ISCOVER
Ahead of the government’s roundtable later this month, the industry body has pressed Treasurer Jim Chalmers to make tax reforms.
The Mortgage and Finance Association of Australia (MFAA) has called on the federal government to carry out a range of tax reforms, including raising the GST and broadening its base, abolishing stamp duty and payroll taxes, and making the instant asset write-off scheme permanent.
These recommendations come as part of the industry body’s submission to the Economic Reform Roundtable, which aims to improve productivity, economic resilience, and budget sustainability.
The roundtable will be hosted by the Treasurer and held at Parliament House in Canberra from 19–21 August.
The MFAA submission contains the following proposals:
- Reform GST to grow revenue – increase the GST rate to 15 per cent and broaden its base to include exempt goods and services, such as fresh food, health, and education, to generate greater revenues.
- Incentivise states to abolish inefficient taxes – remove stamp duty to stimulate turnover of housing stock and provide support to housing sector-related businesses.
- Reform payroll tax as a priority – modernising and harmonising the regime is a necessary first step, but longer term, the best outcome for economic growth and jobs would be its complete removal, according to the MFAA.
- Introduce permanency to the instant asset write-off scheme, so businesses can plan and execute on capital investments to grow their business.
MFAA CEO Anja Pannek said the body’s submission was informed by the experiences of its members.
“Our broker members see the direct effects of constrained housing supply, inefficient taxes and policy settings. These result in placing barriers around financial mobility, productivity growth and participation in the economy,” Pannek said.
In its submission, the MFAA also pointed out that a more productive economy requires a housing market that enables people to move for work, rightsize their homes, and build financial security through property.
“A more productive economy should also encourage small and medium sized businesses to invest, grow and innovate,” the submission stated.
Westpac flags housing supply issues
Earlier this week, Westpac also submitted recommendations to the roundtable, addressing issues like housing, supporting regional Australia, and tax reform.
The major bank called for the government to build more homes by speeding up development approvals and deferring upfront development costs.
It also recommended identifying up to 10 cities in regional Australia to drive a regional investment and growth resurgence.
Like the MFAA, Westpac urged the government to deliver “fair and practical tax reform”, including prioritising targeted changes to the tax system.
Housing tops roundtable agenda
Focused on ‘building consensus on long-term economic reform’, the Treasurer’s Economic Reform Roundtable will hear from invited experts on economic policy; leaders with industry and policy experience; and representatives from regulators, the public sector, and the states.
High-profile invitees include Matt Comyn, CEO of Commonwealth Bank of Australia (CBA).
Earlier this month, the major lender urged the government to consider policy reforms to address housing affordability, warning the problem was “arguably the most immediate economic policy issue” for younger Australians and those on lower incomes.
The recommendation was part of CBA’s submission to the Productivity Commission’s five inquiries on boosting Australia’s productivity, which will inform the roundtable, but is separate from the upcoming roundtable.
Invitees from the business and property sectors include Sue Lloyd‑Hurwitz, chair of the National Housing Supply and Affordability Council, and Matthew Addison, chair of the Council of Small Business Organisations of Australia.
More invitations will be issued for participants to attend specific sessions as the agenda takes shape.
[Related: HIA demands ‘urgent action’ on housing at Treasurer’s roundtable]
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