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Tax Reform Summit overview: continuing the debate

Tax Reform Summit overview

Prime Minister Malcolm Turnbull has recognised the importance of common ground being reached on economic and social policy at two major reform summits held in Sydney in August and September 2015.

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The first was the National Reform Summit held on 26 August 2015 and hosted by KPMG. Here the major leaders of our community – business, social services and the trade union movement – came together in an effort to find consensus and to map a route forward in terms of reform.

Nine tax reform principles were established at the National Reform Summit which are outlined in this publication – calling for action on key issues such as returning the budget to structural surplus over time and lifting productivity.

The second Summit held in Sydney on 22 and 23 September 2015, the AFR Tax Reform Summit, was sponsored by KPMG. Between these two important summits the Liberal Party elected a new leader on the evening of 14 September 2015. Malcolm Turnbull was sworn in as the 29th Prime Minister of Australia on 15 September. On the 21st September, Scott Morrison and Kelly O’Dwyer were sworn in as the 39th Treasurer and 12th Assistant Treasurer respectively. The Assistant Treasurer was also sworn in as the 16th Minister for Small Business and is one of the 21 members of Cabinet.

This publication explores key insights from the two summits, includes the results from a poll on the objectives of tax reform and potential next steps for reform with the Turnbull Government.

AFR Tax Reform Summit – Day 1

  • Reform personal tax concessions to lower personal tax rates
  • GST considered a left wing tax in Scandinavia due to its efficiency
  • Corporate tax rate reduced to approximately 25 percent to protect tax revenue on ‘rents’ enjoyed by Australian companies.

AFR Tax Reform Summit – Day 2

Key themes from ‘Towards a better tax system’ panel included:

  • GST – broaden the base
  • Substitute a land tax for stamp duty
  • Dealing with bracket creep
  • Three out of four panellists thought company tax needs to be reduced.

Included is an account of a mid-panel discussion news break that the Turnbull Government would be placing the Re:think whitepaper on hold.

Brendan Rynne, Chief Economist, KPMG Australia, provides summary analysis of the 'Individual tax and the welfare system' roundtable. Key points included:

  • Our progressive tax arrangements are like the ‘Battle of Britain’ – Never was so much owed by so many to so few.
  • Taxpayers are using negative gearing on property as the primary method to reduce their tax exposure as the current tax arrangements provides a high incentive to do so – if it was less extreme then possibly the tax up of property as an investment vehicle might be more moderate.
  • The youth are really the ones losing out in terms of government allowances.

Read Brendan Rynne's analysis (PDF 848.2KB)

AFR Special Wrap

Key thinking, discussion and debate on tax system objectives, challenges, and policy options from the 2015 AFR Tax Reform Summit.

A key highlight is an interview with David Linke, National Managing Partner, Tax. David discusses the concept of the creation of an innovation company to assist the growth of the nation's innovation sector. This is one of over 60 recommendations from KPMG's submission to Treasury on tax reform.

Also featured is a focus on small business and the need to rethink small business tax.

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