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HOCKEY
Treasurer
Sunday, 29 March 2015
TIME TO RE:THINK OUR TAX SYSTEM
Today marks the start of a conversation about how we bring a tax system
built before the 1950s into the new century.
The tax discussion paper, released today, begins a dialogue on how we
create a tax system that supports higher economic growth and living
standards, improves our international competiveness and adjusts to a
changing economy and new opportunities.
The recent 2015 Intergenerational Report illustrates that we need to take
continued steps to boost productivity and encourage higher workforce
participation to drive future economic growth.
While the report projects income growth will slow, it also shows that
Australia can continue to prosper by making the best of our
circumstances and opportunities.
Tax reform is a critical part of the Governments policy to create jobs,
growth and opportunity.
The problem we face is that our current tax system, which was designed
before the 1950s, is ill-suited to the 2050s.
As a result of changes driven by globalisation and the rise of the digital
economy, Australias heavy reliance on income taxes may be
unsustainable. This over-reliance is projected to increase further, largely
as a result of wages growth leading to individuals paying higher average
rates of tax (bracket creep).