As you may be aware, the Treasurer addressed tax reform during the National Press Club event on Wednesday. Labor made several commitments before the election, but the question remains—where will the funding come from? They are now considering tax reform. Although the Treasurer stated he is not currently inclined to raise the GST, it remains on the table as an option. Are we expecting to pay more tax in the near future?
Labor Open to New Ideas on Tax Reform
nned2say on 19/06/2025 - 12:37
Comments
Why is this rated down? It's statistically true
In 2022
5% of people were in the $180k + bracket
those 5% of people contributed 40.1% of the net tax revenueIf you want to work hard you pay more tax
If you want to take it easy you pay less taxAnd yes - people who earn more work harder it's simple maths - your remuneration is a reflection of your stress, sacrifice, risk that you adopt in your role
https://www.ato.gov.au/about-ato/research-and-statistics/in-…
40.1% of the net tax revenue
So the people in the lower brackets combined with corporates and all consumers (GST) only contributed 59.9% of net tax revenues?
No, the figure has been misrepresented. It is not 40.1% of the entire country's tax revenue, it is just income tax. Income tax only accounts for 39% of Australian tax revenue or 48% depending which source used. It's hard to say exactly how much those individuals contribute though because they will also be paying many of the other tax sources like company tax, GST, etc.
@donga100: Its not misrepresented.
Those are the percentages paid out of all income tax received.
You have just expanded the categories now and said that all these other taxes are paid but that is not what was presented in the ATO charts.
It is specifically income tax.
Also
Companies don't pay GST - they offset any GST received with GST expended
Individuals like us pay GST fully and we don't get any offset
So I don't even get the point you are trying to make, it just means things are much worse
https://www.ato.gov.au/businesses-and-organisations/gst-exci…
@TheBilly: For the sake of accuracy, it's not all income tax, it's income tax for individuals. Hence why the percentages add up to 100%.
Outside of this is income tax for companies, trusts (if not fully distributed) etc.
Outside of that is other federal taxes (eg GST, WET etc) and state based taxes (stamp duties, land tax, payroll tax etc)
@donga100: GST is 10% on all goods purchased.. which is in addition to everything else the government takes.
Let's see what Labor does.I personally look forward to living in housing commission in the future on the tax payers dime.
(why work if i can still enjoy a good life and smoke meth and get a handout and a roof over my head, while the idiots of society slave away for me to bludge - increase taxes, I guarantee more will feel the same.)@donga100: The discrepancy in the % of tax that is income tax is almost certainly due to the Treasury figures including STATE taxes while the pbo figures are federal taxes only.
We all contribute to any given tax because different groups in the economy have very different abilities to pass on the tax through raising their prices (or in some cases through suppressing other peoples' prices, such as their wage). It can be incredibly complicated to work out who actually loses money when you introduce a new tax, especially if it is an indirect tax like GST or payroll tax.
Economists refer to this difference as the difference between the "formal incidence" of a tax and the "final incidence".
If you take the ATO statistics as they are presented then yes that is correct. But not GST, that is a separate tax on all of society. But just remember, individuals pay GST, not corporations/businesses. Only individuals so if you brought it into this discussion it just makes the percentage worse for people and better for corporations.
To clear up my meaning I should have said….
…combined with corporates (paying company tax) and all human consumers (paying GST)…
We could fix that by adopting a flat tax system rather than progressive.
25 percent from 1st cent to last for everyone.
No need to readjust brackets every few years, no need to worry about if working just a tad harder is worth it or not.
@some123: (profanity) that, how about a flat % of wealth tax.
Then most of us on $500k or less a year will only be paying a tiny fraction of the tax we pay today.
people who earn more work harder
yeah, for sure, privilege, inherited wealth, luck, fraud and exploitation of others have nothing to do with it.
Work harder! enrolled nurses, trolley pushers, labourers, teachers aides, cleaners, uber drivers, aged care and childcare workers - and you too can earn more.
