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Why tax reform is the key to reversing Australia’s growing wealth divide

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Post-election tax reform is the key to reversing Australia’s growing wealth divide

Helen Hodgson, Curtin University

Federal elections always offer the opportunity for a reset. Whoever wins the May 3 election should consider a much needed revamp of the tax system, which is no longer fit for purpose.

The biggest challenge that should be addressed through tax reform is the level of inequality in Australian society.

The five-yearly Intergenerational Reports lay bare the intergenerational squeeze. The future burden of supporting the ageing population will increasingly fall on younger Australians who generally don’t enjoy the same financial wellbeing of previous generations.

But there is also rising inequality within generations. Not all younger Australians can rely on inherited wealth, including the bank of mum and dad. And superannuation balances at retirement vary wildly, given they are tied to work history.

Proper systemic tax reform would play a crucial role building a fairer society.

Reform freeze

But to define what is meant by tax reform, we need to think about some of the big picture concerns that affect our economy.

Arguably we have not successfully pursued a tax reform agenda since the introduction of the GST in 2000. Various governments have changed the tax rates, but that doesn’t constitute genuine reform.

The Henry Review, commissioned by the Rudd government, set out the long-term horizon for reform – including resource taxes and road user charges for the transition to a net-zero economy. However, the Henry blueprint has not been adopted by any succeeding government.

Politicians like to boast of “reform agendas”. Despite the political rhetoric, the tax system has not yet adapted to the 21st century.

Wealth inequality

The biggest gap in our tax base relates to the concessional taxation of wealth and assets, which is an area ripe for reform.

According to the Treasury, the top six revenue losers all relate to superannuation, capital gains and negative gearing. In 2024–25, the estimated revenue foregone for these concessions are:

  • $29 billion for the concessional taxation of employer superannuation contributions
  • $27 billion for the main residence Capital Gains Tax exemption (discount component)
  • $26 billion for rental deductions (this is partly offset by rental income)
  • $24.5 billion for main residence Capital Gains Tax exemption
  • $22.73 billion for CGT discount for individuals and trusts
  • $22.2 billion for the concessional taxation of superannuation earnings

The distributional analysis for superannuation and the Capital Gains Tax discount shows the greatest benefit goes to older taxpayers in the higher earnings brackets. So wealth inequality is perpetuated.

Addressing these overgenerous concessions to broaden the tax base should be the starting point for any meaningful reform in this country.

Taking another look at death duties, which were abolished from the late 1970s, should also be considered.

Death duties were applied to assets transferred to beneficiaries on death. If they were reimposed with a starting threshold set at an appropriate level, they would limit the intergenerational transfer of wealth, which is generating much of the inequity.

Wealth creation tools

The Capital Gains Tax discount was introduced following the 1999 Ralph Review to direct productive capital into Australian businesses.

The 50% discount sparked the boom in residential investment, which combined with negative gearing, has supercharged the inefficiencies in our housing market.

Superannuation is another wealth-creation tool. Again, the design of superannuation, whereby tax was paid at 15% on the three stages of contributions – investment, earnings and withdrawal – was subverted in search of simplicity in 2007 when the Howard government exempted superannuation withdrawals from tax.

Case study

By comparison, the age pension is taxable, if the recipient earns other income. So too are earnings from work allowed under Centrelink rules. This not only allows estate planning advantages, but creates an unfair outcome for retirees who have not had the opportunity to accumulate substantial balances.

Consider the cases of “Jean” and “Kim”, who are both single homeowners aged 68.

Jean has no financial assets and receives the full pension of $1,194 per fortnight plus $512 per fortnight from part-time work. She has a taxable income of $43,816 per annum and, after tax offsets, pays $2,595 in tax including $209.70 medicare levy.

Kim has a superannuation balance of $880,000 and draws a super pension of $44,000. Kim is not eligible for the pension, but pays no tax and no medicare levy.

Is our tax system really delivering a fair go for all Australians?

Tax relief is not reform

Ahead of election day, both the government and opposition are promising tax handouts. Labor is offering top-up tax cuts starting July 1 2026. The coalition says it will temporarily halve the fuel excise.

But meaningful reform will not be achieved by politicians trading off various interest groups to win votes.

Nor do we need yet another review: many of the solutions to Australia’s tax problem were identified by the Henry Review 15 years ago.

