3 May 2018
Scott Murdoch – Journalist | Sydney | @murdochsj
Peter Costello has challenged federal parliamentarians to do their own tax returns and manage their own superannuation, and to navigate a financial system in Australia which has become too complex to understand.
Mr Costello said Australia’s tax laws needed to become simpler and had become bogged down in changes which had made the system difficult to understand.
In an extraordinary attack on the superannuation system, Mr Costello also said politicians should be made to manage their own money and face the same penalties if mistakes are made.
“I would be in the top percentage of people when it comes to understanding the tax system and the financial management system but the complexity of this is unbelievable,” Mr Costello told the Macquarie Connections conference in Sydney.
“I would like to see MPs manage their own funds, and if they break the laws I’d like to send them to jail because that is what they are holding over everyone else with these laws. You might then get some simplicity into the system.”
The GST, he said, was introduced during his time as treasurer to simplify the Australian tax system but that goal had now been lost. He claimed federal parliamentarians would not be doing their own taxes each year because the system was too difficult to understand.
“I actually think, we have lost sight of this in Australia, a revenue system should be to firstly raise money and raise it in the least disadvantageous way for the economy and there has to be simplicity
“I tell you the transactional costs under a complex system can outweigh any revenue you get from it
“No MP would be filling in their own tax return, they can’t understand the system, they are just legislating it. That is a pretty good indication of the difficulty of the tax system as it stands at the moment.”
Mr Costello also took aim at the constant changes put in place by both the previous Labor governments and the current Coalition on superannuation taxes. He also said the current super rules made funds and workers too focused on accumulating funds rather than on how to manage the money after retirement.
“The taxation treatment of the drawdown changes every budget, it’s complicated, no one knows,” he said.
“I feel sorry for some of these financial advisers actually they are meant to tell people how to cope with all of this but no one can understand all the rules
“I wouldn’t be a financial adviser, it’s beyond my level of competence to figure out all the taxation and taxation treatments of superannuation. That is the big thing now, what we do in retirement phase, what the tax treatment.
“The one thing I would say to government is can you just give us some certainty on the rules and can you make them simple please.”