Australian Financial Review
This month’s Federal Budget will be the first major test of the Albanese Labor Government’s ability to be trusted with our economy. To pass, the Government must deliver on its election promises while also positioning Australia for growth.
Australians are looking to the Government to rein in spending that – with the effects of the pandemic – has left us with net debt of $632 billion and a budgetary deficit that Treasurer Jim Chalmers expects to keep “north of $30 billion”.
At the same time, the Budget must deliver on promises made during the election: another test for a Government that aspires to do better on trust and integrity than its predecessors.
Over the past month, there has been much talk about the possibility of dismantling Stage 3 tax cuts, a scheme initiated by the former Morrison Government and backed by Anthony Albanese’s Labor Party ahead of the May election.
The legislated Stage 3 cuts will create a flat 30 percent tax rate for those earning $45,001 to $200,000. As these changes will significantly impact households in my electorate, there has been some public interest in — and misinformation about — North Sydney’s position on the cuts.
So let me be clear: as North Sydney’s representative, I remain of the position that Stage 3 tax cuts should go ahead in 2024 as planned.
For the tax cuts to be realised, the Government must identify and unlock other revenue streams and opportunities to avoid unnecessary spending.
One of the biggest challenges we have as a nation is how we generate revenue. Quite frequently we fall back into a debate about personal income tax, but to me, that’s like trying to drive an automobile with just one wheel and leaving the other three completely off the vehicle.
Beyond taxing our workers, there are many other important opportunities to generate revenue for Australia including appropriate taxing of multi-national companies, and windfall taxes to help ensure that profits from the energy crisis are more fairly shared.
As former ACCC chair Rod Sims has said, it is “really unhealthy for society” to have Australia’s oil and gas exporters posting record profits from high energy prices during the Ukraine war, while our households energy costs skyrocket.
We also must not overlook opportunities to reduce spending in wasteful areas including offshore processing of asylum seekers, and unwanted and unnecessary infrastructure like the $600 million Kurri Kurri Power Plant.
As Dr Chalmers said last month, the Budget is just the beginning of a big national conversation about how we fund the social and economic progress we want to see.
Income tax is just one element of this; the Government must be clear on what other economic reforms they will be brave enough to pursue.
This year’s Federal Election showed that Australians want a government with integrity. We must keep our election promises if we are to repair the dangerously low levels of trust that voters have for politicians today.
The government can afford to keep the legislated Stage 3 tax cuts. What it can’t afford is to let voters down.
So let me be clear: as North Sydney’s representative, I remain of the position that stage three tax cuts should go ahead in 2024 as planned.
One of the biggest challenges we have as a nation is how we generate revenue. Quite frequently we fall back into a debate about personal income tax, but to me that’s like trying to drive an automobile with just one wheel and leaving the other three completely off the vehicle.
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