The
Treasurer’s comments on Melbourne radio this morning to Crikey’s
Stephen Mayne about tax reform are probably accurate. Peter Costello
said there’s “no reason” to believe that ‘Rupert’ is behind the tax
reform campaign being waged by The Australian.

It’s hard
to imagine (although some might like to believe otherwise) that right
now Rupert Murdoch is sitting in New York in his three-level apartment
on Fifth Avenue directing his newspaper’s freedom of information
applications to get access to Treasury’s modelling of tax policy.

If
the campaign for tax reform was simply the folly of a billionaire media
proprietor then it would be easy for the Government to dismiss it.

However, the call for an overhaul of the tax system is not restricted to just The Australian. Over the last year The Australian Financial Review has also run hard on tax and on the question of the Coalition’s reform agenda more broadly.

(It’s
not a coincidence that of the country’s four major newspapers, the two
that view Australia from a genuinely international perspective have
been the most vocal proponents of reform. The Age and The SMH are still pretending that the biggest issue facing the nation is how to resurrect Medicare Gold.)

Business
groups, unions, think-tanks, Liberal and Labor MPs are all in on the
act – not only Rupert Murdoch. If, as Paul Keating said in the early
1990s, every parrot in the pet shop was squawking micro-economic
reform, every parrot is now squawking tax reform. We’re now all experts
on effective marginal tax rates, flat tax in Lithuania, and deductions for work related
expenses.

The clamour for reform is helping – not hurting – the
Government. Next year the Coalition is entering its tenth year and a
bright new program of tax reform is just what it needs to avoid looking
old. What is going to be the real BBQ-stopper this Christmas? Unfair
dismissal laws or tax cuts? And what would John Howard want it to be?

Policy
purists might hope that tax reform will come about because it’s good
policy – but in 2006 it is more likely to happen because it is good
politics.