Apply a bit of common sense to your comment. Role for role a harder working person will have better pay outcomes. Upskilling, working smart, hard and being able to network would more than likely let those trolley pushers, uber drivers etc expand into better paying fields.
this has always been the case, those that are valued more by a society tend to earn more.
so dont work in an industry that noone cares about.
Plumbers earn more than doctors these days.
"And yes - people who earn more work harder it's simple maths - your remuneration is a reflection of your stress, sacrifice, risk that you adopt in your role"
Not really true, IPA style rhetoric. And I'm almost at that 180k p.a mark. (Maritime)
“ And yes - people who earn more work harder it's simple maths - your remuneration is a reflection of your stress, sacrifice, risk that you adopt in your role”
Joe Hockey, is that you?
I worked way harder working on a shop floor than i do in an office and earned half as much.
If you get paid more you pay more tax.
The tax system should be reversed so that hard workers who do actual work and hours are taxed less than passive income earners who do nothing.
The government earns enough off the back of the tax payers of Australia.
Key items that should be on the agenda:
CUT GOVERNMENT WASTE (the tax payer paying $5K for something that costs $400 anywhere else in the country by individuals and businesses is an absolute joke - the government should NOT be paying to prop up unprofitable businesses that simply want to price gouge the tax payer - government employees are complicit - a prime example - the police Breathalyser, or how about the humble speeding/red light traffic camera - 2 million for most of them (its literally a camera with a sensor - sure, get a good one… but it doesnt cost above 1 million - but to the tax payer (for you and me it does).
Zero DEFICIT - the future generations should not be funding for the failures of our political leaders - we should say for each $10 million the government goes into deficit (state or federal), State and Federal politicians lose $10K from their pay packets (watch how quickly they pull their fingers out and how quickly budgets go into surplus magically)
CUT IMMIGRATION - I'm not saying immigrants are a problem at all. But the "housing crisis" is one of the government's own making. We should be focusing on increasing our housing supply, not diminishing it. If the government only allowed trades or those that got apprenticeships here from other nations we'd have no housing shortage.
BUILDING SUPPLY - We have the 5th largest land mass of any country in the world, we DO NOT need everything in 1x location. Spread out! - Increase immigration of trades, provide bridging courses, free up crown land for housing opportunities.
DECREASE CORRUPTION at all levels of government (Cronyism, nepotism, kickbacks, quid pro quo's, corruption at all levels - its ridiculous) - the government shouldnt be imposing its will
FIX NDIS - the cost blowouts are disgusting - this should be fixed as a matter of priority.
INCREASE PRODUCTIVITY (increase productivity, cut red tape and in turn reducing government headcount - more government workers should be fearful of job losses and should actually do work (being there and talking about work is not doing it), there should be a complete uplift in productivity - I've worked with over 1000 businesses and 20 different state (multiple states), federal and local governments over my career, the waste is egregious and disgusting - if you physically saw how lazy, entitled and ineffective 99.9% of government workers are, you'd be storming Canberra. You would have never seen more people in your life that are great at talking about work and how it should be performed (without ever actually doing it) and your tax dollars are paying for that privilege - cut the waste - the government's purpose is not to create careers off the tax payers back and in turn leads to career incompetence.
There's much more but the above should be a start.
These are all solutions which address the core problem and would turn Australia into a super power. But you are expecting politicians to do something other than line their own pockets and look for ways to fulfill their masters (mining, pharmoceuticals, other corrupt business) desires. Look out outgoing COVID czar mark McGowan. Making millions as a "mining consultant". Pretty much just kickbacks for all his sucking.
yeah, he's on multiple boards of multiple companies now (including BHP).
WA state government is ridiculously corrupt.@alexdagr8: His treasurer did all right thank you very much when he snatched it. There should be a 6 month gap, where they can't be employed by big corporations after leaving govt ( for front benchers and higher).The line between govt and industry is dodgy there for sure. I recall King McGowan even overtly castrated their EPA for daring to do their job, re the large impacts of massive resource /energy projects. It's normal across Australia now. NT makes WA look tame.
