Mr Turnbull raises a key issue:

"Every aspect of Government policy, be it tax, welfare, corporate regulation or workplace relations, should be tested at least by these questions:

* Is this policy making it easier and more attractive for people to go to work?
* Is this policy enabling Australian workers to be more productive?
* Is this policy promoting or assisting the formation of Australian families?

Any policy, any law, which does not receive a “yes” to all questions should require a very powerful countervailing argument to remain part of our national agenda."

What he should go on to say is that every single destination of our tax dollar should receive the same treatment. "Any item of government spending that does not receive a 'yes' to all questions...."

How about a conscientious and sober examination of the sink-hole aspect of our tax system? Every pettifogging bureaucratic concept that has ever been dreamt up, we pay for and will continue to pay for, unless and until someone cries "stop!".

When did you last hear a politician advocate "small government"?

Successive governments have built a system that is not only self-perpetuating, but has an inbuilt growth engine. Once established, a government department has no chance of being disbanded - which of course would have to happen if the objective is to implement an "it has to have value to the taxpayer to survive" agenda.

Just tinkering with the "who pays what" aspect of taxation is to lose sight of the underlying problem: we pay vast chunks of our tax just to keep wasteful armies of public servants in pay and perks.

It is probably prophetic that Mr Turnbull also said "[a]s practical people we should judge our leaders, in whatever field, on output, not rhetoric: on substance not process."

Sounds a bit like an instant epitaph.

Well done on the EMTR's. I know this well as I'm on a disability pension and have to consider these carefully. ANother perhaps overlooked factor influencing the EMTR heavily is that renters of public housing pay according to an average of 25% of Gross income (NSW). Salary sacrificing cannot be used to reduce the gross as they ask you did you have salary sacrifice you are obligated to tell them, and tell the truth. As your rental payments go up, that may be another disincentive, unless you are a worker on a high wage there is only a little bit extra in it for you after working when you take out of your pay the higher rent that is charged. I'd like to see someone write a paper, on the work incentive effects of income-based public housing rentals.

By way of background, I never had an opportunity to enrol at a University due to family and broken home reasons, despite my HSC equivalent aggregate of close to 90.

For a DSP recipient, the increase in rents under state housing arrangements adds about 15% to the effective tax rate otherwise applying.

I probably should say 15 percentage points. For example, if the ETR was otherwise 30%, it would be 45%.

I would agree with Malcolm Turnbull’s three questions regards policy reform:-

· Is this policy making it easier and more attractive for people to go to work?
· Is this policy enabling Australian workers to be more productive?
· Is this policy promoting or assisting the formation of Australian families?

Perhaps such questions can be the basis for the Family Impact Statements that were talked about during the last election, and again mentioned by the Hon Kay Paterson in a speech at a recent AIFS conference. http://www.facs.gov.au/internet/minister1.nsf/content/aifs_families_matter_9feb05.htm

1. Pericles has it exactly right and Turnbull (possibly inadvertently) said it in several places around his article. Are we getting value from existing government programs or is it government policy that once a program or department is in, it is there there to stay, even if it is not creating value?

We need to look at all government programs, not just the new ones, and make sure they are meeting the goals that we are paying for.

2. The talk about national income is not the same as prosperity.

"Our prosperity, our “national income”, is a function of three factors: population, participation and productivity."

India's "national income" is five times larger than Australia's. Does the average family in Australia hope to move to India to enjoy more prosperity? Australia's per capita income is ten times higher than India's. That is the mark of economic prosperity.

It looks like Malcolm Turnbull sees Australia as a big corporation. If he can increase the number of workers and consumers, then the big corporation will have a higher "national income." It does not matter if the average worker's life gets tougher, as long as the "national income" goes up.

We need government that looks after the justice system, the environment, and the health and education systems. Are those on Malcolm Turnbull's agenda or is it all about building the "national income?"

"... the legitimate claims on Government for health care, pharmaceutical benefits, aged care and pensions and the like..."

No! No! No! Such claims on government are, in reality, claims on the taxes that are forced upon other citizens. In effect you are saying that you support an aged person being entitled to steal from a younger person.

Until governments get out of the business of trying (WITH LITTLE SUCCESS) to run the lives of individuals we will not achieve a just society.

A test that seems to be applied now is whether 'the policy is enabling public money to be transferred into private hands'. That certainly seems to be one of the driving motivations of this government, and the pace will quicken as the front bench and their mates start to sniff a defeat in the wind. It is time to nail down every public service or asset that isn't already finessed into the control of those who already have too much. Thus you get the Medicare safety net for the well-off; endless tax concessions that only smart lawyers and accountants know how to exploit; tertiary education for those that can afford it; grants to resource-rich schools; and so much more that it is tedius to recount. What we need desperately is a government that genuinely governs for all and not just the mortgage belt wannabees and the legions of tax avoiders in Wentworth.

