When burnouts get more attention than tax reform
Just a couple of days on the policy roundabouts of Canberra often seems like a fortnight, but sometimes it’s just not enough time.
You might have seen that the Gillard Government has lifted the lid on its long-awaited Tax Forum. It’s all about re-designing the way we collect, use and re-distribute wealth in this country.
To do that, it’s giving everybody the grand total of two days. Let’s put that in context.
Floriade is Canberra’s annual flower festival. It draws 470,000 people and lasts 29 days.
Summernats is the national capital’s annual street machine festival. Billed as “the Mecca for committed revheads”, it pulls about 100,000 people and runs for four days.
It’s unlikely many of the people fronting October’s Tax Forum will be into doing burn-outs or entering wet T-shirt contests (and to be honest most would be more at home among the roses and camellias.)
But they all wanted more than a blink-and-you-miss-it opportunity to rigorously put the tax system over the pits and do more than cursory tinkering.
The problem is that the Tax Forum risks being perceived as the policy equivalent of a suburban swap meet, where keen but often fashion-challenged enthusiasts will meet to exchange shop-soiled spare parts that they’ve already handled many times.
Last week a bipartisan group of 64 US senators wrote to President Obama and urged him to reform the tax system sooner rather than later.
Equally split between Democrats and Republicans, they were spurred on by their country being in the middle of a recession and wrestling with a $1.4 trillion deficit.
Economic circumstances are much brighter in Australia, although the ageing of our population is dragging us inexorably towards our own funding crisis of alarming proportions.
The number of Australians aged between 65 and 84 will double over the next 40 years and so will health spending. How we’re going to pay for that should be reason enough to get on with tax reform.
The Tax Forum won’t just be for policy people, union leaders and business chiefs. There will be public input, managed via uploading of submissions to a website.
While the value of asking Joe and Joanna Public for their opinion should never be under-estimated, neither should the opportunity to properly pick the brains of 150 specialists.
The danger is that few in the avalanche of uploaded submissions will address the structural issues that could make our tax system simpler, fairer and more transparent - and that a small army of public servants will go snow-blind reading them all.
The Government should set its anointed 150 Tax Forum attendees a mountain of pre-event homework. It should organise their expertise into sub-committees so they can do some hard yards before assembling in Canberra.
Instead, it will corral them in a large room and talk about The Big Picture when the reality is that substantive parts of it will have already been dealt with (carbon tax) or be largely off the radar (GST).
The biggest message from the Henry Review is that there are 125-plus taxes being paid by Australians, yet 90 percent of our revenue comes from just 10 of them.
That means there are more than 100-plus taxes that are less than efficient. Many are as useful as a bell on a bee.
A previous Government once staged a two-day conference in Canberra. It was called the 2020 Summit. If you’re struggling to recall a significant reform that resulted, you’re not alone.
The lunchtime sandwiches won’t be the hardest thing to digest at the Tax Forum. It will be the missed chance to make serious inroads to reforming a tax system that could be the world’s best.
*Robert Jeremenko is Senior Tax Counsel for The Tax Institute, Australia’s leading professional body on taxation.
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