Any government is merely a system for serving the interests of the ruling class. It was it is and it will be.
- This is always done. Don't become DOGE.
- I'm down with this.
- We need immigration to do the jobs that we can't fill.
- Agreed.
- There is very little corruption in government. Policies are in place already to counter all of the things you mentioned. However, maintaining and improving the current level of vigilance is extremely important.
- 100%
You want to focus on preventing corruption but also reduce red tape? Most of the red tape in government is around controls to prevent and manage potential corruption. You can't have it both ways.
Tax mining appropriately.
- Its not - this isnt DOGE.
- you havent seen it - just because a policy is in place doesnt mean its adhered to.
- Yes you can have it both ways - its called competence - something the government severely lacks in the public service.
- Its the biggest form of taxation in the country for any private business (stats back this up) - what you should be looking at is taxing oil and gas companies appropriately and having adequate sovereign reserves.
We need immigration to do the jobs that we can't fill.
That's like saying we need to import food aid because we can't grow it ourselves. It's nothing but learned helplessness applied at a national level.
The nation has more than enough people, and has more than enough wealth, to meet its own worker needs, the problem is logistics (and corruption, wage suppression, etc).
Plus, if we stop doubling population via immigration every ~30 years, people will have more babies, so even more workers born right here.@ssfps: Our birthrate is around 1.6, we are doomed. We have so much knowledge yet we are failing to breed, what a laughable way for the west to collapse.
largely agree.. but as always - the devil is in the detail.
Government 'waste' - what people define as waste varies wildly.. and may in fact be someone else's livelihood (submarine engineers vs. well-being assessor vs. traffic management officers etc.)
'DEFICIT' - the smartest people you know don't go in politics for a variety of reasons - low pay is probably the smallest reason, but cutting politicians' pay -> paying peanuts -> get monkeys.
I'm actually all for this, but the majority of their benefits are in fact from oil companies etc. - Fix that, then we can start paying them more.Immigration - we're actually doing quite well at getting the 'cream of the crop' with how difficult we've made it for them.
So much so, that very few of them take up the trades needed to build more houses -> labor becomes more expensive, developers hang on to their cash & landSupply - again agree, but similar issue. Pick your favorite city, chances are your workplace will be within 20km of the CBD. Nobody wants to commute over an hour back and forth -> opposite of 'spread out' happens in feedback loop and we get exactly what we have - expensive clusters. This is the reason developers will not build in the middle of nowhere without significant govnmnt incentives.. and then you just end up with empty houses that no one wants.
Corruption - similar issues. All of what you've described is your subjective judgement of behaviors. Without it being explicitly outlawed, anything goes in the political sphere, and 'imposing your will' is literally why you would want to go into politics.
NDIS - we need it, cost blowouts are disgusting in any government initiative. Just hold people accountable.
Productivity - agree.. but this is a cultural problem. Very few of them want to be lazy - but the amount of times their initiatives get trampled, hard work overlook for the loudest person in the room… it's no wonder you'd stop trying
we're actually doing quite well at getting the 'cream of the crop' with how difficult we've made it for them
I disagree. What I've seen in engineering lately is we are often just taking in incompetent engineers from developing countries that are not skilled and less capable than a fresh Aust uni grad. Only thing they are great at is driving down salaries.
Only thing they are great at is driving down salaries.
which is the core reason for “skilled immigration” but… shhhh.
@stewy: I know someone with a PHD in electrical engineering who needed help assembling flat pack furniture from ikea.
@Muppet Detector: not surprised..
PHD = extremely qualified in an extremely narrow field
i.e. can't wire a house but breaking new horizons in bleeding edge tech, 3nm quantum wafers etc.@Muppet Detector: As mentioned above different skillset. A PHD engineer would be more likely geared towards academia and research than practical application of engineering in general industry. So not surprising they aren't hands on.
In any case many of these "skilled engineers" we are importing wouldn't be able to do research or academia either as they struggle to even follow simple instructions, yet alone think critically for themselves.
