Mathias Cormann, secretary-general of the OECD and a former Liberal finance minister, has warned that mainstream parties should not adopt populist economics. Speaking to the Centre for Independent Studies, he said the grievances behind populism, including falling real incomes and housing access, were real. He argued that tariffs, migration caps and state intervention were not the answer. Cormann also set out a reform agenda covering tax reform, including a GST overhaul, and the use of artificial intelligence to lift productivity.
The NSW Liberal and National parties have proposed changes to payroll tax law they say could ease costs for small and family businesses. Their plan would lift the payroll tax threshold from $1.2 million to $1.5 million and cut the rate from 5.45 per cent to 4.75 per cent for firms with Australian payroll below $10 million. It would also index thresholds to inflation. Shadow minister Gurmesh Singh urged Labor to back the legislation, while shadow treasurer Scott Farlow said the reforms would make NSW more competitive for jobs and investment.
The Grattan Institute has proposed lifting the Goods and Services Tax from 10 to 15 per cent and applying it to food, which it estimates would raise about $76 billion a year. The think tank says $58 billion of that should cut income taxes for low and middle earners and boost welfare payments, with the remainder going to the states. Its modelling suggests lower-income households and welfare recipients would be better off, while high-income earners would pay more.
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State budgets face significant challenges, with debt doubling since 2019 and rising interest costs. The GST, intended to provide stable revenue, now contributes less to state coffers. A Grattan Institute report proposes increasing the GST rate to 15% and expanding its base to include all food, with revenue used for income tax cuts and welfare increases. This approach aims to ease the tax burden on lower-income households while improving state fiscal health. The reform could also address inequities in GST revenue distribution among states.
The Grattan Institute proposes raising the Goods and Services Tax from 10 to 15 per cent to tackle mounting government debt. The think tank says the increase could raise about $76 billion a year, with $58 billion used to cut income taxes and boost welfare payments. Prime Minister Anthony Albanese said Labor had not considered a GST increase. A separate study by e61–UNSW Policy Research Partnership found the GST may be less regressive than commonly thought when spending is measured over a longer period.
A think tank has urged the federal government to raise the GST from 10 to 15 per cent and remove the exemption for grocery staples, to help pay down national debt. The Grattan Institute says the change would raise $76 billion a year, funding tax cuts for lower and middle-income earners and higher welfare payments. Its report also calls for scrapping the 2018 GST deal benefiting Western Australia, which the institute says would save $6 billion a year.
Small businesses will have to pay thousands of dollars to comply with upcoming tax changes, Assistant Treasurer Daniel Mulino has conceded. Laws introduced to parliament on Wednesday set a 30 per cent minimum tax on trusts. Business groups argue trusts are used for legitimate reasons, such as protecting assets. Mulino said the cost would depend on each business's arrangements and estimated about 800,000 discretionary trusts exist. Labor needs support from the coalition or the Greens to pass the bill, and the coalition has signalled strong opposition.
Treasurer Jim Chalmers has introduced a bill that would impose a 30 per cent minimum tax on discretionary trusts from July 2028. The aim is to discourage the use of trusts to reduce taxable income. Associate Professor Dale Boccabella says the current system is bordering on a joke and needs reform. The Housing Industry Association warns that businesses may face costs of $10,000 to $25,000 for advice on the changes. The Australian Council of Social Services welcomed the reforms, saying the current system is being exploited.
Former treasurer Josh Frydenberg has called for a national debate on lifting the GST and removing some exemptions. Opposition leader Angus Taylor rejected the idea, saying the Coalition will not raise the GST or taxes during a cost-of-living crisis. Treasurer Jim Chalmers is facing his own difficulties, with Labor planning a 30 per cent minimum tax on discretionary trusts. Prime Minister Anthony Albanese and Chalmers have publicly disagreed over a Tax Office decision to ban credit card payments, which has angered small business.
The Albanese government has introduced legislation in parliament that would place a minimum 30 per cent tax on income received from discretionary trusts. Treasury estimates the measure will raise $4.5 billion in 2029-30, its first year of operation. Discretionary trusts let income from assets such as businesses, property or shares be split among beneficiaries, often family members, usually on lower tax rates. Affected people and small businesses argue restructuring will be costly, and the Australian Chamber of Commerce and Industry opposes the reforms.
The Coalition and the Greens both want the Albanese government's new tax on discretionary trusts put before a Senate inquiry. Treasurer Jim Chalmers introduced the legislation, which sets a 30 per cent minimum tax paid by trustees on net taxable income, with several exemptions. The government says the reform targets wealthy Australians using trusts to reduce tax. The Coalition says the tax would hurt small businesses and has pledged to axe it if elected. The Greens argue the reforms do not go far enough. The Australian Chamber of Commerce and Industry urged parliament to vote the legislation down.
Opposition Senate Leader Michaelia Cash has attacked Labor's proposed 30 per cent minimum tax on discretionary trusts, warning small businesses could face large restructuring costs. The tax would apply to the taxable income of discretionary trusts from July 1, 2028. The government says the changes will make the system fairer and help fund income tax cuts for workers. Government figures say more than 90 per cent of small businesses will be unaffected, and three years of rollover relief is proposed from July 2027.
Treasurer Jim Chalmers has introduced legislation to change the tax treatment of discretionary trusts, arguing they allow some wealthy people to manage their tax in ways most workers cannot. The government needs Greens support to pass the bill and is unlikely to see it passed before late 2026, as the Greens push for a Senate inquiry. Business groups say trusts have legitimate uses, while opposition leader Angus Taylor and Liberal senator Michaelia Cash say the changes would hit small businesses. Chalmers has suggested fewer than 10 per cent of small businesses would be affected.
The Greens will seek a Senate inquiry into Labor's proposed tax on discretionary trusts after the government offered small firms a way to avoid it. Greens economics spokesman Nick McKim said the carve-out could let people with trusts off too lightly. Treasurer Jim Chalmers is due to introduce the legislation, but it is now unlikely to pass before late 2026. Business groups estimate compliance costs could reach billions of dollars, and say trusts are used for legitimate reasons. Chalmers has argued the structures let some wealthy Australians plan their tax affairs in ways most workers cannot.
