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23 May 14 Preamble – 23 May 2014

Given the negative public reaction to Treasury Joe Hockey’s first Budget, are there implications for the proposed Tax Reform White Paper?

The Government sees itself as being strong and responsible and prepared to take tough decisions now to get the country back on track. A noble cause, no doubt, but the key to public acceptance of the Budget and its measures is a clear narrative and a well-argued and relentless sales pitch.  

The previous Coalition Government learnt this with the A New Tax System reform package that included the GST.  John Howard and Peter Costello were able to convince voters of the overall merit of the ANTS package by being across every detail and being relentless in constantly communicating the need for the changes, whilst acknowledging the effect on the voters. 

So with the promise of a Tax Reform White Paper, is the current Government starting to rethink the merits of embarking on the journey of this much needed public debate about reforming our tax system?

Whilst there is no evidence of any rethink, I am certainly urging them not to blink in the face of the fallout from the Budget.  This is especially so given that the Budget mainly tackled expenditure, without committing to a clear timeline in which to address the other crucial half of the equation: revenue.

The Government could do worse than taking a leaf out of the Howard/Costello playbook on tax reform.

Kind regards

Robert Jeremenko CTA