13 Aug 10 Preamble - Friday, 13 August 2010
Treasurer Wayne Swan and Shadow Treasurer Joe Hockey debated at the National Press Club this week (Monday, 9 August) and the event highlighted that in this election campaign, both sides of politics are saying as little as possible about tax reform. They talked about stimulus packages, waste and costings; they talked around tax reform and mostly avoided talking directly about it.
On Thursday, 12 August the Coalition released its tax policy statement, in which it promised a taxation green paper and white paper to enable further public debate and consultation on future tax reforms. Whilst having some positives, the policy is still not tackling the real business of reform. Encouraging a full and frank Australia-wide debate on the future of our tax system, ahead of seeking a second-term mandate for a comprehensive tax reform agenda is good, but it amounts to a plan to have a plan.
On the other hand, Labor's promises haven’t gone much beyond creating a tax system advisory board to oversee corporate governance and re-shaping the Board of Taxation. Those are worthy commitments that, in their own small way, would improve the administration of the tax system, but they're hardly visionary reform. In fact Labor has now rejected another five recommendations of the Henry Review - without anybody noticing. Last week's 'Reshaping the Governance of Our Tax System' policy document makes this clear and the recommendations all go to transparency or accountability issues. You can read more about this in my letter to the editor published in the Australian Financial Review on Thursday, 12 August.
The Coalition's policy statement also announced it was ruling out some 40 recommendations of the Henry Tax Review, which is on par with Labor's rule-out rate. Neither side of politics has enough commitment for the challenge of tax reform to risk ruling anything in. Please refer to the Taxation Institute's media release of Thursday, 12 August for further comment. The Australian Financial Review on Thursday, 12 August also reported the top tax issues in the election campaign as nominated by Taxation Institute members. As we reported in an earlier TaxVine, the ongoing uncertainty over the tax treatment of trusts has emerged as the top issue, with other issues including streamlining tax incentives for small business and reducing the number of state and local government taxes.
Please see below for details of other activities this week.
Robert Jeremenko FTIA