Martin Place, Sydney.
Australian households could gain an extra $4000 annually in their savings accounts – alongside higher incomes – with a significant reform of the tax system proposed by one of the country’s most esteemed economists.

Chris Murphy, who has crafted tax policy for the federal government and the Productivity Commission, released a research paper outlining reforms to land, corporate, and individual taxes.

Combined, the reforms would provide $43 billion in “consumer welfare”, effectively providing each household an extra $4000 a year.

Martin Place, Sydney.
Australian households would have an extra $4000 in the bank every year under a substantial overhaul of the tax system put forward by one of the nation’s most respected economists.(Alex Ellinghausen)
However, more substantial changes to the tax system – which economists say Australia desperately needs – are not likely to be handed down until far later this parliamentary term, if not taken to the 2028 federal election.

But Murphy said it was critical for the government to make a decision soon.

“Comprehensive tax reform stands out as a way of delivering large benefits compared to other areas of economic reform,” he wrote.

“To realize these substantial benefits, there must be an openness to altering the method of collecting $91 billion in tax revenue to cause less damage to consumer welfare.”

“As Theodore Roosevelt expressed: ‘In any moment of decision, the best course is to do the right thing, the next best is to do the wrong thing, and the worst is to do nothing’.”

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