This is probably a case of delusions of influence, but Peter Costello’s
international benchmarking exercise to determine which taxes will be
cut in the May budget is precisely what I advocated in the opening half
hour of the Economics working party at the Australian Future Directions
“If we’re going to advocate any tax cuts, we should use
international benchmarks as a guide and move on taxes where we’re above
average,” was the tenor of the argument made in front of about 15
people, including newly installed Assistant Treasurer, Peter
Dutton. Lo and behold, three weeks later and Dutton’s immediate boss has decided to do exactly that.
Cossie’s interview with Barrie Cassidy on Insiders yesterday included this line: “What I hope will occur is we can find out where Australia leads, and there are
many areas where we lead, but we can also identify areas where Australia lags
and they ought to become the priority as we improve our tax system.”
Dutton probably didn’t hear the comment, let alone mention it to
Cossie, but when you sit in isolated splendour at home each day trying
to influence public debate, a little bit of misguided gloating can keep
your spirits high.
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There was always going to be a bunfight in the AFDF Economics working
party about tax and I used the
benchmarking argument to launch a push for Australia to introduce a
federal inheritance tax, seeing that the US and the UK have precisely
that. The inheritance tax vote was eventually tied at 6-6 but stupid me
wasn’t there, having moved on to the Leadership and Governance working
party by this time.
It will be interesting to see if this benchmarking study by Dick Warburton and Fightback!
co-author Peter Hendy is confined to looking at existing taxes because
inheritance and carbon taxes are common around the world but nowhere to
be seen in Australia.
One thing’s for sure, Cossie won’t be copping any more whingeing from
the business lobby about their 30% corporate rate, which leaves for
dead those working stiffs on the top rate of 48.5%.
For mine, this looks like an exercise to finally cut the ridiculously
savage top rate, something the Howard Government has failed to do in ten
years. It was Paul Keating who cut John Howard’s 60% top rate down to
48.5% and if Howard and Costello want a bit more respect from their
core constituency, the top rate needs to begin with a three.
If looking for some guidance, perhaps the PM should dust off the small
government tax policy he
and Jim Carlton launched at the Box Hill Town Hall during the 1987
election campaign. I wagged school to attend that one and even got to
shake “Little Johnny’s” hand, but it certainly wasn’t my idea to have
that double counting blunder which cost him the election.