Tax is still a four-letter word
It’s a political phenomenon as inevitable as a Troy Buswell indiscretion. Mention tax and people smell a rat.
As the Rudd Government prepares to release the Henry Tax Review, new polling from Essential Research shows what a tough time our leaders face when they want to review the nation’s revenue base.
Sixty one percent of Australians say they pay too much tax while just four per cent say they way too little. And even when you offer to the fix the problems that people want fixed, the majority would rather have the dour status quo than pay more moolah.
Even with an issue as central as health where there is a broad consensus that government needs to improve services, the majority of people are not prepared to pay more in tax.
Even while we face up to an aging population who will be drawing more of the national income into pensions and placing more pressure on the existing workforce, the majority of people are not prepared to pay more in tax.
Even when economists tell us we need improved roads, rail and port infrastructure if we are to grow the national economy, the majority of people are not prepared to pay more in tax.
And so it goes.
National debt is an issue, but we do not see it as our debt. We bemoan the Chinese government buying our assets, but do not want to build our own national savings fund. And don’t try telling us that immigration is the answer to broaden the tax base, because we don’t want population increases either.
All of which leaves the government in an incredibly restrictive straight-jacket, which will require a once in a political generation circuit-breaker.
In 1998 John Howard set the seen for a decade of growth by defying political orthodoxy and introducing a new tax. He almost paid the ultimate price, but he had the courage to take a new tax to the Australian people – and one he had previously promised not introducing to boot. As someone who saw little of merit in the Howard era, the commitment to expand the tax base is something that you can not help but admire.
The Henry Review could provide a similar opportunity for the Prime Minister, particularly if he puts a bold new tax on the table in the form of a Resource Rent Tax.
The mining industry is already flexing its muscles bemoaning the billions of profits they won’t make if such a tax is bought in. What they are not saying is that this is a tax on super-profits that will only accrue once they hit pay-dirt.
And for a government facing re-election a fight with big mining companies could just be the way of reminding people why they voted Labor in the first place.
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