A mid-tier accounting firm has taken aim at Australia’s tax reform strategy, or lack there-of, and has pointed to New Zealand as an example that we should follow.
Look to NZ for tax reform policy, says mid-tier
Speaking to Accountants Daily, Moore Stephens director James Tng said that the high turnover of governments in Australia in recent times has contributed to a lack of tax reform action.
“The current approach to tax reform has been a matter of considering what might be passed (in the context of a Senate they do not control), what the electorate may accept and how the polls might react,” he said.
“Short terms of government have meant governments are at the whim of voters and their ability to institute major change is hampered. The current government and opposition is no less guilty of this.”
Mr Tng would like to see the government do a number of things in relation to tax reform moving forward including reducing complication, remove payroll taxes, and increase GST while reducing personal income tax rates.
He would also like to see GST properly divided between the states and align capital gains tax treatment between entity types.
“In recent years, the (understandable) fear of government is not being re-elected, which leads to them measuring how much political “currency” they might have to institute significant change,” Mr Tng said.
“Most of all the government needs to be brave and have convictions.”
According to Mr Tng, New Zealand has already done many of these things, including reducing complexity, removing capital gains tax, removing payroll tax, and having a top personal tax rate of 33 per cent after an increase in the GST rate to 15 per cent.
“Admittedly the dynamics of a geographically smaller country and arguably less diverse economy affect policy making,” Mr Tng said.
“That being said, the above measures could be applied in Australia for what I believe, would be a good result.”