Work, save, invest.
That is the new three-word mantra from new Federal Treasurer Scott Morrison.
A Foolish mantra at its best.
Mr Morrison says the government wants to reform the tax system to "encourage people to work, save and invest", adding in an interview with Fairfax Media, "People can work more and be better off, save better and put themselves in a stronger position, and invest in their own capabilities in skills, in their kids' education, in their health or any other way they choose".
Mr Morrison wants Australians incentivised to choose to work, rather than falling back on the welfare system and saying "it's all too hard".
The Federal government was in the midst of a review of Australia's tax system, but it now appears that all the work so far will be paused, and a more in-depth review is likely to go ahead, encompassing more aspects of the government's revenue collection, including potentially looking into taxes collected by each of the state and territory governments.
Some states are still charging taxes they agreed to get rid of when the GST was first implemented more than 15 years ago (July 2000), including stamp duty. Stamp duty, particularly on houses, raises billions for the state governments, so it's easy to understand why they don't want to give it up.
The mantra from the new Treasurer suggests he could be a Fool (capital 'F'). Mr Morrison also said, "I think we've got a spending problem not a revenue problem". In other words, Mr Morrison thinks we spend more than we earn and need to cut our spending, save more and invest for the future.
Sounds sensible and Foolish.
Unfortunately, far too many Australians spend more than earn or live paycheck-to-paycheck, setting nothing aside for the future. The number of Australians investing in the stock market appears to be steadily declining too.
We've highlighted previously that many Australians won't have enough in super when they retire to live the lifestyle they would like, and many will end up on part or full-age pensions – something the government has to somehow fund.
The problem is that with an ageing population, more and more of us will be dependent on government funding while those of working age could be forced to pay higher and higher taxes to fund it.
Clearly we need more incentives to work, save and invest for the long-term. Let's hope the new treasurer can find fair ways of doing that for all Australians.
