Young Australians are working hard, but the system is making it harder for them to build financial security.

At present, income from work is often taxed more heavily than income from assets. This disadvantages those starting out, who rely primarily on wages, while benefiting those who already hold assets.

My proposal rebalances this by significantly reducing taxes on working income and aligning concessions on income from assets so that they are taxed more consistently and fairly.

This helps restore a system where effort is rewarded and gives younger Australians a better opportunity to build wealth and get ahead. This proposal is not perfect, and will not solve all of our problems but it will make a meaningful impact.

Under my proposal, people with super balances between $1 million and $3 million would see modest changes introduced gradually over around a decade-long transition period. Those with larger balances would also have a one-off opportunity to reposition their savings before new settings fully apply.

Importantly, super will still be concessionally taxed compared to investments outside super. The goal is not to undermine superannuation - it’s to ensure the system remains sustainable, stable and focused on its core purpose: funding a dignified retirement.

Once fully implemented, the proposal would involve fairly modest contributions from those earning income from balances over $1million.

Let’s say you have $1.2 million in retirement phase superannuation, earning about $72,000 per year on that balance.  You would move from paying no tax on those earnings to about $1,800, compared to about $14,000 in tax if it was money earnt through wages.

If you have $1.7 million, earning about $100,000, you would pay about $6,000 under this proposal. If you were earning this through labour income, you would pay about $23,000 in income taxes.

This is still significantly less tax on the same earnings outside super and would be brought in over a ten-year transition period.

These taxes would still only apply to your earnings – not your balance. I remain strongly against taxing unrealised gains.

These are modest contributions, but they help make Australia’s world-class retirement income system more sustainable with an ageing population.

People planning and preparing for retirement should have certainty and stability. The changes I’m suggesting will be carefully phased in over time.

The changes lift the tax burden on superannuation, but changes are modest, with significant tax discounts remaining, whether you’re paying in or drawing down.

Most importantly the changes set the basis for the long term so people can know that the superannuation system will be stable for many years, rather than changing frequently as it has in the past.

If you are earning income from both investments and wages, you are unlikely to notice a increase in your tax bill. In fact, many will be better off because this proposal lowers the overall tax rates.

Super should absolutely remain tax advantaged - and under my proposal it does.

But over time, the system has become less principled and more ad hoc, with very large balances receiving concessions that go well beyond what’s needed to fund retirement.

What I’m proposing is a clear and stable framework where super earnings continue to be taxed at a constant discount relative to investments outside super, but not in a way that creates unlimited concessions.

That gives retirees certainty while keeping the system fair and sustainable.

Australia should absolutely ensure we get a fair return on our natural resources, and I’ve been a strong and vocal advocate for reform. This White Paper is the first of several papers to come, and it is my intention to consider resource rent taxes in future work.

However, resource revenues are volatile due to fluctuations in global resources prices, and they aren’t a reliable long-term funding source. This does not make them a good candidate for permanent and ongoing reform, such a personal income tax cut. Intermittent spikes in resource tax revenue would be more suitable for budget repair. If we want a durable tax system that supports workers and the economy over time, we need structural reform within the tax system itself as well.

Historically, modest changes to how we tax investments have not materially led to either an increase or decrease in investment in Australia.

In fact, there is good international evidence that shows tax doesn’t so much impact how much people invest, but where they invest it.

At the moment our tax settings encourage highly debt leveraged investment, particularly in housing – very little of which represents new housing stock. Rebalancing those incentives can help ensure more investment flows into productive parts of the economy that drive growth and jobs.

The evidence suggests the effect on both housing supply and rents will be small. Research completed by the Grattan Institute suggests that slashing the discount to below what this proposal suggests (25% instead of 30%) would only decrease the number of new homes being built by about 10,000 over the next five years.

If some investors decide to sell a property or not compete at an auction, that property doesn’t disappear - it’s typically purchased by an owner-occupier. That means one fewer rental property but also one fewer renter, which tends to balance out - a point that economist Saul Eslake has made repeatedly.

Housing supply is what really drives rents, and the modelling suggests these changes would have very little impact on new housing supply overall.

I continue to support indexation of income tax brackets – I think there is strong justification and it would apply some fiscal restraints on spending decisions.

But indexation mainly prevents taxes from rising in the future. It doesn’t provide meaningful relief now.

Given the pressures facing younger Australians today, my priority was delivering immediate reductions in the tax on work, while continuing to support indexation as part of longer-term reform.

I believe indexation is best achieved by bringing spending into line with the growth of the economy, not faster than its growth; along with ensuring that the brackets are roughly where we want them to be. There is little to suggest that the current rates thresholds are appropriate so we should be cautious before freezing them in time.

Changes to the GST are reforms that are worth considering in the future and may be included in future White Papers. However, while inflation is still high and already eroding the purchasing power of Australians’ incomes, I have judged that there is not enough community support for increasing or broadening of the GST right now, even if that meant further reductions in income taxes.

With federal government spending at near record highs, there are definitely areas of the budget that need to see significant savings. However, spending restraint is needed to deal with ongoing budget deficits (estimated to be around 300 billion), bracket creep (estimated to cost us around 300 billion) and pressures like the need for an increase defence spending, which could cost over 250 billion over the next ten years.

The tax system is not just about how much tax we raise, but also how we raise it. Irrespective of spending, I think there is a strong case that we don’t have those settings quite right. Due to an ageing population and a focus on taxes on labour income, a smaller proportion of our population is carrying an undue burden of tax. This will only get worse over time. Additionally, our tax system extracts the most from Australians at the time in their life when they also have the highest expenses – raising kids, saving for or paying a mortgage, and investing for their future.

While I agree that more needs to be done on the spending side of the ledger, I think more can be done to make how we collect our tax fairer and more sustainable. For those reasons - and acknowledging that many Australians do want to see lower spending - I have designed the package to be budget neutral. Every dollar raised given back to Australians through lower income tax.

No. A key principle of this proposal is that it is budget neutral.

Every dollar of tax relief for working Australians is funded by moderating concessions elsewhere in the system, not by increasing borrowing.

That means we can improve fairness in the tax system without adding to government debt or pushing costs onto future generations.