Tax forum puts carbon tax, GST on agenda, but experts say two days still not enough
Experts have welcomed the Government's ambitious agenda for the October tax forum, which will focus on workforce participation, productivity, improving standards of living, fiscal management and shifting to a low-carbon economy, but say two days is not enough to tackle Australia's complicated tax system.
"Tax reform in two days, tell them they're dreaming," says Robert Jeremenko, Senior Tax Counsel at the Tax Institute.
The Government says the forum is designed to hear from "all parts of the Australian community about the future of our tax and transfer system" and seeks to improve its strength, fairness and simplicity.
Invitees to the forum, to be held on October 4-5 at Parliament House, include tax experts, business groups, trade unions, welfare organisations, academics, students, and state and federal politicians.
The Government won praise for including the hot-button topics of the carbon tax and the GST on the agenda, but experts says the breadth of the 42-page discussion paper demonstrates that two days is inappropriate.
"The participants will be able to speak about whatever they like," Jeremenko says, adding that two days is better than no forum at all.
"But how something tangible can come out with that many voices, we'll have to wait and see."
"It's just one step in what should be a much longer and strategic in how we might address tax reform."
Paul Drum, business and investment head at CPA Australia, says the broad-ranging paper is encouraging and "provides enough scope to cover the things that need to be covered."
"We've known from the outset that two days won't resolve tax reform, but the way the paper is framed it enables the right kind of discussions to be subject, subject to the way the event is being run," Drum says.
Drum says what would really take the cake is a plan detailing the things that need doing over the next 10 years, irrespective of which party is in power.
The discussion paper says while the resources boom means that "Australia as a whole is getting richer, the strong exchange rate associated with the high demand for our resources is impacting negatively on some industries and regions."
"The mining boom provides us with an opportunity to ensure that the living standards of all Australians continue to rise, that we share the benefits of prosperity and do not leave some Australians behind," it says.
Among the questions suggested for discussion were:
- Are there ways to further simplify business interactions with the tax system, especially for small business?
- What is the appropriate business tax system for Australia to maintain business tax revenue and economic growth?
- Are there ways to reform the business tax system that can assist Australia to meet the challenges of mining boom mark II and make the most of the opportunities from the shift in global economic weight from West to East?
- Should the company tax rate be lowered further, and if so, what other reforms within the business tax system might be used to fund this?
- At the state level, are there opportunities for the States to rebalance their tax systems towards more efficient revenue bases?
- Are there aspects of other tax arrangements that create unintended incentives for adverse environmental outcomes, or ways in which governments could use specific taxes to ensure that people take appropriate account of environmental impacts in their decision-making?
- Should the Government pursue the development of online tax and transfer client accounts?
- Are there ways to further reduce any disincentives to workforce participation?
- Does the tax system provide the right support to Australians who locate to the areas where their skills are most in demand?
- Should consideration be given to moving towards a more neutral and consistent tax system for savings?
- Are there opportunities to improve efficiency in the housing market with alternate tax settings and policies?
- Are there opportunities to improve the rules for superannuation during the drawdown phase?
- Are there unintended or inappropriate concessions in the transfer system that could be removed to help fund priorities elsewhere?
- Are there opportunities for the States to replace stamp duties on property conveyances with reformed land taxes?
- How might the reform or greater harmonisation of state payroll taxes be pursued?