Statement from the office of Independent Member for Wentworth, Allegra Spender MP:
Allegra Spender has set out a plan to rebalance Australia’s personal tax system so that Australians have a meaningful opportunity to get ahead through their own hard work.
Today she will launch her Personal Tax White Paper at the National Press Club, the first in a series of white papers she will release over the next few months.
“Our tax system needs rebalancing to deliver reward for effort, to encourage productivity, and ensure that taxpayers aren’t facing the heaviest burden when they can least afford to pay.
“We haven’t had substantial tax reform for 25 years and the current system is no longer fit for purpose,” Ms Spender said.
“Consider someone earning $100,000 a year – just over the median wage. Earned as a salary you pay $23,000 in tax, split through a family trust you pay $13,000, earn it as capital gain you pay $7,000, and earn it from your super balance in retirement, you pay no tax at all.”
“Does it really make sense that the tax burden falls most heavily on younger people struggling to get established – who are likely also paying rent, saving for a deposit, raising children, and paying down HELP debts?
“The current tax system is exacerbating intergenerational inequity. Our tax system setting needs to be rebalanced towards effort and ingenuity,” she said.
“That will not only assist younger Australians, it will also improve productivity and address the long-term demographic challenges facing our tax system.
“Any tax measures the Government takes should be revenue neutral and put money back in the pockets of people trying to get ahead.”
Ms Spender said Australia faces a demographic challenge, with fewer working-age Australians supporting a growing older population.
“In the 1980s there were about six working-age Australians for every person over 65. Today there are fewer than four, and within a generation it will be fewer than three,” she said.
“We cannot continue funding rising spending on health and aged care by placing a heavier burden on younger workers.”
“We cannot rely on fantasy tax reform where politicians promise tax cuts without showing how they will fund them. Every dollar returned to working Australians through my proposed income tax cuts is raised by reducing concessions on investment income,” she said.
Ms Spender said the coming budget represents the best opportunity in a generation to rebalance the tax system and restore what she calls “the Australian covenant” — the promise that hard work leads to a decent life.
The White Paper has been costed by the Parliamentary Budget Office and is budget neutral, with tax cuts fully funded by tax increases. It would deliver income tax cuts for workers by reducing the lowest marginal tax rate on wages to 13 per cent and cutting all other marginal rates by 2.5 percentage points.
Someone earning $100,000 would receive more than $1,640 per year in tax relief. Someone earning $200,000 would receive about $4,000 per year.
These tax cuts would be funded through four changes to investment concessions:
- Reducing the capital gains tax discount from 50 per cent to 30 per cent on future gains.
- Ring-fencing negative gearing so investment losses can only be offset against investment income, not wages and salaries.
- Introducing a minimum tax rate of 27.5 per cent on investment income to reduce incentives for income splitting.
- Aligning superannuation earnings thresholds more closely with income tax thresholds to create a more stable and principled system.
Ms Spender said the reforms are designed with transition arrangements to protect people who made decisions under existing rules.
- Capital gains changes would apply only to future gains.
- Negative gearing changes would be phased in over five to ten years.
- Superannuation changes would include a 10 year transition period and flexibility for high-balance accounts.
Ms Spender said tax reform has been avoided for decades but Australians understand the need for fairness.
“Many people have told me these reforms might mean they personally pay more tax — but they still support them because they are right for the country,” she said.
“When Australians see that a nurse and a property investor on the same income can pay very different amounts of tax, they understand something isn’t right.”
Ms Spender warned that growing frustration among younger Australians risks eroding trust in institutions and fuelling populist politics.
“When people feel the system is not on their side, they stop believing in the system altogether,” she said.
Comments (4)
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Angus
Wed, 11.03.26
15.51 AEDT
“We need to go hyper” Canavan continues: The good news is we have everything we need to solve the problems in front of us right now are here in this country. Everything we need... The Point Live
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Andrew Faith
Wed, 11.03.26
11.27 AEDT
“We need to go hyper” Canavan continues: The good news is we have everything we need to solve the problems in front of us right now are here in this country. Everything we need... The Point Live
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Andrew Faith
Wed, 11.03.26
10.53 AEDT
Canavan elected Nats leader More to come The Point Live
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Robert Howard
Wed, 11.03.26
08.39 AEDT
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it's not big Australia, it's hyper-giga-mega Australia
"Everything we need to make Australia the country it was in the past…"
That's the headline. The past, not the future.
Well, THAT'S going to work well for them, isn't it?
Bridget McKenzie, wow, that would mean she becomes the Deputy PM, (if successful) and PM on the occasions the actual PM is overseas.