Future scenarios

This chapter presents selected scenarios to bring together a number of themes set out in the earlier chapters. While the scenarios all have a connection to various policy discussions that have taken place over the years, they are designed to illustrate and inform, rather than to advocate or provide a comprehensive analysis.

Governments may make choices to tax a new revenue source (such as wealth), increase resources to boost compliance with existing taxes, remove some existing tax concessions, drive (or discourage) certain behaviours via taxation, and continue to shore up the integrity of areas of the tax system. 

However, these changes, even taken in combination, are unlikely to raise enough revenue to materially change the composition of Australia’s tax mix.

As we saw earlier, even the most substantial tax policy of at least 50 years – the introduction of the GST – did not significantly shift the overall tax mix. In fact, the introduction of the GST and the associated personal income tax cuts did not result in any significant change to Australia’s mix of indirect and direct tax.

Only significant policy or other changes would materially change the tax mix. Below, we examine some scenarios which would be significant enough to make such material changes.