We got this email from a sharp subscriber yesterday: “A lazy Treasurer or a canny one? Why would Cossie be interested in talking about sweeping and dramatic changes to the income tax system when Howard will end up taking all the credit? Much more sensible to save something that is going to be almost universally popular for when he can actually take the glory for it.”

Well, whaddya know! There on the front page of The Australian this morning are the details of “Costello’s secret tax plan.”

“Peter Costello’s Treasury Department has secretly costed plans for a flat tax and a top marginal rate of just 30 per cent, arguing these could boost employment and reduce tax avoidance,” Steve Lewis and Michael McKinnon report.

“Just days after the Treasurer savaged Malcolm Turnbull’s plan to slash the 47 per cent marginal rate, The Australian has obtained documents revealing Treasury examined similar options in the lead-up to the May budget.”

“Obtained under Freedom of Information laws, the documents also reveal that Mr Costello’s chief of staff, Philip Gaetjens, asked for detailed costings from Treasury on a suite of reforms, including a flat tax.”

And such beautiful timing, too, when yesterday the opposition was pointing out OECD figures showed that Australia’s overall tax burden had increased to 31.6 per cent of the economy during 2003-04, up from 31.4 per cent the previous year.

While Australia was ranked the eighth lowest taxed nation of the OECD’s 30 members, shadow treasurer Wayne Swan said that since the Howard government came to office in 1996, Australia’s tax take as a proportion of GDP had increased from 29.8 per cent.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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