Ex-treasury boss calls for tax cuts to roll through

·1-min read

The stage three income tax cuts should go ahead because they go some way to offsetting bracket creep, a former top Treasury official says.

Ex-Treasury secretary Ken Henry led the last big review of the tax system and said Australians had to become comfortable with comprehensive reform.

He said Australia needed to place less reliance on personal income tax and look at alternative revenue streams.

Asked about the stage three tax cuts, which come into effect in July 2024, Dr Henry said they should go ahead but not fully achieve offsetting bracket creep.

"The stage three tax cuts should be allowed to roll through," he told the ABC on Thursday.

"Handing back the fiscal proceeds of bracket creep is the very minimum that has to be done in restructuring the Australian taxation system.

"In fact ... we have to go well beyond that."

The federal government has increasingly come under pressure by the crossbench to repeal the tax cuts.

Anyone with a taxable income of more than $45,000 will benefit from the cuts, which are estimated to cost $243 billion over 10 years.

Dr Henry said resources were not being appropriately taxed in Australia.

"The biggest problem is that we don't, as a community, derive sufficient compensation for the resources that we dig out of the ground and send overseas that we export," he said.

"We celebrate the exports without worrying too much about how much we're receiving compensation for shipping them off offshore."