In announcing the changes to Australia’s tax system today the Prime Minister Kevin Rudd and Treasurer Wayne Swan have made clear the policies that will not see the light of day while the Rudd Government remains in term.
Among the potential policies taken off the table were:
– The inclusion of the family home in means tests;
– The removal of the benefits of dividend imputation;
– The alignment of the superannuation preservation age with pension age;
– Reducing indexation of the age pension;
– The provision of a government annuity product; and
– A reduction of the CGT discount, the application of a discount to negative gearing deductions, and changes to grandfathering arrangements for CGT.
The Government reaffirmed it would not remove tax free superannuation payments for people over the age of 60. Rudd and Swan committed that the Government would not implement any of the above policies at any stage.
Other proposed measures taken off the table were the removal of the Medicare levy, the introduction of a bequests tax, and the abolition of the luxury car tax. The Government also reaffirmed it would not increase the rate or broaden the base of the GST.
Some of the proposed policies were recommendations made by the Australia’s Future Tax System review panel, while others were areas the Government believed may be open to misinterpretation.
The Government pointed to a number of other areas in which it saw potential for future reform, and were not addressed in this review. They included simplifying tax time for “everyday Australians”, improving incentives to save and improving the governance and transparency of the tax system.
