A new tax cut proposed by Pauline Hanson and One Nation aims to assist Australian couples with children by allowing them to split their income for tax purposes. This would enable couples to lessen their combined tax liability by ensuring more of their earnings fall under the tax-free threshold and lower tax brackets. However, while the proposal suggests potential savings for some families, critics argue that it could exacerbate existing inequalities in the taxation system, primarily benefiting higher earners and discouraging workforce participation, particularly among women.
Experts, including economist Greg Jericho, contend that Australia needs comprehensive tax reform rather than selective tax cuts. Jericho asserts that the current tax framework fails to address disparities, particularly concerning superannuation and capital gains benefits that favour the wealthiest. He also highlights Australia’s relatively low tax-to-GDP ratio compared to other developed nations.
Despite the pressing need for reform, tangible changes appear unlikely in the immediate future. Nonetheless, Jericho suggests that advocating for the reduction of tax concessions for the affluent could gain political traction, particularly if it enables the funding of essential services like dental care within Medicare. The call for courageous political action to address these issues resonates strongly within the current economic discourse.