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Hockey willing to examine "Buffett rule"

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Federal Treasurer Joe Hockey is willing to look at the concept of a “Warren Buffett rule”.

But he says high earners already pay a large proportion of the tax take.

This weekend’s ALP national conference agreed to consider an Australian version of the rule – named after US billionaire Warren Buffett – that would force the nation’s highest-income earners to pay a minimum rate of tax.

Recent Australian Taxation Office figures show around 75 Australians earning more than $1 million a year paid no tax.

But Hockey says that 10 per cent of the working population contributes 50 per cent of the income tax paid in Australia and if the right formula wasn’t struck, then those high-income earners could move overseas.

He said it was a balancing act to ensure the tax system was fair, but at the same time ensure Australia was competitive with other countries.

“I’m happy to look at it,” Hockey told ABC radio, referring to the context of the taxation white paper.

His comments came as business consultant KPMG Australia called for sweeping changes to the tax system in its submission to the tax white paper.

It calls for linking tax thresholds to average full earnings to eliminate bracket creep, and the abolition of stamp duty and other inefficient state taxes.

It also wants to see the corporation tax rate slashed to 26 per cent and an increase in the GST to 15 per cent.

It argues all taxes should be collected by the ATO for the next eight years, taking all tax collections rights from the states to improve efficiencies.

KPMG Australia chairman Peter Nash said there needed to be far-reaching proposals, rather than just tinkering at the edges.

“This is a once in a generation opportunity to get tax reform right,” Nash said in a statement.

Last week’s meeting between Prime Minister Tony Abbott, premiers and chief ministers agreed to further consider an increase in the GST rate to 15 per cent or an increase in the Medicare levy to help pay for the country’s future health funding.

They also agreed to broaden the GST to include overseas online transactions under $1000.

Asked if the GST threshold could go as low as $20, Hockey said: “It could, it may well go to zero as well.”

Hockey and the nation’s other treasurers will consider the issue at a meeting next month.

– AAP

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