And we must avoid cherry-picking incentives that lead to perverse outcomes. For example, cutting fuel excise will slow down the transition to a net zero economy.

Consensus needed

Whoever forms government after the election could build a coalition of business and community sector leaders to seek consensus and pursue holistic reform. The focus must be on addressing the inequality that is emerging as a challenge to the economy and our way of life.

As Ken Henry recently stated, successive governments have fuelled inequality by failing to do three things

one, manage financial risks arising from the erosion of the tax base; two, maintain the integrity of the tax system; and three, have regard to intergenerational equity.

Without significant tax reform, Australia’s wealth divide will continue to deepen with young people and future generations left to suffer the brunt.


This is the sixth article in our special series, Australia’s Policy Challenges. You can read the other articles here

Helen Hodgson, Professor, Curtin Law School and Curtin Business School, Curtin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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The Supreme Court is headed toward a radically new vision of unlimited presidential power

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In a series of cases over the past 15 years, the Supreme Court has moved in a pro-presidential direction.
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Graham G. Dodds, Concordia University

President Donald Trump set the tone for his second term by issuing 26 executive orders, four proclamations and 12 memorandums on his first day back in office. The barrage of unilateral presidential actions has not yet let up.

These have included Trump’s efforts to remove thousands of government workers and fire several prominent officials, such as members of the Corporation for Public Broadcasting and the chair of the Commission on Civil Rights. He has also attempted to shut down entire agencies, such as the Department of Education and the U.S. Agency for International Development.

For some scholars, these actions appear rooted in the psychology of an unrestrained politician with an overdeveloped ego.

But it’s more than that.

As a political science scholar who studies presidential power, I believe Trump’s recent actions mark the culmination of the unitary executive theory, which is perhaps the most contentious and consequential constitutional theory of the past several decades.

A prescription for a potent presidency

In 2017, Trump complained that the scope of his power as president was limited: “You know, the saddest thing is that because I’m the president of the United States, I am not supposed to be involved with the Justice Department. I am not supposed to be involved with the FBI, I’m not supposed to be doing the kind of things that I would love to be doing. And I’m very frustrated by it.”

The unitary executive theory suggests that such limits wrongly curtail the powers of the chief executive.

Formed by conservative legal theorists in the 1980s to help President Ronald Reagan roll back liberal policies, the unitary executive theory promises to radically expand presidential power.

There is no widely agreed upon definition of the theory. And even its proponents disagree about what it says and what it might justify. But in its most basic version, the unitary executive theory claims that whatever the federal government does that is executive in nature – from implementing and enforcing laws to managing most of what the federal government does – the president alone should personally control it.

This means the president should have total control over the entire executive branch, with its dozens of major governmental institutions and millions of employees. Put simply, the theory says the president should be able to issue orders to subordinates and to fire them at will.

President Donal Trump appears seated in the oval office.
President Donald Trump signs executive orders in the Oval Office next to a poster displaying the Trump Gold Card on Sept. 19, 2025.
AP Photo/Alex Brandon

The president could boss around the FBI or order the U.S. attorney general to investigate his political opponents, as Trump has done. The president could issue signing statements – a written pronouncement – that reinterpret or ignore parts of the laws, like George W. Bush did in 2006 to circumvent a ban on torture. The president could control independent agencies such as the Securities and Exchange Commission and the Consumer Product Safety Commission. The president might be able to force the Federal Reserve to change interest rates, as Trump has suggested. And the president might possess inherent power to wage war as he sees fit without a formal authorization from Congress, as officials argued during Bush’s presidency.

A constitutionally questionable doctrine

A theory is one thing. But if it gains the official endorsement of the Supreme Court, it can become governing orthodoxy. It appears to many observers and scholars that Trump’s actions have intentionally invited court cases by which he hopes the judiciary will embrace the theory and thus permit him to do even more. And the current Supreme Court appears ready to grant that wish.

Until recently, the judiciary tended to indirectly address the claims that now appear more formally as the unitary executive theory.

During the country’s first two centuries, courts touched on aspects of the theory in cases such as Kendall v. U.S. in 1838, which limited presidential control of the postmaster general, and Myers v. U.S. in 1926, which held that the president could remove a postmaster in Oregon.

