The Treasurer opened the OECD Global Forum on Taxation in Melbourne yesterday, talking tough on tax. He told representatives from 60 countries that excessive financial secrecy can undermine national tax systems and aid organised crime and terrorism. “Banking activity beyond the reach of lawful investigation can be used for more than tax evasion – it also opens the door to organised crime and terrorist financing,” he said.

The OECD is working on improving transparency and exchange of information between states so countries can fully and fairly enforce their tax laws.

The Treasurer said countries are free to set their own tax rates and design their own tax systems, then warned “that ability could be undermined by others, however, if they allowed their jurisdictions to be used to hide transactions, launder money or operate banking activity beyond examination by properly constituted investigative agencies.”

We’ll agree with the Treasurer on that second part – up to a point, as financial privacy is a fundamental attribute of a free society – but what about the first? One of the things the OECD meeting is looking at is how to curb “harmful tax competition.”

Put simply, high taxing European countries are worried that they are losing capital and highly-skilled workers to lower-taxing countries, and they are using the OECD in an effort to undermine competition from these more fiscally responsible jurisdictions.

Isn’t tax competition a good thing? Isn’t competition a good thing? Doesn’t promoting liberal tax reforms around the world support growth and job creation?

Is The Man Who Would be Leader going to use the OECD as his latest excuse for failing to take a lead on some real tax reform in Australia?