Recent headlines have been dominated by the talk of tax reform, GST, possible changes in the budget, the winners and the losers.

Over the past few weeks I’ve had the privilege to attend a number of discussions on tax reform including one event attended by the Treasurer, Scott Morrison.

I believe comprehensive tax reform, must, at a minimum, pass the test of not further disadvantaging the most vulnerable Australians, particularly recipients of government support and other low income earners.

But tax reform is also an opportunity to improve growth and productivity, improve equity between taxpayers, and support the revenue base in order to maintain and enhance our social safety net.

It can help to address current critical challenges - in particular housing affordability, rising health costs driven by an ageing population, the need for more investment in education and declining revenues.

As an organisation we have a focus on reducing homelessness. Across Australia, but particularly in our big urban centres, we have a chronic shortage of housing for low and moderate income earners which is a key structural driver of homelessness. Current tax settings are part of this problem.

Sky-rocketing housing prices have an impact all the way down the line. People who previously would have purchased their homes now camp in the rental market, bidding up rents and displacing people on low incomes.

Finding an affordable place to rent is becoming a struggle with 42 per cent of low income renters spending more than 30 per cent of their income on rent1. That leads to what we call “rental stress” and puts people at risk of homelessness.

Improving housing affordability should be a major objective for any tax reform. In our pre-budget submission we have asked that all Federal and State tax settings which impact the housing market be assessed as part of the wider tax reform package.

We await, like many, the details of Scott Morrison’s tax reform package and hope that he uses it as a lever to increase growth and productivity for all.

Catherine Yeomans

 

Catherine Yeomans
CEO Mission Australia
@cathyeomans

 

 

1Productivity Commission, Report on Government Services, Table GA.5 pc.gov.au/research/ongoing/report-on-government-services/2016/housing-and-homelessness

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