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Pre-budget speculation: Government threatens tax hikes

Mark Molesworth , Partner, Tax |

15 February 2017

Further to the Federal Treasurer’s threat to increase tax if welfare spending cuts are not passed. BDO feels the best way forward would be for the Government and Opposition parties to get together with a bipartisan tax and transfer approach.  Even if the result is not exactly what each side wants, at least we would get a mature debate on the state of our tax system.

Mark Molesworth, Tax Partner at BDO commented “The NDIS is an essential piece of social infrastructure that BDO considers should be properly funded. Because the NDIS relies on a market based system, rather than government-led provision of services, failure to fund it properly will put at risk the service providers and therefore the services available to some of our most vulnerable fellow citizens. In our view this would be unacceptable.”

He continues “From a tax and transfer system policy viewpoint, there is a need for a holistic approach to ensuring the sustainability of the tax base. Single issue campaigns do nothing to promote the goal of sustainability. In any mature debate that has a goal of a sustainable tax base that best promotes the Australian economy and social structure there will have to be trade-offs between elements of the tax and transfer system. Hyper-partisan politics, or hyper-interest group sensitivity will not advance this goal.”