ACOSS is urging governments to "get real" about tax reform to raise more revenue, as the Intergenerational Report forecasts a rise in spending on essential services and social safety nets to meet community needs over coming decades.
The federal government must raise the revenue required by strengthening the progressive tax system.
ACOSS is calling on the government to:
Introduce a 15 per cent levy on post-retirement superannuation earnings to help fund quality aged care services for all
Introduce a 10 per cent Commonwealth royalty on offshore gas resources and abolish fuel tax credits for off-road use, except for agriculture to fund the energy transition
Reform negative gearing and reduce the capital gains tax discount to invest in housing
Prevent avoidance of the Medicare Levy and extend the high-income Medicare Levy Surcharge to all individuals to help fund essential healthcare
Abolish Stage Three Tax Cuts to fund poverty reduction measures
"With the inevitable pressure on current and future budgets to provide the health and care services we need, respond to climate change, and lift people out of poverty, the government and all stakeholders must 'get real' on tax reform," said ACOSS CEO Cassandra Goldie.
"As the population ages, we will inevitably spend more on health and care services. The choices are clear – either raise the public revenue to fund decent services for all, ramp up user charges, or leave people to fend for themselves.
"User charges for essential services are unfair. Those with the money get decent care, the rest end up with substandard care.
"Australia can't afford to forego $20 billion a year for high-end tax cuts, or lower the company tax rate.
"We must close the loopholes and shelters that allow people and businesses who have the ability to pay to avoid their obligations. Superannuation, capital gains tax, private trusts, and mining resource taxes must return to the tax reform agenda.
"Tax reforms should be linked to expenditures on the services we need."
Currently, super investment earnings are taxed at 15 per cent while a person is working but are not taxed when a person is retired.
"To help fund a universal, quality aged care system, a 15 per cent aged care levy should apply to the investment income of superannuation funds after retirement, such as interest and capital gains on a fund's investments, rather than retirement benefits," said Dr Goldie.
"The government must confront the twin challenges of growing needs for services and a leaky tax base. We have an opportunity to bring the community on board with an agenda that joins the two together.
"The government must also lift woefully inadequate income support payments to $76 a day to reduce poverty and help alleviate the growing costs of the health system."
