Former Treasury Boss Remarks on Stage Three Tax Cuts

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Dr Ken Henry, a former treasury secretary, shares his thoughts on the heated debate regarding axing the stage three tax cuts due to start soon. Henry believes the stage three tax cuts can proceed as scheduled.

According to Dr Ken Henry, there is a problem with the tax system, and removing the Albanese electoral promise of removing the stage three cuts is not the solution. Henry noted that the country’s revenue should not depend on the personal income tax system. Henry also stated, “As far as I’m concerned, I’d leave them as they are. They’ve already been legislated. They consistently frame what we recommended in our tax review, published 12 years ago.”

According to the former treasury boss, the country needs to understand that axing the stage three tax cuts will only impact the personal income tax system. However, an effort should be made on the other components of the tax system to raise more revenue.

Recently, teal independent Allegra Spender spoke at a tax reform roundtable in Canberra. According to Spender, “tax reform was one of the biggest neglected challenges facing Australia, yet the issue was noticeably absent from the 2022 election. Except for both parties to reassure people that they won’t touch it.”

A former head of the Grattan Institute, John Daley, agreed that the tax reform was politically challenging because it may lead to some people paying more taxes. However, the tax reform proposals needed to be more politically attractive to axe.

Daley added that what is essential is to focus on the changes that were “worth political capital that inevitably has to be spent.” The tax cut is set to see a doubled concessional tax rate for Australians with more than $3 million in their superannuation. According to Finance Minister Katy Gallagher, the government is working on making revisions to maximise revenue potent ial and spending restraint as necessary.

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