Yesterday Business
Council of Australia president Michael Chaney declared that “tax reform must be
a permanent item on the reform agenda”.
The prime minister, however, appears to prefer permanent tinkering.

“Life is a
bit complicated and the Tax Act reflects the complication of life and the
complication of business,” Howard said at a presser yesterday.
And the Treasurer was scarcely champing at the bit. “Australia is up the top of the ladder for low
taxes,” he told parliament in Question Time.

That
doesn’t tackle fundamentals like the gap between personal tax rates and the
corporate rate – and the social justice issue of people who can arrange their
affairs to take advantage of the corporate tax rate.

So no
wonder there’s more concern about the independence of the
Treasurer’s quick pre-Budget review of the tax system. “Late last month, the
Treasurer appointed leading business figures Dick Warburton and Peter Hendy to
conduct a study comparing Australia’s tax competitiveness with other nations,”
The Australian reports today. But the paper has learned “almost all the work is being
done by a team of nine Treasury officials who are conducting the research and
drafting the report in order to meet the April 3 deadline set by Mr Costello.”
It claims:

The Treasury team has been sending Mr
Warburton, the chairman of Caltex Australia and a former Reserve Bank director,
and Mr Hendy, the chief executive of the Australian Chamber of Commerce and
Industry, drafts of chapters detailing their conclusions for the authors’
comments.

But it
is understood Treasury failed to include some of the authors’ amendments and
suggested changes in revised drafts.

Peter Fray

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