In 1935, in Humphrey’s Executor v. U.S., the high court unanimously held that Congress could limit the president’s ability to fire a commissioner of the Federal Trade Commission. And in Morrison v. Olson the court in 1988 upheld the ability of Congress to limit the president’s ability to fire an independent counsel.

Some of those decisions aligned with some unitary executive claims, but others directly repudiated them.

Warming up to a unitary executive

In a series of cases over the past 15 years, the Supreme Court has moved in an unambiguously unitarian, pro-presidential direction. In these cases, the court has struck down statutory limits on the president’s ability to remove federal officials, enabling much greater presidential control.

These decisions clearly suggest that long-standing, anti-unitarian landmark decisions such as Humphrey’s are on increasingly thin ice. In fact, in Justice Clarence Thomas’ 2019 concurring opinion in Seila Law LLC v. CFPB, where the court ruled the Consumer Financial Protection Bureau’s leadership structure was unconstitutional, he articulated his desire to “repudiate” the “erroneous precedent” of Humphrey’s.

Several cases from the court’s emergency docket, or shadow docket, in recent months indicate that other justices share that desire. Such cases do not require full arguments but can indicate where the court is headed.

In Trump v. Wilcox, Trump v. Boyle and Trump v. Slaughter, all from 2025, the court upheld Trump’s firing of officials from the National Labor Relations Board, the Merit Systems Protection Board, the Consumer Product Safety Commission and the Federal Trade Commission.

Previously, these officials had appeared to be protected from political interference.

President George W. Bush appears with several soldiers.
President George W. Bush signed statements in 2006 to bypass a ban on torture.
AP Photo/Pablo Martinez Monsivais, File

Total control

Remarks by conservative justices in those cases indicated that the court will soon reassess anti-unitary precedents.

In Trump v. Boyle, Justice Brett Kavanaugh wrote, “whether this Court will narrow or overrule a precedent … there is at least a fair prospect (not certainty, but at least a reasonable prospect) that we will do so.” And in her dissent in Trump v. Slaughter, Justice Elena Kagan said the conservative majority was “raring” to overturn Humphrey’s and finally officially embrace the unitary executive.

In short, the writing is on the wall, and Humphrey’s may soon go the way of Roe v. Wade and other landmark decisions that had guided American life for decades.

As for what judicial endorsement of the unitary executive theory could mean in practice, Trump seems to hope it will mean total control and hence the ability to eradicate the so-called “deep state.” Other conservatives hope it will diminish the government’s regulatory role.

Kagan recently warned it could mean the end of administrative governance – the ways that the federal government provides services, oversees businesses and enforces the law – as we know it:

“Humphrey’s undergirds a significant feature of American governance: bipartisan administrative bodies carrying out expertise-based functions with a measure of independence from presidential control. Congress created them … out of one basic vision. It thought that in certain spheres of government, a group of knowledgeable people from both parties – none of whom a President could remove without cause – would make decisions likely to advance the long-term public good.”

If the Supreme Court officially makes the chief executive a unitary executive, the advancement of the public good may depend on little more than the whims of the president, a state of affairs normally more characteristic of dictatorship than democracy.The Conversation

Graham G. Dodds, Professor of Political Science, Concordia University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Does AI pose an existential risk? We asked 5 experts

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Aaron J. Snoswell, Queensland University of Technology; Niusha Shafiabady, Australian Catholic University; Sarah Vivienne Bentley, CSIRO; Seyedali Mirjalili, Torrens University Australia, and Simon Coghlan, The University of Melbourne

There are many claims to sort through in the current era of ubiquitous artificial intelligence (AI) products, especially generative AI ones based on large language models or LLMs, such as ChatGPT, Copilot, Gemini and many, many others.

AI will change the world. AI will bring “astounding triumphs”. AI is overhyped, and the bubble is about to burst. AI will soon surpass human capabilities, and this “superintelligent” AI will kill us all.

If that last statement made you sit up and take notice, you’re not alone. The “godfather of AI”, computer scientist and Nobel laureate Geoffrey Hinton, has said there’s a 10–20% chance AI will lead to human extinction within the next three decades. An unsettling thought – but there’s no consensus if and how that might happen.

So we asked five experts: does AI pose an existential risk?

Three out of five said no. Here are their detailed answers.

