Tax expert says without tax reform, young people will pay

Tax expert says without tax reform, young people will pay

The treasurer has dismissed calls for an increase in the GST to stop young Australians footing the bill for the coronavirus recovery.

The head of a tax policy think tank says the government should up the GST, introduce a land tax and reduce personal and corporate income tax rates.

Tax and Transfer Policy Institute head Robert Breunig told AAP the tax system took more from “economically active” Australians, while retirees paid less.

But Josh Frydenberg said the government had no plans to raise the GST.
“What we are focused on is growing the economy,” Mr Frydenberg told reporters in Canberra on Tuesday.

“Of course there will be a debt burden that will be left to pay in years to come.”

Professor Breunig says tax reform could halve the economic recovery from coronavirus from potentially 10 years to five.

“I think young people are going to pay pretty heavily for the pandemic and for the government response,” he said.

“So it’s either going to be higher taxes or less government services and those things are going to affect young people in the future.”

He warned Australia’s reliance on personal income and corporate taxes would see young people pay more of the recovery bill, which would cost taxpayers hundreds of billions.

“That would be fine if all of us had the same amount of assets and wealth,” he said.

“It would be fine if all of us were going to inherit an expensive house from our parents.”

Prof Breunig said most of the OECD had moved to higher taxes like GST or land taxes.

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