@stewy: I did have some expectation that he would be able to follow a set of instructions to build flat pack furniture intended for general population guidance.
Great take. These are low hanging fruits that are easier to do, but hard to define (doesn't mean we shouldn't do it, we DEFINITELY SHOULD) and politically impossible (This is the real reason). Which is incredibly sad. Everyone knows the solution. Polies know the solutions to all problems. It's just no one is willing to take responsibility because once they do - they'll be labelled with it for the rest of their lives. I.e. 2016 Labour election.
The public is eating their humble pie. Until the attitude of the public change, nothing will ever change, again nothing will ever change. There is no incentive for things to change. (On a side note - labour being voted back in with a major was a sign that "MAYBE" things might change)
If the public were actually upset about this, they should definitely be showing with force by calling your local member, organising groups, start actually taking power back and then all these things that are "politically impossible, becomes possible with the public backing". But why bother? Most aussies are lazy and don't care "enough" to do anything about it. Everyone in Australia has been selfish and that will never change. You only see these changes happen if people cared enough about others, about society about what kind of society they want to shape. Australia's a great country, probably because of the people who shaped it before I was born. Those people no longer exist, and now it's just about how much I can get, and not about maybe I can lose a few things for the betterment of society. I.e. NIMBYism, or just the sheer selfishness and greed of people i.e. landlord's attitudes in Australia.
Solution is people need to wake up, and vote for the better good for society other than just about themselves. Vote for things you may personally disagree but see the benefit beyond just themselves. And if they make mistakes, you still back them because as long as they believe in the betterment you do to, even if it burns you because at this stage we have to make sacrifices, as none of this we are facing is natural (it's quite unnatural). Until that happens all of this is politically impossible, and it'll continue - I'm sad but it is what it is. I'm glad people are talking about it but I'm doubtful of the resolve and will of Australians (A far cry from what Australian history says - we all become comfortable and soft)
pay less if you don't want to work hard.
This is quite real in my team now, anecdotally. Several of us have reached the point where next FY we've decided to work drastically less by taking a few months off at the end of each FY so we can avoid all the upper tax nonesense like div293. It's just not worth redlining all year with the diminishing returns we have in the current tax structure, unless you have negatively geared housing or something equally unethical to make it more efficient.
The irony of this is that almost every terrible gov policy is based on the pursuit of GDP, a measure of productivity. Yet the tax structure is specifically reducing the productivity of many of us.
The nail in the coffin for me was seeing that stuff like the div293 is "politicians excempt", while they do shit like this $400m+ blowout on a $90m budget. If we did that we'd never find work again in our lives.
It's all so tiresome.
should factor in hours worked.
Why?
The dude working 20 hours per week likely elected to go part time for work life balance. The same dude could elect to work full time and earn $200k but pay a lot more taxes.
The dude working 60 hours per week is doing it all wrong. That's just crazy.
You do know that junior roles exist right? Would be plenty of people around doing those kind of hours on that money
Either way it's insane. 10 hours per day for 6 days a week just to brown nose the boss and hope to get somewhere. Stuff that bullshit for $30 equivalent per hour.
@MS Paint: Exactly why they should pay less tax. Some people work multiple low-paying jobs just to stay afloat with no brown-nosing.
your employment contract would specify 38 hours per week, plus reasonable additional hours (meaning 1 or 2, equating to 40 hours per week) (unless you're on shift work/ hourly wages)
working more than that and you're either:
-getting rorted (taken advantage of by your employer)
-trying for a promotion (which you probably wont get anyway - good luck!)
-incompetent and cant do you job in the specified hoursOR
• working for yourself
• have more than one job
what about the people who have spent years studying and training
What about them?
if people get taxed by how many hours worked it doesn't account for the cost of obtaining the skill
@Hvrd: I don't understand your point.
I do not think tax on hours worked is a good thing.
I do know that some get paid to earn their qualifications/aquire their skills. (Where employer pays for your training and time spent training or at least pays for the cost of the course).
