Income tax has become the silent tax for many Australians, particularly young Australians, according to Federal Treasurer, Scott Morrison.
In a seminal speech delivered to a conference in Melbourne today, the Treasurer put tax reform squarely on the table including the lifting of the goods and service tax (GST), and the structure of tax concessions granted to superannuation.
However, front and centre in Morrison’s address was the drag to the economy being created by the current personal tax regime.
He said that around 300,000 Australians were expected to move into the second highest tax bracket over the next two years and that if there were no tax cuts for 10 years, nearly half of all taxpayers would be in the top two tax brackets — an increase from around 27 per cent today to 43 per cent in 10 years.
“This means that next year the average wage earner will be taxed up to 37 cents in the dollar on what they earn, but on less than half of every dollar they spend, they will pay only 10 cents in tax through the GST,” the Treasurer said.
“To achieve a better a tax system, Australia needs to carefully consider the impact of income tax, especially personal income tax, on economic growth, and living standards,” Morrison said.
He said these were not the only items on the table for discussion and cited other areas such as “generous superannuation concessions”.
Morrison also pointed a finger at the states saying that state taxes and charges could not be quarantined from the tax debate.
