MP touts tax reform blueprint as Treasury mulls changes
Lower income taxes for working Australians should be a top priority in the budget, independent MP Allegra Spending will encourage the treasurer as she lays out her vision for fixing the country’s economy.
Ms Spending will address the National Press Club on Wednesday in the first of a series of tax reports laying out her vision for tax reform to boost productivity and tackle intergenerational equity.
The first whitepaper will focus on the personal tax system and how younger workers are increasingly being relied upon to shoulder a greater share of the tax burden as the population ages.
Meanwhile, those who earn income from assets, although they tend to have much more wealth, often pay a smaller tax rate, thanks in part to rising house prices that have made homeownership a distant prospect for young Australians.
Ms Spending, a former consultant with an economics degree from Cambridge, has been outspoken about the problems plaguing Australia’s tax system and helped push Finance Minister Jim Chalmers towards reform.
Following an economic reform roundtable in 2025, where Ms Pooler was the only participant, Dr. Chalmers instructed the Treasury to look at reforms that would make the system fairer for young Australians and increase productivity.
The rollback of capital gains tax relief and negative incentive concessions for real estate investors are some of the measures being considered ahead of the May 12 budget.
The Treasurer hosted a meeting of market economists, including CBA’s Luke Yeaman, Westpac’s Luci Ellis and Challenger chief economist Jonathan Kearns, for a discussion on the economy and budget on Friday.
Dr. declined to talk about Friday’s discussions. Kearns told the AAP the treasurer had a tough task ahead if he was to achieve tax reform targets without leaving the budget in even worse shape.
To implement large tax packages, governments have historically had to “buy out” losers, meaning they tend to lose revenue.
This is something Labor cannot afford right now.
The former RBA official said that although inflation remains high, deficits are forecast for at least the next decade, meaning the government should aim for a balanced budget or a slight surplus.
Dr Kearns said that, given competing priorities, cutting government spending from its historically high level to enable tax reform while getting the budget into better shape should be part of the conversation.
Australia’s Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national news channel and has been providing accurate, reliable and fast-paced news content to the media industry, government and corporate sector for 85 years. We inform Australia.
