The National Australia Bank (NAB), one of the nation’s “big four” banks, has issued a stark warning that Australia’s tax system is exacerbating generational inequality and putting the country’s long-term competitiveness at risk.
According to NAB, younger Australians are on track to shoulder a staggering $682 billion in income tax over the next decade, even as older generations benefit disproportionately from savings, investments, and superannuation tax concessions.
In a detailed submission to the Productivity Commission’s Five Pillars inquiry, NAB CEO Andrew Irvine urged the government to modernise its tax structure: “The aim should be to broaden the tax base, attract investment, reduce reliance on income tax, and eliminate taxes that produce negative economic outcomes.”
Irvine argued that a century of consistent improvements in living standards has ground to a halt: “Productivity has plateaued, and our quality of life and global competitiveness are under threat.” Parliamentary Budget Office forecasts show income tax rising from 47.7% of government revenue today to 53% by 2035, while indirect revenues and business contributions stagnate. The report further highlights that older Australians—drawing income primarily from investments—are insulated from bracket creep, leaving working-age Australians to carry an outsized load.
The bank also linked tax pressures to Australia’s worsening housing affordability crisis. Irvine warned that without reforms, the dream of home ownership will slip further out of reach: “Australia is not building enough homes to guarantee affordable housing for all Australians, let alone sustain the dream of home ownership for future generations.” NAB recommends simplifying housing approval processes and accelerating construction of affordable homes in areas where demand is highest.
In addition, NAB raised concerns about the country’s spiralling energy costs, which are stifling manufacturing growth. Irvine emphasised the need for a balanced approach: “Australia must accelerate the rollout of renewable generation, transmission, storage, and system services, while recognising the key role of gas in providing firming capacity. Stable, reliable, and affordable energy—delivered in a way that balances environmental, social, and economic priorities—is critical to sustaining growth.”
NAB’s intervention adds significant pressure on Treasurer Jim Chalmers and the Albanese government as calls mount from economists and business leaders for bold reforms to ease the financial load on younger Australians, stimulate investment, and secure the country’s future prosperity.
