Bill Shorten has raised the prospect of changes to capital gains and fringe benefits tax as Labor attempts to win the upper hand in the economic debate on fairness.
The opposition leader on Friday delivered an address to the Social and Economic Outlook conference in Melbourne, focusing on inequality and its ramifications.
“We have taxpayers in the top personal income tax bracket account for 2.7% of the total number of taxpayers. But they also account for 55% of the total capital gains income,” Shorten said. “They accounted for 12% of total income, from reportable fringe benefits. They are able to avail [themselves] of a system where they’re 2.5 times more likely to be able to claim tax concessions than other income earners.”
When asked if changes to fringe benefits and capital gains were on the table, the opposition leader said: “In the Turnbullian vibe that we have in this country, we want to look at issues”.
“I know therefore you will give us a lot of room to look at issues without immediately launching a scare campaign on what I’ve said,” he told reporters.
Labor in April announced its policy of winding back tax concessions for wealthy retirees. Shorten said it was a matter of equity.
“What are we doing when we give tax concessions to people who already have millions of dollars in superannuation? Why is it that you could have $5m in super and the interest you earn from it, the income stream, is tax free,” he asked. “I’m just putting squarely that fairness is a good driver of economic growth and making sure that we’ve got good distributive mechanisms which achieve fairness actually have an efficient economic outcome, too.”
The prime minister, Malcolm Turnbull, has used fairness as the benchmark for future economic reforms, saying changes will work off the principle of “no disadvantage”.
“Fair is obviously in the eye of the beholder but fair, I think, for Australians, means that the burden of tax is best borne by those able to pay it,” the prime minister said on Thursday.
Shorten used the debate on raising the GST and broadening it to include fresh fruit and vegetables, to question its impact on low income earners.
“Whether it’s increasing the rate or broadening the base, the outcome is the same. Australia’s lowest income households will bear the brunt,” he said. “If increasing the GST is just a disguise for making working people pay more for nearly everything, then Malcolm Turnbull’s idea of fairness will turn out to be a nightmare for everyday Australians.”
Labor was willing to have a discussion about broad-ranging tax reform, Shorten said, but “would not support increasing a regressive GST that inflicts the heaviest punishment upon those least able to afford it”.
“Let’s be really clear, jacking up the GST to 15% is not innovative, not agile, nor creative,” he said, using Turnbull’s favoured descriptors for economic progress.
Turnbull has indicated that all reforms, including increasing and broadening the base of the GST, are on the table.
But the government said individual tax measures should not be taken in isolation, but rather viewed as part of an overarching economic package.
“We can’t deal with tax reform piece by piece. You’ve got to look at the totality. You’ve got to have everything on the table,” the trade minister, Andrew Robb, told reporters on Friday. “One thing is not going to solve all of the problems, it’s what you do across the board.”
