Community's role in tax reform

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					 For further information about
 tax issues, TaxWatch and the
 work of the Community Tax
 Forum see:                                                Community’s role in tax
                                                           Professor Julian Disney | Convenor of TaxWatch and
                                                           Chair of the Community Tax Forum

                                 In the middle of last year, the Rudd           be easier to make if they are seen as
                                 Government announced a comprehensive           likely to boost the stimulus for recovery.
                                 review of the tax system by a Panel to         They may even be made before the
                                 be chaired by the head of Treasury, Ken        Panel reports. Others, however, may be
                                 Henry, and to report by the end of 2009.       rejected for fear (perhaps misplaced) that
                                 Its work is likely to have a major long-term   they could delay restoration of business
                                 impact on the opportunities and support        confidence.
                                 which will be available for low-income
                                 and other disadvantaged Australians.           The crisis will inevitably reduce tax
                                                                                revenue very substantially while also
                                 The Panel includes the head of FaHCSIA,        increasing the need for government
The economic                     Jeff Harmer, and its terms of reference        expenditure, especially to help the
                                 include ways of improving the “tax and         hundreds of thousands of people who
crisis will inevitably           transfer payment system for individuals        lose all or most of their work opportunities.
reduce tax revenue               and working families, including retirees”.     This makes it even more important to
                                                                                remove major avenues for tax avoidance
substantially while              The other members are a former                 and wasteful tax breaks for wealthy
                                 Treasury official, an economics professor      people that have eroded public resources
also increasing the              and the head of the Australian Industry        as well as aggravated over-borrowing
                                 Group, Heather Ridout. The composition         and speculation.
need for government              of the Panel for such a wide-ranging task
expenditure,                     is somewhat surprising, especially the
                                 lack of anyone with experience in the
                                                                                History shows that reforms are often
                                                                                more effective, and more politically
especially to help               community sector and expertise in the          achievable, if they are part of balanced
                                 social impacts of tax and transfer policies.   and integrated packages. For example,
the hundreds of                                                                 some measures which cost money can be
                                 This imbalance prompted establishment          combined with others that save it. Some
thousands of people              late last year of a Community Tax Forum        groups of people that may be adversely
who lose all or                  by the major national organisations from
                                 the welfare, union, environment and
                                                                                affected by one measure can be assisted
                                                                                by another element or at least placated
most of their work               consumer movements (ACOSS, ACTU,               by a measure which they acknowledge
                                 ACF and the Consumers Federation). The         as worthy even if it does not help them
opportunities.                   Forum is holding national symposiums           personally.
Description: [...] the design of its tax proposals is likely to be affected by their possible interaction with transfer initiatives. [...] views put to the Panel may influence government decisions which are made prior to its report, especially as its two public service members would inevitably be closely involved in any such decisions.
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