for the nation’s oil and gas industry. It said it had paid corporate tax for the first time in nearly a decade after a period of high oil and gas prices this year inflated the industry’s balance sheets. Exxon’s Australian arm said it had paid $740m in petroleum resource rent tax for the year ending June 2022."

BHP last 10 years paid $90b to governments.

Australian taxes, royalty related income taxes, royalties and other payments to governments.

Australian adjusted effective tax rate 33.9% increasing to 42.7% once royalties are included.

Woodside H1 2022. Total tax, royalties and excise payments of US$1,476m equating to a statutory effective income tax rate of approximately 33% and an all in effective tax rate of approximately 47%.

"BHP last 10 years paid $90b to governments.":
How much has come out of BHP's franking credit account and how much tax was paid on BHP franking credits by BHP shareholders?
ie net tax on shareholders BHP dividends?

How much tax was paid on the economic activity resulting from BHPs enterprises?

Dudley.
I assume BHP shareholders would pay tax on their dividends at their marginal tax rate?

“How much tax was paid on the economic activity resulting from BHPs enterprises”. I’ve got no idea. It would be quite a lot I imagine.

Someone has taken a stab in the dark about it:
https://www.bhp.com/investors/annual-reporting/economic-contribution-report-2021
"BHP’s total direct economic contribution for FY2021 was US$40.9 billion."

Let's be careful when companies say they paid X amount of tax. A huge portion is the PAYE tax deducted from employees' pay and not actual company tax payments on income tax. And remember, 100% of employees' pay is tax deductible. They are simply collecting and passing on on collect taxes and received full tax deductions as a business expense. Any number of dirtball companies have this PR BS and in reality are sub 5% in real tax.

>"Let's be careful when companies say they paid X amount of tax. A huge portion is the PAYE tax deducted from employees' pay and not actual company tax payments on income tax."

witholding type taxes like PAYE and most company tax are still taxes raised by the government as a result of the corporate entity's activities.

the only company tax that is not a witholding type tax in the current year are tax deductions from foreign shareholders' dividends and retained earnings (ie. profits not distributed as dividends). The rest result in franking credits and are more-or-less the same as PAYE taxes from employees' wages - the individual pays the appropriate tax at their marginal rate.

this is all as it should be - I just wanted to point out it is still tax regardless of whether it is taken from payments to the employees (PAYE) or from the investors (company tax).

Plenty of ways the government could find more money ( without printing ) if it really wanted to; tax corporations with a unit fee( and eliminate transfer pricing), remove the diesel tax rebate, ( and the private health insurance rebate) end the capital gains tax discount. Remove the tax free status of religious institutions, tax superannuation account earnings in pension mode over a certain amount ( and remove tax on earnings when they go in). Limit imputation credits to people who pay tax. Limit negative gearing.

And be a one term government.

Messy bunch of issues here.
Stage3 Tax Cuts. Gee whizz if they don't happen now they never will! We really do need to flatten the tax rates. Plenty of trades earning well over $100K.

Yes I do favour a extra tax on super mining profits. We do have to cough up more money for the nation. What better than BHP etc. Yes my SMSF has BHP

All over the world people and business are under pricing pressure. We are getting it as well. My coffee is going up Yikes. LIFE WASN'T MEANT TO BE EASY. Now who said that?

Reserving Gas supplies for the east coast makes great sense. The WA state does it while the Ruskies are burning off unsold gas. Surely with all the gas we have we can reserve an adequate amount for East OZ.

Yes raise the GST to 15%. Didn't the Kiwis do it. They seem to be still alive. The Brits and most of Europe have much higher amounts than our paltry 10%.

Guess what we are going to have to cough up to rebuild Ukraine. The Russians will get away with paying nothing. The western world will no doubt have to pay most of it.

Many thanks for the 1,000+ comments already sent in from hundreds of responses. We will publish them in full next week (with no personal identification).

The expectation for high inflation has been entrenched, which feeds more price hikes, hence high inflation.

What plans are they looking at to increase the provision of Nurses, GPs, Teachers. Their stress loads are intolerable.

How to reduce red tape and government interference in every aspect of our lives. How to place a limit on the bloated public service, both federal and state, which has risen out of all proportion to the population increase.

Why is the GST out of bounds for discussion. As John Key said, rich people spend more than poor people so GST would be a fairer method of taxation. It is looked down on by elites as they have more to loose than the poor.

GST is a bad tax. Always was always will be. Before GST there was sales tax, very imperfect, but had one thing in its favour. It recognised that the luxuries of life (eg jewellery - taxed at 30%) should be taxed higher than the essentials of life (eg clothing and books - taxed at zero %). with GST, both are taxed at 10%. Fundamentally wrong, therefore the underlying premise of GST (flat tax on expenditure) makes it a bad tax. For GST to be a better tax, it needs to somehow recognise that luxuries has to be taxed at a higher rate than essentials

Fundamental flaw in your argument. The example. Not all jewellery is "luxury". Every married couple has wedding rings. It's not something for the rich. Nor is an engagement ring. So how would you propose to differentiate the rich woman's 10th gold ring from the working man's daughter's one ring?
Your supposed superiority of sales tax was actually part of its weakness in my view.
GST is a great tax because the wealthy pay it when the spend their high incomes, whether they paid income tax or avoided it.