Just gotta love your argument Mal. A more productive workforce means higher wages in this govt? Go check out the next IR reforms this govt is proposing. And their next scream about how the "Living wage sends us broke" Such a yearly yelp. Fertility, go forth and procreate?! But only in Australia mind you. Save a bundle on IVF treatments a'la Tony Abbott. Meanwhile, let's not make it any easier for adoption and skilled asylum seekers. This govt is all about saving money whilst a lot live on bread and jam. We are the one of the most highest taxed countries in the western world, but it is not reflected in our schools, hospitals, social and welfare services. Don't use "global economics' and then refer that onto Australian families.

And since when did "divorce" discourage procreation?

One thing that really annoys me is that you want us to produce "the next generation of skilled wokers" but god forbid, they come from a single mother on welfare! What do you want, bloody Madonnas!

I'm sure that Malcolm Turnbull is very intelligent. Perhaps he will be PM one day.

But after reading his article, I still do not know *what* tax changes he is proposing. There is no mention of negative gearing, trust funds, or the medical rebate.

Does he want to get rid of the tax free threshold? I've no idea.

If Mal wants to be taken seriously, as well as saying what is wrong ... he needs to tell us explicitly what changes would improve the system.

Look the solution to this demographic problem is easy.....
Logans Run.
:-)

remember anything you don't like this gov does blame Qld and Vic they gave them the numbers in the upper house.

I earn above the average and I certainly pay the top tax rate. My EMTR is about 80% because I have a family and thats just how the tax system works (Family Tax Benefits etc).

High EMTRs are not the preserve of low income workers. I now have one days unpaid leave each week to avoid earning too much. What a perverted system we have created

Well,I've said a lot on this topic in the past.We need a serious overhall of waste in the Public Service.Over the next 15yrs the Federal Govt must find $130 billion to pay for retiring Public servants.Why wasn't this money put aside over the last 35yrs so it wouldn't be such a burden now?This averages out at $1 million per retiree.Now we have all the State and Council Public Servants to pay out.This is one of the reasons why they have to sell Telstra.

We have no choice,there must be tax and welfare reform,but have they considered also Govt and Public Service reform also to stop the wanton waste,duplication,red tape and other burdens on business?

This NSW Govt has really lost the plot.It is not only taxes but rules ,regulation,industrial relations,workers comp etc.It is actually destroying business activity.NSW makes up 40% of the Aust economy,and if we go under,so does the rest of the country.

I wish Malcolm well since the task seems impossible.It seems to me that Govt as always, will react too late.

Who pays for better environment standards?
A richer country has a better chance of doing that, provided it is not taken from the environment by the public wanting higher personal consumption, as happens in Australia.

I do agree, make a “free” social benefit available, and people soon regard it a “right”
They then start demanding more or want to restrict those that pay much more tax from receiving those benefits.

They then complain about this group getting much higher incomes they have achieved to support them selves and the higher tax they have to pay.

Negative gearing is just being able to claim a proper business expense as a tax deduction. The higher the tax rates, the greater the attraction for people to purchase a long term capital gains, with a short term loss. Let’s look at the tax rates to stop it then.

A tax and welfare system, that is as complex as ours, must be based on some mayor “flaws”.

Flaws need more regulation to cover them up, which need more flaws to cover them up, and so it goes.

The GST has some major flaws;
• To many exemptions
• Included in the CPI.

Reduce the exemptions, and it will take much less time and regulation, lowering cost while raising more tax. Difference to most people would be not a lot as you would be paying a “lower price” plus tax.

Having it included in the inflation means that the domestic regulated labour market actually ends up getting a pay rise equal to the tax.
Inflation and wages trends are running parallel, strongly suggesting that they have received incoming funds equal to the outgoing GST tax.

I ask how system like that work can.

Remember the GST was finally going to fix the TAX system?

The truth is that fixing the TAX system is far easier then politician are willing to admit to. After all, if they were representing us they did not need 9 years to talk about it and end up –despite the GST- to make it worse.

No good to blame people getting older as becoming a liability. After all, they paid their taxes for old age!

Lets have a look at politicians; They spend 12 years in Parliament and have the rest of their life superannuation, even if leaving Parliament at age 30!
Now, their payments are a lot more then that of the average pensioner. Just that Federal Politicians actually haven’t got any constitutional entitlement to their form of superannuation! After all, they are only allowed to get an “allowance” for the time they are called away from their normal daily job to attend to the parliament, as a compensation for lost income. Actually, the Governor-General neither is entitled to the superannuation arrangement, or for that past Governor-General’s or any federal minister of the Crown, as they were/are employed by the Monarch (the Queen) and it is the Monarch who is to pay their superannuation, if the Monarch desires to do so!

You see, we could save a lot of taxes being collected, just by doing things appropriately within constitutional limits!

Now, if you consider matters what is appropriately constitutionally, and get rid of all unconstitutional Federal parliamentarians superanuation payouts, then we may save billions!

See also my website http://www.schorel-hlavka.com for more constitutional issues. (Just it takes time to download the page because of the volume of material on it.)

It doesn’t matter which political party is in power they all push the same con-job argument to make it better for us, just that in the end they rob us more then the one before!