We welcome the Committee’s inquiry into the cost of living pressures Australians are facing. The Tax Institute is of the view that tax and transfer measures can be used effectively to ease the cost of living. This can be through tax incentives for businesses to invest in skills, training and technology to improve productivity, or increasing the subsidisation of costs, such as the Child Care Subsidy (CCS), to encourage greater workforce participation.
It is imperative that, as cost of living pressures increase, taxpayers can readily access information and services, so they can easily comply with their tax affairs and do not become disengaged from the tax system. Therefore, our recommendations include allocating permanent funding to the ATO to enable it to provide guidance and efficient services to the Australian tax community. We also consider that additional funding of the National Tax Clinic program will enable it to expand its service offerings to more taxpayers impacted by cost of living pressures, and support better tax compliance for a wider range of the Australian community.