CHASE:
Kelly O’Dwyer, tax reform is always hard at the best of times, it can be argued that the Government is not enjoying the best of times politically, so why take this on now?
O’DWYER:
Well, it’s important that we understand exactly what is going on with our tax system at the moment. We are going to see dramatic imposts on our budget, increasing as our population ages and as we see participation rates decline. That was made clear in the Intergenerational Report. We know that our tax system does need reform. At the moment, we’ve got 12 companies that pay a third of all company tax, when we have got around about 800,000 companies in Australia. Now that means that our system is somewhat at risk. Around about two percent of taxpayers pay 26 percent of all personal income tax and, we know that over the next 10 years, taxpayers who are currently paying the second and top highest tax rates are going to increase from 27 percent at the moment, to 43 percent of those paying personal income tax. Now this is not a sustainable system. We need to have a talk about how we can make taxes lower, simpler and fairer, and that’s why we have put this tax discussion on the table.
CHASE:
Now the Government has been quoted as saying that there’ll be no changes to tax if it doesn’t have all of the States and all of the Parties on board. There are suggestions that the ALP is on board as far as winding back those super concessions for the rich are concerned. Is that your understanding?
O’DWYER:
Well, what we’ve said is that, when it comes to the GST, that the GST is a tax that required consensus. The GST is a tax that goes directly to the States and Territories. Every single dollar goes to the States and Territories to fund all of their services, and so any change to the GST is something that needs to be agreed with all of those States and Territories, talking to the Federal Government; needs to receive bi-partisan support with the Labor Party as well, before any change can be contemplated.
CHASE:
But I was talking about superannuation concessions for the rich—the ALP has indicated that they’d be on board for that. Is that your understanding and would that be a goer?
O’DWYER:
Well, look, the ALP are always on board for increasing taxes. We know that. They’ve had a pretty …
CHASE:
Well that sort of talk’s hardly going to promote bipartisanship which you want on this?
O’DWYER:
They’re always very keen to talk about how they can increase tax. We’re also wanting to talk about how we can make taxes lower as well, and so I think Labor only wants to talk about one part of the equation here—how we can increase tax—without talking about how we can also reduce tax, whether that be personal income tax or whether that be company tax—because we need to be globally competitive. When we look at other nations around the world and we look at our OECD competitors, we have one of the higher company tax rates. We’ve seen the U.K. and New Zealand recently reduce their company tax rate. Ours is around 30 percent, the U.K. is about 20 percent and some of our Asian competitors such as Singapore, is around 17 percent. So we need to talk about the whole tax picture which is why we haven’t ruled anything in or out, which is why we’ve put everything on the table.
CHASE:
O.K., business this morning is saying that Joe Hockey should go for broke—they want you to forge ahead with what they call comprehensive reform. The newly re-elected NSW Premier Mike Baird is interested in getting the State to be allowed to levy their own income tax. Is that on the table?
O’DWYER:
As I said, we’re not going to rule anything in or out—we’re very interested in hearing what everybody has to say around tax and there’s going to be plenty of opportunity. We have asked for submissions to the very first tax paper—the discussion paper that we have just recently released as of yesterday. That will be due on the first of June. Then there’ll be a second opportunity to talk about specific policy measures in the second half of the year. And before any changes are made, we will take those proposed changes to the electorate before the election in 2016.
CHASE:
Kelly O’Dwyer thanks for giving us the Government’s perspective on that and Happy Birthday to you.
O’DWYER:
Thanks very much Steve.