I do know that some don't get paid whilst getting their qualifications (such as uni degree - though a lot do get some access to Austudy type payments whilst they study)
I do know that some get paid a reduced wage to train and learn (aka apprenticeship)
But I don't get why the cost of obtaining the skill has anything to do with getting taxed by how many hours you work.
If it's not too much trouble, would you please see if you could explain that a bit further for me? I really want to understand this perspective.
@Muppet Detector: So a skilled worker works 1 hour and makes $100 and an unskilled worker works 2 hours and makes $100, they have both made the same money but the skilled worker will pay more tax meanwhile the skilled worker also has 50k in education debt and has done lots of unpaid work to get the skill
@Hvrd: If they are taxed on hours worked then the guy who works two hours gets taxed more than the guy who works one hour, doesn't he?
EG: $5 tax on every hour you work.
guy who works 1 hour only pays $5, resulting in him bringing home $95
Whereas
guy who works 2 hours pays $10 to earn that $100, so he only brings home $90
This leads me to believe that the skilled worker will pay 1/2 the tax amount that the unskilled worker will.
skilled worker pays $200(5x40) tax but he earns $4000 > thus take home pay is $3,800 for a 40 hour week.
unskilled worker also pays $200 tax if he works 40 hours, but only brings home $1800 as he only earns $2,000 for his 40 hours work.
If unskilled worker earned $4000 like the skilled worker, not only would he have paid $400 tax on the same amount, but he would have had to work 80 hours to earn that money and then only bought home $$3600 for the same amount of money earned.
THEREFOR: I don't understand why the skilled worker is paying more tax.
I think the education debt is the price you pay for working less hours to earn more money.
@Hvrd: Education debt is a choice.
If you decide that you do want an education that has an overt cost, there are avenues to obtain that education at no cost if you choose and in many cases, even be paid a living wage whilst you do study, including super etc and receive food and accomodation support as well at no direct cost to the student "all paid for by gov".
Additionally, you are even guaranteed employment upon graduation, so effectively paid to train and gain industry experience whilst receiving a full wage and benefits.
This is not means tested and pretty much available to anyone who qualifies for university acceptance.
Also of note is just because a worker doesn't have qualifications in the field they are working, doesn't mean they have not worked for free to gain whatever skills they do have, nor that they don't have an education debt.
@donga100: You are not required to commit your entire youth.
Regardless, if you don't want to do it, pay for your own education.
The point was that there are ways to achieve a debt free education if you decide that you want a university degree.
Do note though that there are some employers who provide similar.
Way too much room for fraud for that to work. Self-employed people could over-report hours to pay less tax, employers and employees could collude to minimise tax.
I agree with this. But I still hope that there would be a clever way to avoid the fraud. The goal is so that someone working multiple jobs everyday, 12+ hours a day, at $30 per hour, is taxed less than someone working just 4 hours a day at $100+ per hour.
Are we expecting to pay more tax in the near future?
What exactly are we supposed to discuss here? No details have been released yet.
What would you do if you were x type of open ended discussion
would u still love me if i was a worm
uhh no but don't call me a wormophobe
Raise GST, reduce income tax. thats how it should be, the more i use the more i pay. fair.
Doesn't that still hit those who can least afford it, the most?.
Consumption tax definitely affects poorer people
what a human consumes to survive should be the same no matter how rich or poor they are
if a family decides to have 1 child because they are time poor career people they will consume less
but if your a baby factory family with 10 children of course your consumption will be higher and therefore it costs you more…..your burden on social and government services is also significantly higher
@MrThing: And then you get people who are sick and/or disabled.
Screw them if they consume more goods and services than the people who don't get sick or disabled, eh?
@MrThing: Even if you compare a range of single people who all consume the exact same things (dollar for dollar the same with the same total dollar value of GST paid), the lower income earners will pay a higher percentage of their income as GST than the higher income earners.
GST is by definition of how it is applied is a REGRESSIVE tax.
@tenpercent: Sure if they consumed exactly the same but typically wealthier people consume more, and consume higher cost goods.
