Abbott to use White Paper for regressive tax 'reform'

Negative Gearing, for instance, benefits upper middle class investors; but does not create much in the way of new employment. And important social programs demand higher levels of social expenditure.

Crucial priority areas which need substantial public funding include:

• Full implementation of the National Disability Insurance Scheme as well as 'lifting up' the standards and resource base for state schools; Extend the NDIS to apply to aged disability pensioners
• A big public investment in a National Aged Care Insurance Scheme: to provide for the needs of aged Australians both at home and in care
• Investment in a comprehensive Medicare Dental Scheme
• Implement Programs to 'Close the Gap' on both Indigenous Life Expectancy and Life Expectancy for the Mentally Ill
• A big investment in new Public Housing stock – solving the housing affordability crisis by increasing supply
• Fair Welfare and amelioration of Poverty – Raise all welfare payments by at least $35 a week on top of the current indexing arrangements; Thereafter implement fairer indexing arrangements for Newstart, Sole Parents and Student Allowance; Relax criteria and significantly slow the withdrawal of payments for disability pensioners attempting to re-enter the work-force; Eliminate welfare poverty traps
• Restructure the Higher Education Contribution Scheme (HECS); raise the repayment threshold and lower interest on debt; suspend all debt for former students who acquire a disability which interferes with or prevents work
• Public investment in public infrastructure – Including the National Broadband Network – with Fibre to the Home Broadband

At a crude estimate these items would likely cost over $50 billion a year to implement.

Options to fund include Company and Income Tax reform, and withdrawal of Dividend Imputation; but also the following

• withdrawal of Superannuation Concessions for the wealthy and the upper middle class*
• cut Negative Gearing and plough the proceeds into Public Housing;
• implement an Inheritance Tax;
• Restore the original (Rudd-inspired) Mining Tax
• Increase and progressively restructure the Medicare Levy
• Implement a banking sector tax on super profits
• Implement progressively-structured infrastructure levies on business and individual taxpayers– to provide for communications, transport, energy-related and water and sanitation related infrastructure – without regressive user pays mechanisms or inefficient/wasteful private finance
• Implement a progressively structured Aged Care Levy

The Treasury 'white paper' on taxation seems to largely comprise a 'wish list' for Liberals pursuing an ideological ideal of small government, low taxes, and high levels of inequality. (which the Liberal ideologues put down to 'merit') Labor and the Greens need to develop their own responses. And hopefully this post will contribute meaningfully to that process.

*It should be noted, however, that even $1 million in accrued superannuation will provide a relatively modest retirement income of $33,000 a year. (compared with a Single Aged Pensionof just over $22,000 and in the case of a couple roughly $17,000 each) This is far from grandiose – though assuming the recipients' home is owned it provides relative comfort compared with those fully dependent on the Aged Pension. (more than $10,000/year additional income) But The Australia Institutehas suggested that cuts in Superannuation Concessions - which cost taxpayers tens of billions annually – could instead be channelled into a more robust Aged Pension – lifting the full Single Rate to just over $26,000/year, and just under $40,000/year for couples. The rate at which the Aged Pension is withdrawn could also be slowed, benefitting those with smaller superannuation accounts – and especially women – as a consequence of interrupted working lives and the devaluing of 'feminised' professions.