GST is actually the most efficient tax (yes it can be measured). It also captures more black economy money.

Stamp duty and payroll taxes etc are the very worst, followed by income then gst is the most efficient. The hardest part is compensating the very bottom end when you raise it.

Accept the impending climate crisis, and plan accordingly: increase tax to cover the cost. Place greater emphasis on social outcomes when deciding policy - current system places most importance on financial implications; we need to create a better fairer society.

Why should the primary residence be excluded from aged pension calculations? All assets should be included including the primary residence. Why should rich non government schools be subsidised at all? Yes we all pay tax but I paid tax all my life and now I am not eligible for an aged pension so I don't receive one. Why don't you increase the Medicare surcharge? Too many are relying on it and do not have private insurance hence huge waiting lists and overworked staff.

Medicare has kept pace with inflation since it was COMMENCED and costs have sky rocketed for gp’s. That’s why you are now lucky to find a new bulk billing doctor. If you have one, never leave.

We should have an independent tax authority like the reserve bank to reform/ optimize the whole system without the dead -hand of party politics.

An easy way to reduce government spending is to change the assets test threshold for the age pension. It absolutely boggles the mind that the taxpayer is handing over a couple of thousand dollars a year to a couple who own their own home, have a cheap car and some contents, and nearly $900,000 in financial assets. Likewise that a couple with the same personal assets and $400,000 in financial assets are getting handed $41,000 a year to live off, plus whatever they get from their own savings. So probably close to $60,000 a year in total, likely all tax free for a couple who have a paid off home and likely no kids at home.

I would be happy seeing the assets test threshold reduced by a couple hundred thousand dollars at the low end, potentially even more at the high end.

The assets test should exclude the family home.

The assets test should be excluded from the Age Pension. Which would exclude the family home and everything else but not exclude the poor from Age Welfare.

Then no incentive to convert assessable asset to non-assessable assets and less incentive to convert taxable income to non-taxable income.

A mining super profits tax is moving the goal posts after the game has started. Very unfair to the shareholders who invested their money in good faith and waited patiently for a return on their risk capital. Will investors in failed mining companies receive compensation for their loss from the government?

Review the GST level We need to stop nitpicking around the edges and use this vehicle to offset the additional and increased costs of the services nominated along with addressing the mountain of debt we have incurred during the pandemic, I fear that this is wishful thinking as we don’t have the leadership with enough intestinal fortitude to follow this coarse

“cost-of-living relief that we have announced. That will be in areas like childcare, medicines, TAFE fees, the cost of electric vehicles”

Relief for cost of electric vehicles? Seriously? There’s part of the problem right there.

Considering that one of the major reasons for income tax is to redistribute money from the haves to the have nots, stage 3 makes no sense.

The best tax cut in my memory was when Gillard(?) raised the tax free threshold massively. Everybody benefits, but the strugglers benefit relatively the most. This should be the basis of all income tax cuts, IMO.

The tripling of the tax-free threshold has had unintended consequences. Examples:
1. enabling retirees to also pay no tax on substantial investment earnings outside super's TBC.
2. enabling many foreign backpackers to pay no Australian income tax.

Those are not necessarily bad things. The super issue is probably best addressed by changing the super rules. They are far too generous, IMO.

Taxes have to rise - lets do that in a clever way for specific terms to get debt down. Lets start jailing the corupt before its so pervasive we dont know where to find it - which so negatively impacts so many nations. Lets add sensible analysis (short and long term) to avoid (or reduce) the dislocations in our macro decisions - toll price formula's such as 4.5% or CPI whichever is the greatest is a disaster over 51 years and lack of (10 line) analysis the cause. When do we learn ? This 40 year mess of rising debt, privatisation of monopoly like assets is going to be very painful and difficult to unwind as interest rates rise due to structurally induced inflation - all the while as we ignore the growing plight of the poverty stricken globally - who need water security, food security, and are least able to counter the inflation we have collectively planned and worked to create (even though we dont want to admit it). debt is too high, we run huge deficits - its not possible for that to continue.

The necessary decisions to regain control of the budget are politically difficult. Making changes a holistic review of industry and immigration policy, simplifying the tax act and hopefully eliminating a few taxes altogether, making a concerted effort to reduce red tape and change the debate from politicians making the passing of more legislation a badge of honour, we should look to reduce interference and above all, the hand outs to business and all others except the very needy. Welfare must be overhauled so that we help people up, as it stands now, the loss of benefits for every dollar earned acts as a huge disincentive, the 'loss' is higher than the top tax rate, having a negative tax applied would be the fairest and simplest form of welfare.