Community Sector Outlines National Tax Forum Wishlist
4 October 2011 at 2:29 pm
The Australian Not for Profit sector is calling on participants at the National Tax Forum to work together on finding solutions to housing affordability, ageing population, workforce participation and poverty, instead of being caught up in the same old debates.
Australian Council of Social Services CEO, Dr Cassandra Goldie says proposals to increase the GST or flatten the income tax scale will divide the community and are unlikely to succeed, and the Forum should instead use the 2010 Henry Report as a starting point for tax reform.
ACOSS has urged participant at the forum to avoid old debates and 'fruitless' arguments over whether to tax consumption or income, and to focus instead on practical solutions to Australia’s major social challenges.
Dr Goldie says there is a broad agreement among business, unions, community organisations and experts that the tax system should be reformed to tackle the costs of an ageing population, high housing prices, low productivity, and the challenges of workforce participation and poverty.
The Federal Government has said in the lead up to the forum that participants will be free to raise any and all issues related to tax reform, however Dr Goldie says there is little point in a stoush over raising the GST or flattening the tax scales.
She says increasing the GST would indiscriminately cut the living standards of pensioners, unemployed people and low paid workers and relying on the GST to pay for the services needed by an ageing population would undermine the fairness of the tax system.
Superannuation Tax Breaks
Goldie says a fairer way to pay for future health and aged care services is to remove income tax loopholes for people on higher incomes such as aged based tax breaks and the churning of wages through superannuation accounts.
Lin Hatfield Dodds, National Director of social service provider UnitingCare Australia, says the benefits of superannuation tax concessions benefit people on higher incomes, encouraging them to save for their retirements.
She says the wealthiest Australians, the top five per cent of income earners, are the beneficiaries of almost $10 billion worth of those concessions – while people on very low incomes receive no incentives to help them save for their retirement.
ACOSS are also joining the call for changes to the tax system to make housing more affordable.
Housing consumer advocacy group National Shelter says tax breaks in the current system work against Australians that need affordable housing.
Adrian Pisarski, National Shelter Chairperson and tax forum attendee, says the 30 billion dollars claimed by investors represents a structural problem which could be addressed at the tax forum in Canberra .
Pisarski says despite the massive tax breaks the market fails to produce sufficient affordable rental.
He says if tax payers are to subsidise investment in residential property Australians should expect a public return in the form of affordable rental housing, not wealth creation.
Despite receiving $24 billion in rental income – investors claimed a massive $30 billion in losses, leaving a $6 billion tax windfall for investors.
National Shelter says the Henry review made sensible recommendations about deductibility and the treatment capital gains and the Forum should expect a timetable for those reforms to be established next week.
Not for Profit Tax Reform
Community organisations are also calling for reforms to the complex tax laws that apply to the Not for Profit sector.
Lin Hatfield Dodds says UnitingCare Australia will campaign at the Forum for solid reform of the complex and outdated tax arrangements in place for the Not for Profit social services that support vulnerable Australians.
She says the current Fringe Benefits Tax concession cap – implemented in 2001 to help the cash strapped Not for Profit sector attract and retain staff – hasn't been indexed since its introduction and the value of it has been eroded over time.
Dr Cassandra Goldie says the forum needs to pay close attention to the Henry review.
She says Henry makes clear practical proposals in all of these areas and this is the opportunity for Australia to progress tax and transfer reform in line with community demands, whilst at the same time mapping out the clear path of longer-term reforms the nation must take.
The Federal Government's National Tax Forum is on in Canberra, 4-5 October, 2011.
View the ACOSS Submission Paper: A fairer, more efficient tax and social security system