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The Tax Institute is calling on the government to make crucial reforms to support a stronger and fairer tax and superannuation system.
Government urged to build simpler, sustainable tax framework: The Tax Institute
12 June 2025
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9 minute read
The Tax Institute has committed to working with the re-elected Albanese government, Treasury and the ATO to ensure Australia’s tax and superannuation laws are “fit-for-purpose and effectively implemented”.
In a submission to Treasury, Incoming Government Brief: June 2025 (the brief), the Tax Institute made comments and recommendations towards a number of key announced tax and superannuation measures it believed should be the government’s foremost priority.
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The brief included measures to address financial abuse, payday super, corporate tax residency, small business and instant asset write-off, family trust distribution tax, Division 296 and Division 7A.
Julie Abdalla, head of tax and legal for The Tax Institute, reiterated its longstanding call for holistic, principled and bipartisan tax reform to serve as a core, long-term priority for the government in the Brief.
“Now is the time to future-proof Australia’s tax and super systems through structural reform. Major reform takes time and courage. We must start with the right intent and build toward a simpler, more sustainable framework,” she said.
“The government is navigating significant economic, fiscal and social challenges, compounded by global volatility and ongoing cost-of-living pressures. Businesses, practitioners and everyday taxpayers are also contending with increasing regulatory obligations, retrospective legislative changes, and an increasingly complex compliance environment.”
Abdalla noted that, in short, the brief urged the government to progress many previously announced but unenacted tax and super measures, which included technical and integrity-based amendments that were ready to move forward, along with areas in urgent need of further consultation and legislative clarity.
The brief expressed strong support for the government’s efforts to address financial abuse involving the weaponisation of tax and corporate systems and highlighted the importance of reforms as they would offer stronger protections for victim-survivors of tax debts they were not aware of and didn't consent to.
Abdalla said the institute was urging the government to prioritise consultation and move forward to implement these changes, as current laws fell short in preventing tax debts and lacked adequate mechanisms to resolve them efficiently and effectively.
The brief shared the Institute’s support of the introduction of payday super, yet recommended delaying the proposed start date until 1 July 2026, as the Tax Office, software providers and employers were not yet equipped to implement necessary changes.
Tim Sandow, president of The Tax Institute, said uncertainty around how Australia’s corporate tax residency rules were applied still existed, which created complexity for taxpayers and discouraged business growth.
Sandow proposed that the approach be broadened to treat foreign companies with a significant economic connection to Australia as tax residents and to include trusts and corporate limited partnerships.
In addition, the brief shared the Institute’s advocacy for the instant asset write-off (IAWO) to be a long-term solution with a permanent $30,000 threshold and a broadened eligibility for businesses with an aggregated turnover of less than $50 million.
“The recurrent pattern of annual temporary extensions creates unnecessary uncertainty for businesses and adds to legislative and administrative complexity,” Sandow said.
“A permanent increase to the threshold would provide greater clarity, reduce compliance burdens, and give businesses the confidence to plan and invest in productive assets. Legislating a permanent threshold early in the new parliament would deliver more consistent policy settings and better incentivise small and medium businesses to invest in eligible capital assets that contribute to their growth.”
Finally, the brief said Division 296 and Division 7A were areas that needed significant redesign and attention to ensure they “worked as desired” and the measures progressed.
“Our Brief focuses on reforms that improve integrity, reduce complexity, and provide taxpayers with greater certainty. Retrospective changes and rushed reforms without sufficient consultation have undermined confidence,” Sandow said.
“We stand ready to support the government in balancing its short-term legislative priorities with the long-term vision of meaningful tax reform.”
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