Business Council CEO gives Joe Hockey a Spray on Reform

Nic Crowther
Fri 17 Jul

Well, it looks like we can hang up our coats and forget about any meaningful move towards tax reform. Sure, the Government’s Tax White Paper is still dangling out there in the breeze, but increasingly it looks like a meaningless document that will fiddle around the edges rather than look at any meaningful reform.

Catherine Livingstone, CEO of the Australian Business Council has clearly had a gutful, this week slamming both sides of Parliament via a fiery statement issued this week.

"Yesterday marked a low point for political leadership in Australia… At a time of great economic uncertainty, Australia needs and deserves strong leadership, and the opportunity to discuss reform options as a community.”

A quick review of the last four or five days – particularly Treasurer Joe Hockey’s appearance at the Tax Summit, reveal the source of these frustrations.

This week, Treasurer Hockey attended the PWC Tax Reform Forum and observed that any change to the GST was a, “lazy approach to tax reform.”  Given the flawed implementation of Australia’s consumption tax, this is extraordinary stuff.


New Zealand, a country whose economy is doing very nicely thank you very much without the need to dig holes everywhere, has a GST rate of 15% that captures 96% of the economy, Their top income tax rate is 36%. In Australia, our piddling 10% is applied to only 47% of spending. How Mr Hockey can suggest that addressing this issue is ‘lazy’ is at best surprising.

Anyway, thanks to the Treasurer dumping responsibility onto the states rather than leading the conversation, we can forget about that one for a while.

Negative Gearing? That issues was also placed in the too-hard basket this week. Why bother with addressing the problem of housing costs in the major capitals with a long-term strategy when you can simply retreat to the position of “Well, when the other guys tried it, it didn’t work.”  Scratch another big-ticket item, then from the Tax White Paper.

How about discussion on a price on carbon emissions? Dream on. Clearly the plan is to stick to an anti-free market ‘Direct Action’ plan rather than embracing a model loved by economists around the globe.

Superannuation? See ‘Negative Gearing’ above.

So, put that all together, and the major issues for Australia’s taxation system are effectively all off the table. Strap yourselves in, Australia. It looks like nothing is going to happen.