Think HBR

From the Editor

HBR clip
With Malcolm Turnbull seemingly ruling out changes to the GST, the real question is what if anything, is the Government planning in the form of tax reform.
There is no doubt that the Australian economy is in dire need for tax reform, and has been for many years.
Since the introduction of the GST in 2000, there has been little real reform.
Studies continually show that the economy is burdened by a wide range of taxes that are inefficient and inhibit economic growth. Forward budget forecasts are showing a deteriorating position and with relatively low wages growth even the old budgetary saviour of income tax bracket creep has been minimal.
At some stage we will have to face the truth that we must change the income side of the Federal budget and/or reduce Government services.
The tax reform debate has been going on for years but in many ways has not really started. There are few politicians that seem willing to truly debate the merits of reform – seemingly unwilling to take the political risk and more content to put it in the swelling “too hard basket” for someone else to look at in the future.
We are in dire need of intelligent, fact-based discussion of tax reform to improve our economic competitiveness and to put the budget on a much firmer position for the future.
We need to face the realities of Government funding.
Without massive spending cuts, tax reform must involve the abolishment of some tax concessions and/or increases in some forms of taxation. Any increases in taxation should come hand-in-hand with cuts or removal of the most inefficient and damaging taxes.
Do I want to pay more GST? Of course not, but a tax reform package must be looked at in its entirety. Perhaps the pain of more GST is worth it in a true comprehensive tax reform package that offers a range of positive outcomes.
At the moment there is no evidence that either side of Federal politics is really willing to take on the tax reform issue.
It is easy for Bill Shorten to run a fear campaign against a GST rise, even when it hasn’t been decided upon. What would be more constructive is if he came out with some well thought out alternatives in a package.
And with Malcolm Turnbull seemingly ruling out a rise in GST, before it was properly debated, we are left to wonder where the tax reform debate is headed.
It is really crying out for more politicians to show true leadership and to drive the debate and build a tax system that is more suited to the 21st century and one that will help drive our economic growth and fiscal position for years to come.
Garry Hardie
Publisher & Editor