Tax Counsel Report
The Great Tax Debate started with a bang. A solid turn-out of attendees with depth and breadth of experience and understanding waited eagerly to hear the ideas pour in from our speakers.
Senator Cormann took the stage and seamlessly started making jokes, and continued on to outline his philosophy and recommended process in relation to tax reform. The Senator reminded us again that layer upon layer of legislative change only adds to complexity, and a clean out is necessary if the system is ever to become simple and user-friendly.
Not to be outdone, key Independent MP Rob Oakeshott stepped up to talk about the need for a functioning tax system and revenue generation, and reminded us that he wants to see real commitment from the Government on this issue. He urged Australia to "stop looking at the bottom of our schooner glass and whinging about everything." Said Mr Oakeshott, "Let's get into it." The Tax Institute couldn't agree more.
After a little grilling from ABC Lateline's Ali Moore, our facilitator, the politicians stepped down to give way to the wise elder, Greg Smith, a former Henry review panellist who noted that tax reform needs to occur hand-in-hand with other major, necessary structural reforms - the Federal/State Government fiscal imbalance needs to be rectified, along with the welfare system. Tax is a policy and revenue generation tool, he reminded us, not an end in itself. The Australian Financial Review, SMH, Daily Telegraph and the Australian were as taken with Mr Smith as attendees were, and rushed to write all about it. Daily Telegraph readers started an avalanche of online comments on the issue. At the back of the room, ABC and Sky News jostled for space to park their cameras.
By this stage, web watchers had started to email and tweet the streaming URL to each other, and more and more were tuning in.
Greg's measured words of wisdom were followed by Henry Ergas from Deloitte Access Economics - with targeted focus on the distortionary effect of taxes, the need to consider the tax and transfer systems separately and the need to address the fiscal imbalance, Henry turned the minds of attendees inside out with wild notions that seemed, from an economists' view, undeniably attractive.
After a light bite in the afternoon sun and an indulgent bite of dessert, attendees reconvened to be taken right back to the start... all the way back to Adam Smith, the father of economics by Adam Creighton, the Centre for Independent Studies' Economist. Tracing through the centuries, Adam took us all on a journey through the liberal perspective on taxation, and threw in some ideas from his wider experiences. Adam suggested that the answer is to give States back some autonomy, and hold State Governments accountable for the spending of their generated revenues.
Cassandra Goldie, CEO of ACOSS disagreed - efficiency must be considered in light of equality, she said. The transfer system is too hard, too arbitrary, has not been thoroughly reviewed for far too long, and needs a thorough spring clean, and while we're there, we need to consider how tax reform may affect lower income earners, said Cassandra.
All in all the speeches were a success, and after tea the speakers, joined by our own Senior Tax Counsel, Robert Jeremenko settled in for the panel debate - a range of issues from State Taxes, increasing the rate of the GST and shifting the focus from income tax to consumption taxes to the need to consider the impact of tax on housing affordability bounced around the panel, with expert guidance from our facilitator, as our web streaming audience climbed steadily to peak at over 350!
The day wound down with talk of where to from here - the speakers, and The Tax Institute will now consider the range of views expressed at this event going into the Government's Tax Forum in October with a view to driving a reform agenda. We are of course keen for your input in doing this - if you have ideas you'd like to contribute, please don't hesitate to post them on our blog or to email us directly at TaxPolicy. You can also find us on twitter (@TaxInstituteOz).
