Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
Almost two-thirds of medium-sized companies are concerned economic activity faces a significant decline, resulting in even higher unemployment, when the federal government unwinds its COVID-19 stimulus measures.
As Treasurer Josh Frydenberg puts together his delayed 2020/21 federal budget for October 6, a KPMG Enterprise survey found over half of private, mid-sized firms and family businesses have benefited from measures like JobKeeper.
Increasing the GST and raised productivity to drive revenue growth were considered the two measures that would be most effective to help reduce government debt, scoring 41 per cent and 40 per cent respectively.
‘Interestingly, raising GST was the only tax-raising measure considered an effective option for the government,” KPMG Enterprise national tax leader Clive Bird said.
“Previous KPMG modelling has shown that overall economic welfare is improved if the GST base is expanded, even if the rate is kept at 10 per cent and other ‘inefficient taxes’, like insurance taxes and stamp duties on motor vehicles, are abolished.”
Per Capita’s annual tax survey found almost two-thirds of respondents want to see JobSeeker increased by at least $75 per week.
Nearly a quarter believe the dole payment should remain at least at the increased rate provided through the coronavirus supplement of $275 a week.
Just over half thought negative gearing should be restricted or abolished, while 57 per cent said there should be a cap on tax reductions for high income earners.
Modelling conducted by the Australia Institute found men on high incomes would be the main beneficiaries if already-legislated tax cuts are brought forward as flagged by the federal government.
The study found if the tax cuts scheduled from 2022/23 are introduced earlier, for every dollar of tax cut that women would get, men would get $2.28.
If at the same time tax cuts planned from 2024/25 are also brought forward, men would get $2.19 for every dollar a woman would get.
Previous modelling by the institute showed higher earners would benefit more from these tax cuts, and are more likely to save the benefit than spend it.
“Giving tax cuts to the wealthy will have a very limited stimulatory effect on the broader economy, but it will significantly widen the economic divide that already exists between men and women in this country,” the institute’s senior economist Matt Grudnoff said.
There are several changes due in the 2022/23 tax cuts, including an increase in the threshold of the 32.5 cent bracket from $37,000 to $45,000 and the threshold of the 37 cent bracket from $90,000 to $120,000.
In 2024/25, the tax cuts reduce the 32.5 cent rate to 30 cents.
The Per Capita survey found just 13 per cent of voters think the distribution of the final stage of these cuts is about right.