@MrThing: People with more money consume more. Just watch the change in lifestyle when someone comes into money.
Having babies isn't a burden on society, the gov deliberately spends money trying to encourage it coz it's good for the economy.
But the way I see it, the gov benefits partially compensate for the increased consumption. Obviously all gov benefits should increase if GST increased, which I totally think is the way we should be going (and should have in the first place.)
Hopefully it'll give them the motivation to get richer.
Why would someone in a society care about others?
Fair point
Or pay for stuff they dont use?
@Jaduqimon: Indeed. I haven't used that fire station or hospital near Jaduqimon's house. Close them down!
@Jaduqimon: If you're not claiming more than you pay you're subsidising those who are claiming more than they pay.
@Miss B: thats fine, insurance is voluntary. if you think its not worth it for you, you can stop paying.
@Jaduqimon: Wait are you serious ?
You think home insurance and health insurance negate the need for fire stations and hospitals ?@boirganz: I don't know what he thinks, but that isn't what he is saying.
If that's what you think then you have missed the point.
@mskeggs: But you have probably used the fire station or hospital near your house whereas those in other districts didn't.
I'm thinking those sorts of services are a bit like insurance.
Everybody chips in a small amount to make the services available to as many people as possible in case they ever have to use it.
Some people may never need an ambulance, a GP, a fire engine, a hospital, any other sort of centralised social support, but it is reasonably available to most people just in case they do ever need to use it.
For example, if we didn't have a centrally funded health care system, we would end up with a system like USA where only the very wealthy could afford healthcare and the less wealthy toss up whether to see a GP for a minor illness in case it ends up bankrupting them.
Agreed, it would capture tax from the black cash economy too (drug dealers / cash in hand transaction / etc)!!
No it wouldnt. Cash in hand wouldnt report the gst anyway
And what happens when the drug dealer buys a high yield mercedes and cavier?!? - hit with the GST …
Black money avoids income tax, but they certainly pay GST on purchases …
Income tax of 0% and GST of 20% would hit cash operators the most …
@7ekn00: yes some will be captured. but your good old chinese restaurant with the broken eftpos machine wont be declaring that GST on your fried frice or income tax
@Jaduqimon: I prefer to pay cash to small business operators regardless what ethnic background they are from.
I do not care if they declare it correctly or not.@Jaduqimon: But that nail bar, hairdressers etc will keep pushing black money back into the economy for the various parties to use for high yield BMW's etc…..
exactly, rich buy more things and the extra income the poor get from reduce tax offsets the gst
Not sure why you were negged at all, consumption tax is probably the hardest form of tax to avoid. Too much rich or international organisations have so many ways of avoiding tax, but they can't avoid GST.
Think of the highly successful IKEA. Hardly paid any tax here, but they can't avoid collecting GST.
Where is GST bad, it hits the poor as well as the rich, but you can adjust for that. You at the same time raising GST increase other allowances to balance out the hit to the poor. The rich on the other hand can skip taxes with trusts negative gearing or superannuation etc etc…but at some point when they spend their money(and of course they will) they can't avoid GST.*
*GST isn't on all products currently, so i guess they can, but I'm supportive of removing nearly all exemptions too, so the GST act isn't 20,000 pages long supporting armys of tax lawyers life sytles.
Super is only a good tax deduction for those on around 135K to 250K Once your adjusted income goes over 250K super contributions are taxed at 30%. That is unless you are a politician or judge then you are exempt.
Super is an excellent tax deduction below $135K too, or are you suggesting no free cash to invest?
30% also isn't too bad comparatively if you are earning > $250K.@SlickMick: The sweet spot is between 190 and around 235. Arguably under that you mat be better looking at other investment options.
@tomfool: I totally disagree. There is no other investment options only being taxed at 15% and no CGT. If you have free cash you can invest until retirement, there is no better place for it than super.
GST is and always was just a tax on "the poors"
very few things poor people buy attract GST
You're joking, right?
Yeah and pay less if you don't want to work hard.