MYEFO: good time to unlease tax white paper

With the Mid-year Economic and Fiscal Outlook (MYEFO) only a few weeks away, it is a timely reminder that tax reform is essential if the structural problems with Australia’s budget are to be fixed, says the Institute of Public Accountants.

“No amount of cost cutting will fix the budget; we have to take a balanced, holistic view, looking at both the revenue and expenditure sides of the ledger, including maintaining an optimal tax to GDP ratio.  Therefore, a mature debate on tax reform is urgently needed,” said IPA chief executive officer, Andrew Conway.

“The promised tax white paper cannot come quickly enough if we are to get the economy back on track and tax reform represents one of the most effective levers that the Government has at its disposal to reinvigorate economic growth.

“This will go a long way in addressing Australia’s productivity crisis.

“There is much speculation over GST in terms of broadening the base and the percentage level and it needs to be on the table for debate if we are to get the tax mix right.

“The Henry Review was hamstrung by not allowing GST to be included in the terms of reference and true tax reform needs to consider the whole picture, not just segments.

“Australia is currently shackled with a plethora of inefficient and regressive taxes which is stifling growth.

“It’s surely time to review this position, have the tax reform debate and get the tax mix right that will support business productivity and competitiveness,” said Mr Conway.