Taxed into Oblivion

By the time the bills arrived, the Nation had already gone quiet. The young had done everything asked of them: worked late, started small businesses, rented tiny apartments, and paid more in tax each year than they could save. The government called it fairness, then responsibility, then austerity, but each new levy took a little more breath from the future until hope itself became an expensive commodity.

Mara, twenty seven, watched her salary disappear into income tax, fees, and a dozen “temporary” charges that never ended. Her friends stopped buying homes, then stopped hiring, then stopped having children. The cafés emptied, the shops closed early, and the banks grew nervous as debt piled up on debt, all balanced on the shrinking shoulders of people too young to remember the old promises.

As the pressures mounted, something cracked not in the headlines, but in the habits of everyday life. Young people stopped buying, stopped investing, stopped starting families as early as they once might have. They moved less, traveled less, dreamed smaller. The system that had asked them to pay for the past and the present now found itself with fewer people willing to carry the future.

When Treasury finally admitted the truth, it was too late. The tax base had collapsed because the workers had vanished into exhaustion, emigration, and despair. The old had protected their comfort with policies that borrowed against the future, but the future had refused to pay. The Nation did not fall with a bang; it thinned out, one taxed generation at a time before sliding into irrelevance.

While this short story is somewhat dramatised, it is beginning to feel more and more like the collective experience of young Australians.

Reform Failure

Persistent fiscal deficits and rising tax burdens are not just short-term policy challenges; they represent a structural intergenerational transfer of risk. By deferring the cost of today’s spending, governments effectively shift the burden onto younger and future taxpayers, who face higher taxation, reduced fiscal flexibility, and a diminished capacity for governments to respond to economic shocks. Over time, this dynamic can crowd out productive investment, constrain growth, and erode long-term economic resilience, particularly in an environment already shaped by demographic ageing and slower productivity gains.

Former Australian Treasurer Peter Costello long argued that to be classified as genuine tax reform and not just another tax grab or temporary fix, a policy must meet certain criteria: So lets see if our new 2026-27 budget, titled "Resilience and Reform" fits the bill by using a simple Pass/Fail grade system.

1. Reduce the overall tax burden (FAIL)
   Costello maintains that the problem is not too little taxation, but too much government spending. True reform means lowering the total tax take as a share of GDP, not locking in higher permanent levies on the young and the productive.

2. Improve efficiency and structure (FAIL)
   The system should shift from distortionary direct taxes on income and capital toward broader, more neutral indirect taxes. For example, expanding consumption‑based taxes like the GST only if the revenue is recycled into large cuts to top marginal income and company tax rates, and obsolete state‑level taxes are scrapped.

3. Simplicity and clarity (FAILED BY A COUNTRY MILE)
   Rules must be broad, predictable, and easy to understand. Costello has long criticised “monstrous complexity” and endless loopholes, favouring straightforward, widely applicable rules; such as the 50% CGT discount, over intricate or hard to administer regimes.

4. Promote incentives for work, saving, and investment (FAIL)
   A reformed tax system should strengthen, not weaken, the incentives to earn, save, and invest. High taxes on capital and constant changes to tax settings erode productivity and tend to punish younger generations who depend on growth, mobility, and risk‑taking to build their futures.
   
   Based on this very clear and simple criteria, It seems that once again our politicians have failed to generate anything meaningful whatsoever, let alone anything that remotely qualifies as tax reform.
   
   Here you go, have $250.