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The Forum > Article Comments > Reflections on last week’s ‘tax forum’ > Comments

Reflections on last week’s ‘tax forum’ : Comments

By Saul Eslake, published 17/10/2011

But the history of tax reform also tells us that events like the one held in Parliament House last week can serve as starting points for far-reaching tax reforms when circumstances subsequently become more propitious.

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Unfortunately Saul I, and Ken Henry, do not share your opinion that anything new came out of the tax forum. Nothing was stated that had not been said previously, and all that eventuated was a "wish list" from the treasurer.

This was put together so that Rob Oakeshott could pretend to have achieved something.
Posted by Shadow Minister, Monday, 17 October 2011 8:06:03 AM
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Saul Eslake,

To me, taxpayer, last week Tax Forum was a waste that will only increase my tax-bill.

Travel, accommodation and sundry expenses for all delegates, undeniably, are for me to pay.

This not a reflection, it is a fact that no words can reverse.
Posted by skeptic, Monday, 17 October 2011 10:22:38 AM
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Saul Eslake understands tax reform and "Shadow Minister" obviously doesn't. Who said anything new had to come out of the Tax Forum?

Ken Henry has laid down extremely valuable targets, including the abolition of 100-odd inefficient and costly taxes that raise little revenue. It's a painstaking process, and, as Saul Eslake says, trying to implement them overnight "would make life very difficult for any political party which sought to take them on".

If the history of the Aspery Cttee, etc., is a guide, we'll eventually get there, but hopefully sooner rather than later.
Posted by freddington, Monday, 17 October 2011 10:23:21 AM
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I'd say your article is generally a sensible analysis Saul; the tax forum was worthwhile. Nobody expected radical new things to come out of it; heck, the current government has already done enough tax reform for one term.

I also agree with your suggestions of changing negative gearing, capital gains thresholds and tax on superannuationg. These are all current tax breaks for the wealthy. A government with any 'balls' should reform them, but they would have to learn how to sell policies better than either party is doing at present.

I'm surprised though that you didn't achnowledge that the legislation just passed in the Lower House - carbon price and raising of the tax free threshold - is in fact the most significant tax reform since the GST (and in my opinion long overdue).

In hindsight it was a mistake by Labor to couch the carbon debate in any other terms. regardless of whether it's levied as a tax or cap and trade scheme it's still a tax reform. Either way money is paid by some sectors to the Government which then distributes the revenue - i.e. it's a tax, but a progressive one because it is effectively 'revenue neutral'.

Incidentally I think we'll see a time when industry and the electorate will both wish it had remained a tax (rather than becoming a cap and trade scheme as planned after 3 years). A tax together with the carbon farming legislation will give certainty and keep all carbon money circulating in our economy rather than some going overseas to buy carbon offsets, which are often of dubious value.

I think history will judge the current government well (unpopular though it is) for bringing in these reforms.

There is some patching up to do yet, bringing in those sectors that are effectively carbon tax exempt like transport and trade exposed emissions intensive resource industries. But I accept that politics will always be the art of compromise. Gillard does this rather well. She and the the current 'coalition' know further reforms will have to wait until public awareness is raised
Posted by Roses1, Monday, 17 October 2011 12:09:23 PM
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freddington,

Logic not your strong point? First you claim without basis that I know nothing of tax reform when I haven't commented on reform, then you say "Who said anything new had to come out of the Tax Forum?" which actually concurs with my point. Why on earth have a meeting at which nothing is achieved?

A two day "tax" forum where everyone restates their positions does not achieve any movement towards consensus or problem solving. This meeting was not about tax reform, only window dressing.
Posted by Shadow Minister, Monday, 17 October 2011 1:05:11 PM
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No more taxes to feed corporate profits.Make the RBA the lender of first resort so we don't have to borrow our productivity and inflationary money into existance.TAX,TAX TAX,that's all you think of Saul.
Posted by Arjay, Monday, 17 October 2011 4:27:42 PM
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May I contest the old economist shibboleth that tax reform should be revenue neutral. Rather than winners and losers in any tax reform, we can have winners and winners if the inefficiencies are taken out of the system, and motivation is restored. Treasury has steadfastly refused to not only model the spending tax proposal proposed in my book A Diet of 2% published in 1985, but they have not deigned to comment on the comprehensive economic model we carried out through Unisearch operating out of QUT in Queensland, where we dissected the Australian economy over two 3-year periods, tax by tax, sector by sector and state by state. See my second book, Your Future in Your hands. We proved a simple spending tax at only 2% (the broader the base, the lower the rate) could replace 9 major, inefficient and discriminatory profit based taxes with benefits across every sector. By funding government with a tax on the exchange of ownership of goods, services, property and labour (paper trail a simple invoice and receipt), the cost of government would be slashed by most of the huge churning taxes in the system, and by introducing the new system through a simplified BAS at 2% (no refunds, no exemptions, no demarcations, no penalties for success) and returning the excess taxes to the employer and maintain existing take-home pay at current levels, employers could do two things 1) reduce the cost of the goods and services they provide to increase the spending power of the take-home pay, and 2) employ more people. For some reason, Treasury chose to confuse this with a Bank Transactions tax - a demonstratively hopeless proposal. It is nothing of the sort. When will this proposal be openly and honestly debated at a proper tax summit?
Posted by John McRobert, Tuesday, 18 October 2011 9:12:36 AM
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John,

They could even fund tax reform by cutting down on wasteful spending. Now there is a novel idea for Labor.
Posted by Shadow Minister, Tuesday, 18 October 2011 12:04:08 PM
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