'Fairness is absolutely critical': Malcolm Turnbull says tax reform will be more than GST
Malcolm Turnbull: Tax reform must be fair
Fairness is critical to the success of any tax reform, says Prime Minister Malcolm Turnbull during his first keynote economic address in Melbourne. Courtesy ABC News 24.
Prime Minister Malcolm Turnbull says reforms to Australia’s tax system must be fair and broad and not focused on single issues such as the GST.
Mr Turnbull used an economic address in Melbourne to call for a system for Australians that “backs them in rather than holds them back”.
It comes as modelling by the National Centre for Social and Economic Modelling found that increasing the GST to 15 per cent would hit poor households the hardest and leave wealthier households relatively unscathed.
Broadening the GST base, but keeping the current rate of 10 per cent, would have a similar effect the research, commissioned by the Australian Council of Social Service, found.
But Mr Turnbull used his first major economic address on Thursday to warn against “picking off” one tax policy in isolation to others, pointing to the GST.
“The object of the taxation system is plainly to raise the revenue the government needs for its services it provides,” Mr Turnbull said.
“But it must do so in a manner that backs Australians to work, save and invest – that backs them in rather than holds them back.
“That is why picking of one of these proposals in isolation to others is always going to be misleading. I think you understand the point I am making there.”
The Prime Minister said any reform package the government proposed would have to raise the revenue it needed, while sharing the burden fairly across the community.
“Fairness is absolutely critical. Any package of reforms which is not and is not seen as fair will not and cannot achieve the public support without which it simply will not succeed,” Mr Turnbull said.
In a later interview with ABC radio in Melbourne, Mr Turnbull was asked to define what would be seen as fair when it came to tax reform.
“Fair is obviously in the eye of the beholder and people have different views on it,” he said.
“I think for Australians, fair means the burden of tax is borne by the best able to pay it. It’s a question of judgment.
“The test of whether any set of measures is fair is going to be whether people look at it and say, yep, that seems fair enough,” he said.
Presenter Jon Faine challenged Mr Turnbull by saying wealthier people have more options available to them to avoid paying tax.
But Mr Turnbull said the government was “constantly” plugging tax loopholes and “it is just wrong to say that tax is optional in Australia”.
“We have high levels of compliance,” he said.
He said while tax avoidance and evasion were always going to be present, “it is not a gigantic integrity problem here as it is in some other countries.”
