Former Treasury Secretary Slams Australian Tax System, Citing 'Deliberate Negligence'
Former Treasury secretary Ken Henry has criticized Australia's tax system, stating it contains deficiencies and exhibits "deliberate negligence." He indicated that the system incentivizes high-income earners to seek "creative ways" to lower their tax liabilities. Henry made these remarks while providing evidence to a Senate inquiry focused on capital gains tax, noting the system's ongoing struggles due to minimal recent reforms.
Recommendations for Top Marginal Tax Rate
Henry suggested that the top marginal tax rate, which was reduced from 60 percent to 45 percent by past Hawke and Howard governments, should ideally be further reduced to a rate starting with a "3" today.
Rental Property Investments as Tax Shelters
He also commented on the current tax structure, including capital gains tax and negative gearing, asserting that it effectively positions investment in the rental market as a means of tax avoidance.
"Rental property investments are primarily under Australian tax law a vehicle for sheltering wage and salary income from tax," Henry explicitly stated.