Time to Lead: Reforming Tax and Tackling Wasteful Spending

Treasurer Jim Chalmers announced the Albanese Government’s readiness to undertake structural economic reform, including “reforming” Australia’s tax system in a National Press Club address on 18 June 2025. He has signalled a willingness to pursue bold reform aimed at boosting productivity, lowering the personal tax burden and securing long-term budget sustainability.

Yet, in the same address the examples cited by our Treasurer of tax reform in his government’s first term in office were underwhelming and arguably not indicative of the broad-based, comprehensive tax reform we truly need to prepare our economy for the future. What our Treasurer has described as tax reform is merely tinkering around the edges of an outdated and distortive tax system that holds us back economically.

At PVW Partners, we’ve long advocated for genuine, broad-based tax reform that builds confidence in the long-term integrity of the tax system and provides a level playing field for all Australians. Rather than isolated, politically expedient changes, we believe true reform must deliver fairness, simplicity and support for sustainable economic growth across all sectors of the economy.

One area the Treasurer appears hesitant to touch is the GST, but sidelining it is a major shortcoming in any genuine effort at tax reform. If we're serious about creating a more efficient and less distortive tax system, GST must be part of the conversation and genuine intent must exist to consider raising the rate of GST and broadening its base, supported by appropriate compensatory measures via other personal and household taxation changes.

Our Treasurer highlighted the dangers of the “rule-in rule out game” in his address and should himself be explicitly confirming a commitment to reviewing the GST system as part of broad based tax reform in Australia. There are several compelling reasons for this:

• Australia’s GST is low by international standards, both in terms of the rate and its overall contribution to revenue;
• GST provides a relatively stable and predictable revenue stream, which is crucial for long-term budget planning; and
• without reforming the GST system it seems highly unlikely that our States and Territories can be brought to the tax reform table and once again given the opportunity to eliminate abhorrent payroll and other state taxes in return for increased GST based allocations (an opportunity missed when GST was introduced and its original application watered down).

If reform is truly on the agenda, GST can’t be left out. It’s a key piece of the puzzle in building a smarter, fairer and more sustainable tax framework for the future.

Reform Must Go Beyond Tax

While taxation reform is vital, it cannot exist in isolation. Revenue measures alone will not resolve the structural issues facing our economy. Equally important is ensuring that government spending is disciplined, transparent and targeted towards delivering measurable outcomes for the community.

We believe the following areas require urgent attention:

• Spending restraint: Expenditure growth must be kept in check and aligned with the nation’s revenue base to avoid further budget blowouts
• Efficiency and effectiveness: Government programs and services should be rigorously evaluated to eliminate duplication, inefficiencies and waste, ensuring taxpayer dollars are spent wisely
• Structural reform: Long-term pressures on the budget, such as those posed by an ageing population, rising healthcare costs and programs like aged care and the NDIS, must be addressed with forward-thinking, data-driven policy

A Broader Vision for Economic Reform

While PVW Partners supports the government’s renewed focus on tax reform, we believe it must form part of a broader, more comprehensive economic reform agenda. Tackling Australia’s structural budget deficit, boosting national productivity and strengthening fiscal sustainability will require coordinated action across taxation, spending and regulatory reform. Federal, State and Territory Governments must effectively collaborate to achieve true reform.

We welcome the announcement of the Treasurer’s Economic Reform Roundtable, scheduled for August 2025, which aims to bring together key stakeholders from business, community, and policy sectors. While we’re still awaiting our invitation to participate, we see this forum as a vital opportunity to help shape a bold, responsible agenda that strengthens economic resilience and supports long-term prosperity.

At PVW Partners, we urge the Albanese government to approach this agenda with both leadership and rigour. We stand ready to contribute to conversations that drive meaningful reform, reform that supports Australian businesses, strengthens regional economies and delivers benefits to all Australians for generations to come.