As the 48th parliament formally opened, Opposition Leader Sussan Ley reaffirmed that the Coalition would not support higher taxes to address the budget deficit.

Last Monday (14 July), leaked Treasury advice indicated that the government would need to raise taxes or cut spending as part of its upcoming reform agenda to achieve fiscal sustainability.

Liberal leader Sussan Ley indicated that the Coalition would generally not be supportive of tax hikes as the government collected ideas ahead of its August economic reform roundtable.

“I haven’t met a single Australian who wants to pay more tax, who thinks they’re paying not enough tax,” Ley told the Coalition party room on Monday.

“And what I do know is that every single Australian expects this government to minimise their tax bill, to work hard for them, and to make sure they run a responsible budget with responsible economic management across the country.”

The comments highlighted the Coalition’s preference for public spending cuts over tax hikes to combat Australia’s budget deficit, which has been exacerbated by structural spending pressures, including the NDIS, health, aged care, defence and public debt interest.

David Montani, national head of technical tax at Grant Thornton, told Accounting Times that fixing Australia’s poor fiscal position would require policy change.

“The federal budget is in a structural deficit. That means that economic growth is not going to repair the budget. It's going to require policy change,” Montani said.

“The equation is rather simple. To arrest that structural deficit, you have to raise taxes, reduce spending, or both.”

In June, Treasurer Jim Chalmers began accepting public submissions on ways to boost productivity, build economic resilience and strengthen budget sustainability.

The treasurer noted that proposals would have to meet three preconditions: being in the national interest, being budget neutral at a minimum but preferably budget positive, and that ideas should be specific and practical.

The second caveat, budget-positive reforms, indicated that higher taxes would likely be on the table as part of Labor’s tax reform agenda.

In line with its aversion to tax hikes, the Coalition also opposed Labor’s super tax bill, which would impose an additional 15 per cent tax on superannuation earnings above $3 million, including on unrealised gains.

Finance Minister Katy Gallagher told ABC Radio National on Tuesday that Labor would work with the Greens to get its superannuation tax bill through the Senate.

“The pathway through on that bill is engagement with the Greens,” Minister Gallagher said.

“The opposition has made it pretty clear, or they did in the last term, that they weren’t interested in that bill. We think it’s sensible and modest changes to superannuation, so we’ll continue to engage with the Greens on that.”