Thanks for the well-thought out presentation, @rmoss. Very comprehensive. 

Re your GST recommendation, I’ve heard a similar suggestion espoused by Alan Kohler, taken from some NSW professor, all of which sounds entirely reasonable. However, upon cogitation, it struck me that my husband and I (being two adults and therefore entitled to a $1,500 x 2 pa rebate) spend way way less than either of my daughters, both of whom have 2 school-aged children. Yet each daughter and spouse would be entitled to only the same rebate as my husband and I. That strikes me as unfair - they are the ones bearing the costs of nurturing future generations of tax-payers. So shouldn’t the rebate be on adult+dependents?

Given how much children cost these days, that would seem much more appropriate.

ALSO, something I would dearly like to see is the other side of the equation - the allocation of tax revenue. I would like to see a proper BUDGET - income versus expenses. I think there needs to be more public/community discussion around what we, the Australian people, actually want to see - how much should go to e.g. pensions, unemployment benefits, school, childcare, healthcare, etc, etc vs administration and bureaucracy and, most importantly, Defence spending.

To me, the notion of spending X% of GDP on Defence is just crackers - it all depends on what you spend it on. Is your spending, at whatever level, efficient in terms of defending Australia? And what does defending Australia mean, taking into account that we are a huge island surrounded, in large part, by a massive amount of open ocean?

It seems to me that, at present, just as it was in the past, most of our Defense budget goes to the offensive side of the ledger and very little/much less to the defensive side. For instance, how much is spent on building and, it seems, constantly expanding the sort of army needed to fight in far-off lands versus how much is spent on designing and implementing the actual defense of the Australian land mass?

Just a few thoughts for a damp Sunday afternoon.

Thanks @rmoss for having a crack at a real tax reform agenda. If you gave that to me as a take-it-or-leave-it proposition, I’d happily take it.

I think there are a couple of omissions though, the biggest one being Trusts. If you implemented that full agenda you will effect some positive change. However, the biggest single change would be an explosion in the use of Trusts purely for tax minimisation. They’re a tricky beast to solve but ChatGPT gave me a start:

As for the rest:

Housing Reform

- Tick to the CGT and negative gearing reforms. Or you could halve the CGT discount and limit negative gearing to a single property. Or keep them just for new builds to encourage supply. The main thing is to do something!

- Tick to replacing stamp duty with land tax. I’d phase it in over a couple of decades and thereafter the tax would apply to all property whether sold or not.

- Tick to longer leases and abolishing FHOGs.

- Not sure about counter cyclical lending buffers. Isn’t that adding risk to the lendee at the exact time they should be reducing it?

Resource Royalties

- Tick

GST

- Tick. Alan Kohler has been spruiking a similar idea to make GST a progressive tax (not his idea as he acknowledges).

- I’d add broadening the base to this and include food, health, education, utilities and maybe rent (the latter being an ambit claim). I’d be happy to sweeten the rebate to get this through.

Social Security

- Tick

- I’d also include the Primary Place of Residence in the assets test, offset by an increase to the assets threshold.

Death Tax

- SIGN.ME.UP.

- Do we really need two tiers? Sounds like its adding complexity and might disincentivise desirable outcomes.

- The one omission I think you’ve made is a tax exemption for charitable giving.

- Need to have a solution for assets like farms etc. – limited use of trusts.

Income Tax

- Tick to reduced income tax and standard deductions

- I’m ambivalent to new tiers (adds complexity) and mandatory indexation (although it would be popular) but wouldn't die in the ditch over them.

- Do over 65s really need their own tax table? Are you trying to create an incentive for working longer? Maybe there are ways to do that, that are more targeted and without the complexity and perceived inequality of another tax table.

Corporate Tax

- I wish we could have a worldwide rate at 30-ish% but we live with what we’ve got not what we want.

- Given that I might go further and drop the rate to say 20-22%.

Super

- I think a progressive death tax actually solves a lot of the ‘problems’ with superannuation the government is trying to fix. It effectively makes death a realisation event for all assets and alleviates the need to tax unrealised gains.

- Your other points seem reasonable but become less urgent with a well-designed death tax.

- Tick to review of taper rates.

Other

- Tick to replacing petrol tax with a registration charge, although I’d probably prefer a hybrid model that includes a road user charge as well.

- Tick to NDIS reform – 11% of 6 year olds receive benefits! Note to self – review sale of KME.

- I suspect AI might make UBI a more urgent reform decision.

- Additionally I would also revive the franking credit refund removal policy. Grandfather it if you have to but it has never made sense to me why I can claim a refund for tax I never paid.

- And from ChatGPT:

Incidentally I chucked your assumptions into ChatGPT and it reckons they would increase the deficit by $17-21 billion! It’s the elimination of payroll tax that most hurts the bottom line. If you broaden the GST base to include what I’ve cited above (excluding rent but with no increase in the rebate), you end up around budget neutral. BUT, take all that with a grain of salt. I queried it on just one aspect of the calc – being the GST uplift to 15% - as I reckon it was $15-20 billion light. It kind of went to water trying to justify its original calc but conceded it was being very conservative.

Anyway, great work! I suspect we’ll see about 2% of this adopted.

I like you idea regarding dependants and yes the devil is in the detail of the design, from my perspective the starting point is recognising a broader and higher consumption tax is needed but we so is consideration of the impact on the most vulnerable. Totally with you on the spend side, very disheartening indeed at times

@Noddy74 I suspect 2% would be generous, thanks for your feedback, some good tinkering. I had pondered trusts and wondered whether it would be an oversimplification just to tax them the same as companies.

Nice one @rmoss -- would be great to see something like this as a central part of the national political debate. (not holding my breath though)

Let me also add a strong tick for a broad-based land tax to replace stamp duty.

It’s one of the few taxes that actually improves economic efficiency, because it pushes land toward its most productive use and discourages land banking. It targets wealth, not effort, and captures value that’s mostly created by the community (infrastructure, zoning, population growth) rather than the owner. Plus, it’s transparent, hard to avoid, and gives governments a stable revenue base.

Much fairer than slugging income or transactions. Total no-brainer.