Australia needs tax reform like a hungry man needs a feed and right now, the country is starving. According to Compare the Market’s Household Budget Barometer, Australians overwhelmingly believe tax reform is the single most important step toward easing the cost‑of‑living crisis.
It topped the list of solutions mentioned by survey respondents, outranking concerns like rent and even price gouging.
But meaningful reform requires a big‑picture approach. What’s the goal? To encourage Australians to work harder, earn more and grow the economy not punish them with bracket creep or a system that penalises effort. If policymakers want to revisit capital gains tax, they must also examine negative gearing and personal income tax. Reform must be holistic because incentives matter.
Right now, Australia leans far too heavily on income tax, a burden that falls disproportionately on young workers. It’s an outdated, lopsided system and it’s crying out for change.
A smarter approach would shift more of the load from income to consumption. That means adjusting the GST. If you want to live large, you should pay for it. Buy a modest Holden and you pay a modest GST. Choose a Rolls‑Royce and you pay a lot more as you should. It’s a fairer way to tax spending rather than punishing earnings.
Could the GST be targeted only at luxury goods? Probably not. The administrative chaos would outweigh the benefits.
That’s why critics say the GST can’t be increased. But imagine this: raise the GST to 12% across the board, and at the same time cut the top income tax rate to 30% while lifting the threshold to $250,000. Many Australians would say, “You beauty.” They’d keep more of their pay, think twice before splurging on luxury items, and feel rewarded not punished for working harder.
That’s what real tax reform looks like.
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