The Conversation

Aaron J. Snoswell, Senior Research Fellow in AI Accountability, Queensland University of Technology; Niusha Shafiabady, Associate Professor in Computational Intelligence, Australian Catholic University; Sarah Vivienne Bentley, Research Scientist, Responsible Innovation, Data61, CSIRO; Seyedali Mirjalili, Professor of Artificial Intelligence, Faculty of Business and Hospitality, Torrens University Australia, and Simon Coghlan, Senior Lecturer in Digital Ethics; Deputy Director, Centre for AI and Digital Ethics, The University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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There are now two appeals in the Erin Patterson mushroom murder case. What’s going on?

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Rick Sarre, University of South Australia and Ben Livings, University of South Australia

The Victorian Director of Public Prosecutions, who has carriage of the Erin Patterson murder case, has chosen to appeal against what he considers to be an overly lenient sentence.

This comes on the back of news last week the convicted murderer has instructed her lawyers to institute an appeal against her conviction.

These appeals could extend the life of the high profile case, or it could all quickly fizzle out. Here’s what’s happening now and what comes next.

From lunch to a life sentence

In September, Patterson was sentenced on three counts of murder and one count of attempted murder for serving a beef Wellington filled with poisonous mushrooms to guests at her home in regional Victoria in July 2023. It followed a lengthy, notorious trial.

Victorian Supreme Court Justice Christopher Beale ordered a life sentence with a non-parole period of 33 years. Given her age (50) and the time she’d already spent in detention, Patterson will not be eligible to apply for parole until 2056, when she is in her 80s.

The law typically gives both the prosecution and the defence 28 days after the sentence to lodge any appeal.

This period would have expired Tuesday October 7, but both legal teams have sought an extension of a further 28 days under a new process that came into operation (on a trial basis) at the end of last month. This allows for a total of 56 days (28 days plus the extended 28 days) if the initial notice of appeal is filed within the first 28 days.

This is what both teams are now doing, but for very different reasons.

Patterson’s appeal

Erin Patterson has a new team of barristers, not only high profile lawyer Julian McMahon, but also well known criminal law academic and writer Richard Edney.

Under the Victorian Criminal Procedure Act, any person seeking to appeal a conviction or sentence must first seek leave to appeal. This basically means permission to appeal.

The matter of leave is heard by a single judge of the Supreme Court. This judge will determine whether there is sufficient merit in the appeal grounds (reasons) to warrant convening a full hearing of the Court of Appeal.

The judge could grant such leave to Patterson to appeal against her conviction on any or all of three grounds.

The first is where the verdict of the jury is deemed unreasonable and not supported by the evidence.

This was the ground successfully sought in the George Pell appeal verdict, where the High Court determined his convictions were unsound. The High Court decided it was not open to the jury to find Pell guilty beyond reasonable doubt.

A second ground is that the trial judge insufficiently directed the jury’s attention to the defence case in the summing up. This is highly unlikely to be raised in the Patterson appeal.

A third ground is where there has been a substantial miscarriage of justice in the course of the trial. Typically this argument is based upon a defence submission that something has been allowed into evidence (by the trial judge) which should not have been introduced, or that something was not allowed into evidence (excluded by the trial judge) which should have been admitted into evidence.

One can strongly speculate that this is where the defence’s appeal submission will proceed.

The prosecution’s appeal

Either party can appeal the sentence. Thus the prosecution must also get leave to appeal from a judge to advance its case.

In this case the prosecution is now seeking to do so, and will need to submit that the sentence is obviously – not merely arguably – overly lenient.

As Patterson was given three life sentences (to be served concurrently), the prosecution will argue that a 33 year non-parole period (not unusual in cases of single homicides) was clearly inadequate.

It’s highly improbable the defence will cross-appeal the severity of the sentence, given it is at the lower end of what a triple murderer could have expected to receive.

What happens if the appeals are allowed?

If the defence appeal against conviction is allowed, the court may either acquit Patterson or send the whole case back for a retrial.

In the case of a successful appeal against sentence by the prosecution, the appeal court can either impose a longer non-parole period, or send the matter back to the trial judge for a re-sentencing.

There will be much to observe in the next phase of the criminal justice process. The first hurdle for Patterson is to get leave to appeal. At that hearing we will know for the first time where the appeal arguments are headed, and indeed, whether anything will further unfold.The Conversation

Rick Sarre, Emeritus Professor in Law and Criminal Justice, University of South Australia and Ben Livings, Associate Professor in Criminal Law and Evidence, University of South Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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