Taxpayers call for broad tax reform ahead of budget

BDO’s countdown to budget 2017 poll shows that up to 83 per cent of 1,200 respondents agree that the government should reintroduce a broad tax reform process that covers both federal and state taxes.

BDO tax partner Mark Molesworth said he was surprised by the response in certain areas, which was indicative of how strongly taxpayers’ felt about these issues.

“What really struck me out of the poll results is that the public is willing to have a rational and reasonable debate, and to listen to rational and reasonable arguments about changes to the tax system which is different to the strident ‘yes, you will, no you won’t’ discussion that politicians appear to want to have,” Mr Molesworth said.

“There seems to be this feeling in the political establishment that we can’t afford tax reforms.

“It appears that the public is willing to listen to a discussion that says, ‘Yes, this costs the budget money in the short term, but if it is good for the economy in the long term, then ultimately borrowing short term in order to improve the economy and therefore an increase outcome over the long term is actually acceptable’.”

More than 70 per cent of respondents felt that tax changes should be introduced to ease housing affordability, despite a similar majority also voting against changes to negative gearing and CGT discounts.

Mr Molesworth said the contradictory result demonstrated the complexity of the housing issue, and dealing with it required a package of measures instead of focusing on a particular measure.

“When you start talking about the particular measures, people’s minds presumably turn to their own situation and they say, ‘Oh, I have negatively geared rental properties or I take advantage of the CGT discount so maybe we shouldn’t touch those’,” he said.

“Rather than just picking on particular issues, the approach to addressing housing affordability needs to be a package of issues and the interaction of that package needs to be discussed and disclosed so people can see it as a whole that is intended to have these effects.”

Other notable responses included 65 per cent agreeing that the government should fast-track the proposed 10-year corporate tax rate reduction from 30 to 25 per cent, and 61 per cent who want the GST rate increased to enable the abolishment of stamp duties and other state taxes.