Australia Institute Budget Wrap 2021

The budget has failed to deliver any meaningful tax reform. 21 years into the 21st century we still have a tax system that looks more at home in the 19th century.

There is one thing you can say about Treasurer Josh Frydenberg’s third budget: it’s not all bad.

Gone is the debt and deficit bogeyman and there is some welcome new, albeit insufficient, resources being put into aged care, childcare and mental health.

Some other small measures were welcome: at last some money for an FOI commisioner and the expansion of the Pension Loan Scheme, as advocated by the Australia Institute.

But the big thing missing was tax reform.

To set Australia up for the future and build a stronger government capable of tackling the challenges of our age we need a stronger and fairer revenue base. Instead we got the band-aid extension of the Low and Middle Income Earner Tax Offset (LMITO) and further business incentives.

Too many tax reforms have been taken off the political table. Resource tax reform, wealth tax reform, property tax reform and carbon pricing have been put in the ‘too hard’ basket.

A fairer and simpler tax system would wind back tax concessions; tackle inequities; ensure public goods are supported; discourage polluting and destructive activities; and collect more revenue more fairly.

On any of these measure the budget has failed.


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