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Monday, 18 March 2013
Page: 2481


Mr OAKESHOTT (Lyne) (12:16): As I did last year, I seek the support of the House to pass a motion that, in the upcoming budget, a separate document be attached to the budget papers that provides a 10-year road map on comprehensive tax reform and on how the budget is talking to those mid-term structural issues that the economy faces—not just the four-year forward estimates, as is the tradition, but more focused on the 10-year agenda, where so much of Australia's story lies. I hope that the House once again supports this motion. Because the House supported it last year, a document was attached to the budget papers. It was a very skinny document. It highlighted the need for more of that 10-year story to be told and for executive government to be encouraged to do more focused work on sharing the 10-year story. Really, the only item of any significance in last year's 10-year road map was the timetable on the transition from nine per cent superannuation to 12 per cent superannuation and the staggering of that transition over time.

Whether you like that policy or not, it is a good example of what Australia and this place need to do on a number of fronts. I continue to emphasise the need for comprehensive tax reform and for a 10-year story to be told as to how we are going to transition from 125 local, state and federal taxes in our country, where only four of them do 90 per cent of the lifting, to a more efficient tax base and away from the many, many inefficiencies in-built in our tax system, which will, if unaddressed, have a material impact on our standard of living as Australians. Up till now the comment has been, 'Oh, we can't afford this,' or, 'We can't afford that.' It really is getting to the urgent point where it is less about what we can afford and more about the point that we cannot afford not to do it. It will start to cause material damage to our standard of living.

This parliament has done many good things and much good work. Despite the comments of the member for Riverina, when I entered the room, about climate policy, I think that that is one of the important steps that has been taken in this parliament. It is a market based scheme that is a direct lift from the Henry tax reform work. It is a step in the right direction on tax reform as it is on responding to climate policy. Not only is it a market based mechanism responding to many of the science questions, but directly attached to that is a significant lift in the tax-free threshold from the middle of this year from $16,000 to $18,200. Again, it is a significant step along the journey of the Henry tax review recommendations, whilst he did recommend lifting the tax-free threshold through to $25,000 and removing even more people from the tax system altogether and all the inefficiencies that go with that both for individuals and government. We have taken in this parliament—to this parliament's credit—a significant step in moving along that journey of lifting the tax-free threshold and removing many people from the burden on participating in the tax system on an annual basis at all.

I would hope that, as this place starts to move into election mode, both major parties start to put their cards on the table with regard to the lift to the $25,000 tax-free threshold. At the moment the position of government is not clear on that and the position of the opposition is not clear either, nor in public commentary is it clear on whether the $18,200 will be maintained or whether we return to the non-Henry recommendation, which is going backwards in the tax-free threshold and bringing nearly a million more Australians back into the tax system. I hope that can be corrected.

Some of the other good things this parliament has done are in the information communication technology and regional equity coming through on that. I am personally of the view that, so far from what I have seen, the differences in policy from either sides, whilst on the surface look like a fight between cat and dog over the NBN, when it gets down to the differences in detailed policy, they are not great. I would also say, likewise, that I hope on the big push on education policy with regard to secondary education funding and the delivery of regional equity on that front that we can make room for that to happen in the next six months. I hope that has bipartisan support when it happens.

All of those pressures make the point that there are big demands coming down the pipe in a policy sense and we have to make our tax system talk more to some of these challenges and talk more between local, state and federal considerations. It will, as I emphasised before, have a material impact on our standard of living if we leave this issue unresolved.

I think it has been a great disappointment that this parliament has not been able to get executive government to negotiate either through COAG or other means to put some meat on the bones of comprehensive tax reform and get some agreements happening on a whole range of inefficient tax issues whether in superannuation, housing or any of the 130 recommendations made by the very good work of the Henry tax review. Some of it has happened—the loss carry-back work with small business is excellent. The tax free-threshold lift coming in the middle of this year is excellent. The establishment of the Tax Institute for furthering the research base in some of these tax problems is excellent. The removal of low-income superannuation tax payments and the regressive nature of them is excellent, but they are cherry picking the nature of what is meant by comprehensive tax reform. It is sitting down with those state governments and working through in a negotiated environment the many issues of overlap, double-up and inefficiency that are frustratingly accepted by governments and to the direct detriment of the standards of living of all Australians.

I mention the ACT as a bit of a shining light in what they have done with stamp duty and housing, and the transitioning that happened there. What a great example for other states to consider, and for us as a parliament and hopefully for a government to consider as to how to facilitate that work for other states. They have a road map in place for the removal of stamp duty on property as a really good example and a challenge to other states to do likewise.

The mining royalties issue remains outstanding and could be a flagship for negotiation between the Commonwealth and states; we have GST payments now proving to be a point of conflict between the Commonwealth and the states; we have horizontal fiscal equalisation as a point of conflict between states like Tasmania and Western Australia and causing confusion to many and we have vertical fiscal imbalance that is putting pressure on both the policy and political points between the Commonwealth and states. We cannot just leave these as unresolved. They are great opportunities to bring everyone in the room and nut it out. Unfortunately, for some reason we cannot get governments to get there.

Once again, I put the call on the table for the road map in the budget papers and that all of us pressure whomever it is we need to pressure to get comprehensive tax reform dealt with between the Commonwealth and the states; that we get a reduction in these 125 taxes that are currently in play; that we work the efficient taxes harder—four of them are doing 90 per cent of the lifting, so let us focus on those. Let us build an efficient tax system and let us lift the standard of living for all Australians.