Tax reform is officially on the Australian agenda for next year.
In an interview with James Massola published in Fairfax Media, federal Treasurer Joe Hockey has set out some signposts on what we can expect as the government tries to wrest back its authority on economic management.
Here’s the key quote:
I think it is hugely important that Australians participate in a conversation about what we want our nation to be over the next 30 to 40 years and the intergenerational report, which we will release in February, gives us a national platform.
The taxation discussion with the Australian people next year will not be about increasing the revenue take for the Commonwealth, it needs to be how we can have a taxation system that makes us a more efficient and productive nation, and is fairer for all Australians.
The government has so far been unable to ignite the reform conversation after cornering itself with promises of budget surpluses, which have impact in the political cycle but are a false indicator of economic health when outside forces are dragging on growth.
But over the long term, the government does need to be able to show it can live within its means, and significant tax reform is necessary in Australia to get there. This is something that’s well understood in economic and finance circles at the moment – but not necessarily beyond that.
It now looks like the government is going to try and address this gap next year.
The Prime Minister delivered a speech earlier this year about federation reform which, looking back now, might have been an initial attempt to start the debate about taxation reform. But it was painted by Labor as a veiled threat to increase the GST, and the issue disappeared.
Hockey’s comments signal they’ll be be having another crack at starting the conversation.
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