Our tax system sucks.

Our tax system sucks.

We are going nowhere unless we address the risk of poverty in Australia because growing poverty is our country's most significant social and economic risk. A slight wage increase does not solve it; it's solved by solutions and contributions by all.

We need a new or radical idea to change it, cure some social ills, and create a way for governments to care and take responsibility for all the taxes they flush away.

And – this can only work if the "struggling" middle class accepts that – that's what they are middle class – because the lure of you could be a billionaire as well sucks them in every time.

I don't expect this to go viral. I am writing this because having worked in the accounting and business services world for over 28 years and have seen how Australians keep struggling. I don't believe - I know that it's in the best interest of Governments to keep people down so they can keep offering them crumbs for their increasingly miserable lives.

I could get a like or two (thank you, Ken) and start a conversation.

The Fair Work Commission has just awarded 180,000 of Australia's lowest-paid workers a 5.75% pay rise – minus tax. That's $70.00 minus tax (never forget that the low-paid worker doesn't get all of it.

Australian Industry Group chief executive Innes Willox said (The Australian June 3 – 4), "The decision adds to the risk of the inflation blows out" – yes, I agree with that; it probably does.

Australian Chamber of Commerce and Industry (same article Australian) said that "the increases, when taken along with the superannuation rise from July 1st, risk unlocking the flood gates for deep, prolonged pain, today's decision will come as a hammer blow to 260,000 small and family-owned businesses" – yes, I agree with that, it probably will happen.

And it goes on, those representing business and, in truth, meaning the big end of town go on about how a dollar value that may add up to a quarter of a shopping basket will blow inflation, and that's probably true.

ACTU secretary Sally Mc Manus said "that (the increase) would help millions of working people to stay afloat – yes, I agree with that as well.

She added, "Today's 5.75% increase for award workers means they can keep up with the cost of living – no, I disagree. The increase for those on minimum wages and keeping a family will continue to go backwards.

Here is the thing – OK – we have many people stuck on low pay because that's what businesses can afford, or society deems it the amount they get paid.

Be it a career choice that was about a passion (working in many of the areas of health) or stuck because of a lack of education or came from the wrong side of town (let's be honest, that's usually the case), some are stuck here, and the reasons why whatever the Fair work gives them is too low, and reasons why what Fair work gives them will damage the economy are usually valid arguments, be it from two sides of the coin.

So here is how I would change that and make Australia and Australians financially stronger and Canberra (and the states to follow) more accountable, get some cash from the multinationals and other more fortunate (a bit more folks from there because you have loads) and simplify our tax system for many.

One – You do not pay tax if your income is under $1,000.00 (This is tied to inflation. It goes up, so the amount goes up).

Brilliant

The tax scale starts after $52k a year.

1)???We have handed back much money to low-income earners. Even giving them some dignity in what they can afford to buy when shopping, maybe a few more dollars to support kids etc.

2)???This doesn't hit small businesses or those with limited resources to fund caregivers or other good souls who do great work for little. It reduces much of the bureaucracy for SMEs with payroll; they hand over the gross wages and pay super.

3)???It may relieve pressure on our social systems because we gave back enough.

Two – everyone gets child support; everyone gets a pension. If you are middle class or wealthy, this is your right because you pay taxes, and it's fair. There may be a variation based on income for child support. Still, we can eliminate a truckload of costs in assessing, belittling, and scrutinizing people for this support – you have kids, well done, we need more population, and even if you are a billionaire, here is a little thank you.

Worked all your life – you were good enough to save, and you have a super, well done, but here is your pension.

Appreciate that the pension is taxed at source, so if you are still working and your super is funding you well, you will be taxed at source, but there is no question about your right to it.

My three will come once everyone gets used to One and Two. That is a living wage that, again, is taxed at the source that allows the removal of the stigma of unemployment and hard times. Again, this would be taxed at source and replace the pension. It's a life thing.

I want to add a mature society where everyone understands responsibility and accountability counts. Handling cash and not declaring income would have severe punishments, including being called out. Minimum fine of 20x what is estimated as the cash you have taken).

Having been running an accounting firm and consultancy firm, I understand double entry. If you make such radical changes, you must have a balance to make it work.

To have this fairer, better system for Australians (who don't want to see their fellow citizens struggle and beg (begging in the queue at Centrelink).

So here is the other side.

One - Productivity – That is supposedly the offset that businesses want; improve productivity, and then a pay increase is OK.

I get that. I have a business, and we have been under pressure for the last two years with pay, and it's hard to raise prices; we hope for and look for productivity. Having been in business for over 48 years, I don't have the science or the data, but I know that people work better with more pay.

"Money talks, bullshit walks" was the phrase my father used. He was in business for over 50 years. The tax back for all those under $1k per week would give them a significant boost in well-being.

So, my plan will increase productivity, and more cash in hand for lower-paid workers will be an incentive to take up jobs that may be less desirable.

Two – Here is the one no one will like - TRANSACTION TAX – you move money, you pay tax. You play the system by moving money (share buy-back schemes and other schemes). You pay tax, be it a small amount skimming off from all transactions over 1 million dollars.

The two readers who read this article may move over a million once or twice in your life when you buy or sell a house.

But large organizations, who have every opportunity in the world, every plan, and scam, take advantage of quantitative easing and everything else – including the tax on funnelling money offshore to a better tax regime.

All that shovelling money for advantage "gets taxed".

Move large amounts of money, and pay tax.

It will only be a tiny amount, say part of 1%; we make up what we need. Guess what? This doesn't affect most Australians, but those doing something in the hands of the high and mighty in Canberra.

Three – Governments spend what they have. We have our sacred cows – health, education, defence, and others that should be set in stone. I don't know why there is a separate department for health, education, housing etc., in each state and federally (maybe I need to change the constitution as well), but it isn't that obvious.

What can the savings be by making logical changes? Billions?

I would have the government – those bods that want to be in parliament make the decisions. They don't need a wad of consultants (do I discuss PwC at this point why the xxx and others are getting so much when there is an internal government bureaucracy and advisors? The hangers-on everywhere will go, and that folk is billions.

The last thing I don't think we can do, but I would want to strap a bullshit meter to everyone in Canberra, especially when they are making "promises for votes" These over-the-top promises cost – and they cost those on low-paid income a lot.

Regarding other taxes, we leave GST and others where they are.

OK, this is not wholly costed.

But we have a problem to solve, our tax system for the lower paid and the lack of tax for those moving billions or absence of all needs fixing.

But ideas must start somewhere, and the fight over a slight pay rise for low-paid workers and what the effect is now as pathetic as it is ridiculous. It's part of the labour–liberal–union business organization game.

We are going nowhere unless we address the risk of poverty in Australia because growing poverty is our country's most significant social and economic risk. A slight wage increase does not solve it; it's solved by solutions and contributions by all.?