The AFR argues that the Coalition's failure to pursue growth-enhancing tax reform has left it a political sitting duck for Labor's "fairness" agenda.
The opposition has unveiled plans to crackdown on people using trusts to avoid paying income tax.
The AFR argues that Bill Shorten's proposed tax crackdown on discretionary trusts again shows how the Coalition's failure to pursue growth-enhancing tax reform has left it a political sitting duck for Labor's "fairness" agenda.
The AFR says that there has been no marked worsening of inequality in Australia, nor economic precariousness over the past few decades and Australia's tax and transfer system is one of the most progressive and targeted in the world. Therefore, the problem is a lack of growth, not a worsening of inequality.
The paper points out that the fundamental problem here is that the government has vacated too much of the incentives and growth ground. For example, Mr Turnbull floated a couple of tax reforms such as a GST tax switch and state income taxes when he took the Liberal leadership. But, by early 2016, the Prime Minister took the GST policy option off the table.
It argues that genuine tax reform and public spending cuts are no doubt politically difficult, especially for a government resting on a one-seat majority. But the resulting policy vacuum is now being filled by Mr Shorten's inequality campaign.
The AFR says Labor's crackdown on trusts, like its other partial tax policies on negative gearing, superannuation and the capital gains tax discount, is not part of a wider, rational or productivity-enhancing tax reform package. Instead, it's an ad hoc tax grab to help plug a budget hole to pay for its big-spending monuments.
