The Abbott government must tackle taxation and labour market reforms, former prime minister John Howard says.
Australia must revisit tax and labour market reforms as part of the fiscal repair task, former prime minister John Howard says.
Mr Howard says Australia has “an inferior GST, to that of other countries”.
“I am in favour of returning fundamental tax reform,” he told a post-budget breakfast in Brisbane.
“Being a political realist and a very strong supporter of the present government, I understand statements, commitments that have been made.
“But there are two great areas of reform this country sooner or later must return to. I say return because we have drifted away from them. One is taxation reform and one is labour market reform.”
Mr Howard said the Abbott government was right to make people pay to see a doctor and work longer as the population ages and those measures will help ward off a budget crisis.
“If we hadn’t taken the corrective action we could well have faced a budget crisis soon,” he said.
“The government should be commended for tackling the mainframe, transmitting that the government is in control of an economic situation that if unaddressed will cause harm.”
But Mr Howard questioned cuts to family tax benefits he authored.
“I have the old-fashioned view that a couple on $120,000 a year with two children should not have to pay the same tax as a couple on $120,000 with no children,” he said.
“I still hold to the philosophical view that they aren’t welfare payments but, rather, they are tax breaks for the cost of having children.
“I think a taxation system, if it is to have some sort of dimension of social vision, should recognise that it costs a great deal of money to have children.”