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11 Mar 11 Preamble - Friday 11 March 2011

It is a fortnight since the Government announced its plan to introduce a carbon tax on 1 July 2012, before moving to a cap-and-trade emissions trading scheme some years after that.  What is most noticeable about the announcement, however, is the lack of detail accompanying the plan.  At what level will the tax be set?  Which sectors of the economy will be phased in?  What levels of assistance will exist for both households and industry?  What support will there be for low emissions technology and innovation?  The Government has declared that this year’s Budget in May will not include details or revenue/expense figures for the announcement. 

Is this the way we can expect reforms to be handled in the ‘new paradigm’ Australian Parliament?  Last year, in gaining the support of the independent MPs, the Government promised a Tax Summit to be held by 30 June 2011.  Unfortunately, we haven't heard any further detail.  What will be covered and through what mechanism will the key issues be brought to the table?  Who will be involved and when will they have to make space in their diaries?

The real surprise is why we are talking about a carbon tax without debate about broader tax reform.  We need a debate about the tax reform potential of examining the rate and base of the GST, to be able to afford the abolition of some of the most inefficient and worst designed taxes in Australia: state taxes like stamp duties.  Let’s discuss the resources tax; let’s discuss a carbon tax in the context of the appropriateness of road user charging.  There are so many areas in the Henry Tax Review alone that are ripe for further, detailed discussion.  As always, I’m interested in your thoughts.  What do you think?  Please email us at Tax Policy.

Please see below for other activities this week.


Robert Jeremenko FTIA

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