18th Feb - My Four Priorities for a Stronger, Smarter Economy. - Allegra Spender

Hi Allegra,

There’s welcome news today with the RBA announcing it will cut the cash rate by 0.25 percentage points. I know this will provide some much-needed relief for households and businesses struggling with the costs of a mortgage or a loan.

Whilst inflation is slowing and interest rates are now falling, our economy is still stuck in a rut. Young people are falling behind, we have generationally low productivity, businesses aren’t investing like they used to, and there are budget deficits as far as the eye can see.

These problems have built over decades and under governments of all stripes. Major economic reform is needed but neither Labor nor the Coalition have a plan that can meet these challenges and have been too afraid to address some of the really tricky issues. As a crossbencher, I have the freedom to speak up on these challenges and challenge both parties to have the courage to address real economic reform.

I want to build a smarter economy, that helps Australian start-ups get ahead and stops young people from falling behind. That’s why I’m focused on four key priorities:

Tax reform that lowers income taxes and boosts business productivity.
Making Australia the best place to start and grow a business.
Smarter spending of your taxes.
Getting back to honest and responsible federal budgets.

Last week in parliament, I introduced my Better Value for Taxpayers Bill, to make sure that billions of dollars of infrastructure spending goes to the projects that make the biggest difference to the economy, not to a major party.

With both sides of politics running around the country making billions of dollars in election promises, my Bill would ensure that taxpayer money is spent properly. It would put proper guardrails around more than $10 billion in annual infrastructure spending, by requiring proper business cases, strategic planning, and post-project reviews.

Watch my speech and read the media release.

This email outlines my priorities for economic reform. Future emails will include my plans for bringing down energy bills and climate action, lowering living costs, fostering a kinder community and restoring integrity in politics.

Join me at the launch of my 2025 campaign!

If you're interested to hear more about my economic priorities as well as my other policy pillars - come to the campaign launch. It is next Thursday the 27th from 6:30pm at Centennial Park Homestead. RSVP below.

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1. Tax reform to lower income taxes and boost productivity.

Tax is a topic that has been politicised so badly that the major parties won't touch but is an issue too important to ignore.

So over the last 18 months, I’ve consulted extensively across experts, stakeholders, and people in Wentworth to develop my Tax Reform Green Paper. This is the first time a non-government MP has ever done a Green Paper.

The paper sets out the 3 big challenges that tax reform should address - helping young people get ahead, driving business innovation and growth, and supporting the energy transition. It then covers different ideas that experts and stakeholders have suggested in trying to face these challenges and the process we need for reform in the next parliament.

The paper sets out six reform priorities:

Lower income taxes on working Australians so they can earn and get ahead;
Rebalance tax settings in favour of home ownership;
Boost productivity and growth through incentives for innovation and business investment;
Stabilise our revenue base so that it can endure changes to demographics and consumption patterns
Support the energy transition through better tax settings; and
Implement institutional reform, including a Tax Reform Commission, so we can better manage future challenges as they develop.

Australia currently has one of the highest tax burdens in its history and is more reliant on income taxes, relative to our peers.

As a minimum aspiration, we therefore need to achieve the above priorities in a revenue-neutral way, but I believe we should try to lower the overall burden of tax if we can.

A process for real tax reform will be one of my top priorities in the next parliament.

2. Make Australia the best place to start and grow a business.

I’m proud to have stood up for start-ups and small businesses during this term of parliament, securing important carve-outs from new industrial relations laws and successfully stopping the taxation of unrealised gains on superannuation that would hurt high growth businesses.

But we need to do more to make it easier for businesses to employ people, make it easier for them to raise funds, and make government better at buying from young and innovative Australian businesses.

Make it easier to employ people, starting by:

Raising the threshold for defining a “small business” from 15 to at least 25 employees. This would right-size regulation for over 46,000 businesses, letting them focus on their customers and supporting their employees, rather than wading through red tape.
Having the Productivity Commission review Australia’s workplace relations system, with a view to make industrial awards simpler and modernise the Fair Work Act.

Focusing government on making things simpler for business:

Adopt a “Service NSW” customer focus in every government department that works with business to reduce wait times for business and simplify processes
Hold regulators accountable for right-sizing regulation to make sure that regulation is achieving its outcomes, not just adding complexity

Make it easier to raise funds, starting by:

Changing the ‘Your Future, Your Super’ regulations to make it easier for small businesses to tap capital, without risking retirement savings.

Better procurement for young, innovative Australian businesses, starting by:

Excluding ‘slow payers’ from government contracts by cracking down on large businesses who don’t pay their suppliers on time.
Making government a better customer for innovators, awarding at least 30% of its contracts to small or young firms.

3. Smarter spending of your taxes.

The government has been keen to take the credit for two large surpluses, but the fact is that the Budget is in structural deficit and will be for years. Neither side has a plan to deal with this.

Two things people tell me irk them most are blown-out infrastructure bills and grants awarded based on politics, rather than to those that deserve them. That’s why I want to:

Improve infrastructure spending through my Better Value for Taxpayers Bill
Pass the Ending Pork Barrelling Bill 2024, put forward by Dr. Helen Haines MP and the Centre for Public Integrity

4. Get us back to honest and responsible budgeting.

Budgets are supposed to represent the blueprint for Australia’s future. Instead, they are often cynically used by the major parties to buy votes and increase their chances of re-election.

The Charter of Budget Honesty 1998 introduced safeguards to mitigate this kind of short-sighted behaviour. But for the past 15 years, governments of both stripes have chosen to abandon certain disciplines, in particular, the requirement to include a credible long-term fiscal strategy.

We need to reinvigorate these safeguards and drive better accountability of government spending.

We can’t keep doing policy on the fly and leaving our children and grandchildren to pick up the tab. We need better spending informed by a longer-term vision.