Economic reform top priority for business leaders

Treasurer Joe Hockey warns that Australia’s taxation system is hindering economic growth while business leaders call for a better tax mix in the lead-up to the National Reform Summit.

“My view is that our tax system is holding us back from reaching our end goal of a stronger economy,” the Treasurer told the Tax Institute and Chartered Accountants of Australia and New Zealand in Sydney on Monday.

Without personal income tax cuts, inflation and rising wages will push around 300,000 Australians into the second highest tax bracket in the next two years, Hockey warned.

Hockey’s speech suggests personal income tax cuts will be central to the Abbott Government’s re-election strategy, and comes just days after state and territory treasurers met with the Federal Treasurer to discuss national tax reform.

NSW, backed by South Australia, has proposed an increase in the GST from 10 per cent to 15 per cent, while Victoria and Queensland are pushing to up the Medicare levy from two per cent to as much as five per cent.

Property Council chief executive Ken Morrison has called the reluctance of treasurers to consider changes to stamp duty “disappointing but not surprising”.

In an opinion piece for the Daily Telegraph on Monday, Morrison said last Friday’s meeting of federal, state and territory treasurers was “a wasted opportunity to address another fundamental national economic problem – housing affordability”.

Pointing to the 749 per cent increase in stamp duty costs over the last two decades, Morrison argued that “these unfair increases have far out-stripped the growth in house prices over the same period and are light years ahead of CPI.

“Australians can’t afford stamp duty and neither can the country. It is time our treasurers kicked the habit and stopped taxing away housing affordability.”

Meanwhile, a fairer and more efficient taxation system is on the agenda at today’s National Reform Summit when 90 leaders from business, the union movement, the social services sector, academia and policy think tanks gather to drive the future reform agenda. The Property Council will be the only representative of Australia’s property sector.

Chief Executive Ken Morrison will be advocating policies to unlock growth and allow the economic heavyweights like property to delivery the gains the country is looking for in jobs and productivity.