The Conference Tax Debate


One of the big questions that faces the Labor Party in the lead up to National Conference is how the current tax-to-GDP ratio can deliver Labor's aspirations for the role of Government.

The Left moved an amendment on Sunday to the 'Our Economic Future' report that outlined how to meet Labor's aspirations for the role of Government, the revenue to GDP ratio may need to rise.

AMWU Secretary Tim Ayres moved the amendment and spoke about how Labor has much to be proud of. It delivered the world's best response to the GFC. Fiscal policy, however, became constrained by the Coalition's rhetoric and deficit. The Labor Government's commitment to return to surplus. Labor shifted from a visionary response to the GFC to a small government, small target model. It meant cuts in areas and cuts to public sector jobs and curtailing Labor's ambition for great social change.

There will be need to prosecute a mature and open way with a discussion about tax and government or else Labor will fall into a small government trap. The party cannot do a Labor program that the community needs if we cannot face up to it. If the party cannot do it, how will it be brave enough to discuss with the community about the size of government and the country that it needs.

ALP National President Jenny McAllister seconded the amendment. She spoke about how the community understands that Government plays an important role in empowering ordinary Australians. Labor Governments will face tough decisions but it is time to have courage to have a conversation about the community, not just about the services but what we are prepared to pay.

Fiscal discipline does not just mean curtailing spending. It means collecting enough revenue. Australia is one of the lowest taxing nations in the developed world. When a few percentage points, they make all the difference in funding programs we care about. Labor is not for debt or deficit but  for revenue. Labor is capable of making this argument and with confidence in the Australian population who deserve a mature conversation.

Doug Cameron followed and emphasised how it should not be a factional debate. Tax needs to be dealt with, a decent system is necessary. Those who can afford to pay should pay like Gina Rinehart and Glencore and he made a call for hypotheticated taxes

While the Right opposed the Left's amendment, they emphasised their agreement with our objectives. Chris Bowen agreed that we do need a tax-to-GDP ratio that funds our programme and Tony Burke emphasised how we want a Labor Government that is able to deliver services and income support.

The Left's amendment was lost but it marks the beginning of an important conversation on tax and the role of government that will need to occur in the lead up to National Conference in 2015.