Personal tax system ripe for reform

Australian personal taxpayers overwhelmingly support the need for reform of the personal tax system according to a new survey conducted by the Australian School of Taxation (Atax) at The University of New South Wales.

Australian personal taxpayers overwhelmingly support the need for reform of the personal tax system according to a new survey conducted by the Australian School of Taxation (Atax) at The University of New South Wales.

The survey found that taxpayers regard the current system as unfair and overly complex and would even be prepared to forego some of the major concessions currently available, such as work related expenses and the preferential treatment of personal capital gains, in return for lower tax rates and increased simplicity across the board.

Surprisingly, over 70% of those surveyed also said that they would be willing to forego tax cuts in favour of increased social spending if the Federal budget was running at a surplus.

Nearly 4,000 individual taxpayers took part in the survey, which was conducted as part of a broader research project, funded by the Australian Research Council and CPA Australia, which is designed to identify a sustainable personal income tax model for the future.

Professor Chris Evans, leader of the Atax research, said he was surprised at the extent of the support for personal tax reform. "There is a natural resistance to change, and people would normally have to feel very strongly about a topic before they wholeheartedly endorse reform. But we found that two out of three respondents considered that personal tax reform was an issue that would influence their vote at the upcoming Federal election."

A parallel survey of the attitudes to personal tax reform of over 3,000 tax practitioners identified overall support for reform but some resistance to changes such as the elimination of work related expenses, even if accompanied by lower tax rates.

Paul Drum, the Director of Policy and Research of CPA Australia, the industry partner in the research project, said he fully understood the wariness of members to commit to such changes. "Many tax agents will naturally feel threatened if much of their bread and butter work were to disappear as a result of tax simplification. It is important that we recognise these concerns and ensure they are properly addressed in any reform package that may emerge."

The research outcomes will be presented at a Personal Income Tax Reform Symposium being organised by Atax and held at UNSW on Monday 2 and Tuesday 3 April 2007, which will also involve presentation of papers by thirteen other Australian and international personal income tax specialists.

MEDIA CONTACT: Professor Chris Evans, Atax, cc.evans@unsw.edu.au, 02 9385 9546 or 0430 206 063

CPA Australia media contact: Michelle Mueller, (03) 9606 9965, 0419 394 375 or michelle.mueller@cpaaustralia.com.au
UNSW media office: Victoria Collins, 0412 980 044 or v.collins@unsw.edu.au