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Our tax system ‘looks like 1950’s’

Top bureaucrat Martin Parkinson admits the security breach makes the Department of Prime Minister a laughingstock.

Top bureaucrat Martin Parkinson admits the security breach makes the Department of Prime Minister a laughingstock.

Australian living standards are slipping, the tax system resembles the 1950s and an “adult” debate over tax reform is needed, Australia’s next top public servant has said.

Martin Parkinson, the incoming secretary of the Department of Prime Minister and Cabinet, told a business lunch in Sydney the tax system was still heavily reliant on income and corporate taxes.

“Our tax system today looks remarkably like it did in 1950/51,” Dr Parkinson said.

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Tax reform will be high on the Council of Australian Governments (COAG) agenda on Friday, including a proposal to raise the GST to 15 per cent to cover a shortfall in Federal health and education funding to the states.

Dr Parkinson told the McKell Institute function in Sydney that tax reform was needed to maintain living standards.

“Living standards have already started to fall, you can see that in the national accounts,” he said.

“The falls are small, so most people haven’t really recognised it yet.”

The former federal treasury secretary said in order to gain support for tax reform, politicians would need to treat the public “as adults” and explain the case for change.

“All of us have to be better at explaining the ‘why’ which really comes down to what kind of Australia do we want to have?” Dr Parkinson said.

“Do we want to have high growth, high-quality jobs … services that our citizenry expect … and the capacity for safety nets to ensure we’re protecting the truly needy in our economy?”

Dr Parkinson said his comments should not be interpreted as an “insight into Government thinking” because he accepted the invitation to speak before being appointed to his new role.

– ABC

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