By Chris James
According to The Age Online:
“Federal Treasury boss Ken Henry has dashed expectations that his review of the tax system will pave the way for lower tax, declaring that over time Australians will have to pay more.
“Addressing a conference in Sydney, Dr Henry said Australia’s tax system had to be prepared for the probability that, as the population ages, government revenue needs ”will grow strongly in the longer term”.”
Perhaps this Review should be called the Henry Higher Taxation Review. Most contemplation by Henry has been of new or higher taxes, and there has been no focus on reducing size of government.
[...] Chris James: “We have not heard much about less or more efficient taxation leading up to this process. Let’s just hope it is not the “Henry Higher Taxation Review”. [...]
The current participation rate of 65.4% will drop dramatically as the remaining 3.5 million baby boomers move to retirement over the next 15 years unless appropriate incentives are provided to retain older workers in the workforce for longer.
There must be a mix of incentives for individuals to remain working through options such as tax breaks as well as encouragement to boost retirement incomes.
Encouragement for employers to adapt to new sustainable processes, develop innovative technologies and boost existing worker skills will also be required to dramatically improve productivity if there is a downward trend in participation rates.