It’s odd
that there hasn’t been more discussion of Michael D’Ascenzo’s confessions from last week. The new
tax commissioner acknowledged it has become almost too hard to
complete tax returns at home. Nearly 75% of the country’s 11
million taxpayers use an agent to help them file their annual returns.

He told Business Sunday that tax administration is
about having high levels of voluntary compliance. “It’s not the amount that you claw back through
your enforcement action that’s the real important part of tax administration,”
D’Ascenzo said. “The important part about tax administration is having a
culture where people can easily comply and do comply voluntarily in relation to
their obligations.”

So no doubt he’ll be looking closely at the latest
paper produced by Australian National University
economist Andrew Leigh.

Leigh has
found abolishing income tax returns could save the economy $3
billion in lost productivity and give most people the equivalent of an extra
public holiday a year, The Australianreports today.

“Reduced work incentives are not the only
deadweight cost of taxation,” he writes. “Another deadweight cost of taxation
is the administrative burden. Getting your receipts in order and ploughing
through the Tax Pack takes time that could be spent doing more productive

Leigh claims Australia’s tax
rules are behind those of international competitors like Britain and New
Zealand. He says
two-thirds of Australian adults filed a tax return in 2002-03 – compared to
just 20% of British adults.

Drawing on the results of a 1995 survey which found
that Australian
taxpayers spend 8.5 hours a year on their tax affairs, he estimates the cost of
tax compliance today is $300 per person. “We can
make life easier for Australian taxpayers,” he says.

And where
does one find this good liberal message? Why, it’s part of Labor’s Progressive