Limit government to what we need it for, and we will all save thousands of dollars in tax.
If the government only got involved in the provision of services that the private sector is not well suited to provide, like national defence, criminal justice and the regulation of air quality, government spending would be no more than half of current levels. I have obtained costings from the Parliamentary Budget Office confirming this, which are available on their website.
If government spending was halved, this would allow taxes to be almost halved as well, leaving a modest surplus to pay down the Government’s appalling debt.
I recently introduced a bill to show just what a near halving of the Commonwealth tax take would involve, and how it could be done.
First, we should reduce income tax to a flat rate of 20 per cent while lifting the tax-free threshold to $40,000. This would save a typical worker on around $55,000 more than $6,000 a year and reduce the tax system’s disincentive for income-earning.
Those earning $200,000 would still pay $32,000 in tax, compared to a current tax bill of more than $67,000.
We should reduce the company tax rate to 20 per cent. This would help secure ongoing foreign investment that is so important for employment and wage growth. The alignment of personal and company tax rates would also simplify the tax system, which would reduce the need for so many tax agents, lawyers and bureaucrats.
We should abolish fuel tax. This would deliver motorists dollar-a-litre fuel for the first time in decades. And we should abolish the luxury car tax, which protects a car industry that no longer exists.
We should abolish alcohol tax. This would save around 75 cents on a can or pot of beer, and around $25 on a bottle of spirits. Low levels of alcohol consumption are not harmful, while the harms that arise from higher levels of consumption primarily fall on the drinker. It is not the role of government to prevent us from harming ourselves; at most, alcohol policy should focus on public education, discouragement of under-age drinking and the rigorous enforcement of regulations that prevent and punish anti-social behaviour.
We should abolish tobacco tax too. This would save around $20 from a pack of cigarettes, boosting the budgets of some of the poorest and most disadvantaged Australians who are also being denied proven quitting options like nicotine e-cigarettes.
Many smokers already save the budget billions by dying early after a relatively short period of morbidity, while elderly non-smokers spend decades on the age pension, in subsidised aged care and in the public health system. It’s quite unfair that we ask smokers to boost the budget twice by also paying among the highest tobacco taxes in the world.
We should abolish import tariffs. Australia continues to have an ad hoc array of import tariffs, on foodstuffs such as margarine, dairy spreads, pasta, bulgur, almonds, strawberries, maple syrup, biscuits and ham, and on a flotsam of items such as umbrellas, guitars, drums, calendars, towels, granite, sandstone, steel and cars. These hidden tariffs amount to big brother fiddling with our decisions on what to buy, for no reason whatsoever.
Discuss in our Forums
See what other readers are saying about this article!
Click here to read & post comments.
8 posts so far.