Treasurer provides much-needed hope for open debate on tax reform

• Productivity roundtable should deliver long-term tax roadmap
• Tax-to-GDP ratio needs to be sustainable and efficient
• Prioritise GST in reform mix

Australia’s largest accounting body, CPA Australia, today welcomed Treasurer Jim Chalmers’ commitment to pursue meaningful and long-overdue tax reform. 

CPA Australia Chief Executive Chris Freeland AM said reforming the GST must be a priority tax reform for Australia’s long-term national interests to be properly served.

But he cautioned that the government’s requirement that any reforms be budget neutral or budget positive risks acting as a handbrake on genuine discussions.

Dr Chalmers outlined the Albanese government’s plans to boost productivity through tax reform in his address to the National Press Club on Wednesday (June 18). 

Mr Freeland said Dr Chalmers’ upcoming productivity roundtable should be charged with producing a tax reform roadmap.

“However, for tax reform discussions to be effective and to ensure they serve the national interest, the condition of revenue neutrality must be removed,” he said.

“Requiring every tax reform to be budget neutral from day one will stifle ambition. Some of the most effective reforms – such as rebalancing the tax mix or improving system design – may cost money upfront but deliver stronger growth, higher productivity and more sustainable revenue over time.

“A long-term tax reform roadmap is urgently needed. Australia has gone too long without a clear, coordinated plan to modernise our tax system. This should be a key outcome for the government’s productivity roundtable.

“We support a structured approach that includes clear priorities, public consultation and staged implementation. Further, the government must aim to keep total tax to GDP at a sustainable and efficient level.

“Tax reform must be practical and achievable. The best ideas are those that improve integrity, simplify compliance and provide certainty for taxpayers and business.”

Mr Freeland said the tax system is overly reliant on personal and company income tax. Reform must rebalance the system to support investment, innovation and productivity without placing unfair pressure on any one group.

“We welcome that the Treasurer was careful not to rule in or rule out any changes at this stage,” Mr Freeland said. “That must also include examining and fixing the GST and federal-state arrangements. 

“Australians deserve a mature and honest conversation about the trade-offs required to fund the services and resources they expect.”

CPA Australia looks forward to contributing to the national conversation and ensuring the voice of the accounting profession, small business and the broader community is heard in shaping Australia’s future tax system.

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Simon Downes, External Affairs Lead
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