The Henry Tax Review, and the government’s long-awaited response to it, are in. In Crikey‘s Very Special Sunday Edition of the Daily Mail yesterday, Bernard Keane outlined (subscriber only) the recommendations:

Ken Henry and his team have recommended is a far simpler tax and transfer system intended to encourage productivity, participation and economic growth, secure retirement incomes, make housing more affordable and reduce the burden of tax compliance for all Australians.

In particular, the Review wants government revenue to be based on four principal sources – personal, corporate, consumption and natural resources taxes – with no other taxes except those aimed at addressing social or economic costs. In its view, all other taxes – insurance taxes, payroll taxes, fuel excise, you name it – should be abolished.

It’s a “great document”, said Alan Kohler — “probably the best tax review ever produced in this country” — but after months of hype and review, the government has only actually adopted 1.75 of its 138 recommendations:

Wayne Swan’s tax policy statement bears almost no relation to the Henry Tax Review, except that it came out on the same day. Its centrepiece — the Resource Super Profits Tax (RSPT) — is one of the Henry recommendations, but the cut in the company tax rate is only about a quarter of the recommendations about company taxation, and the small business concessions are about a half of what’s proposed.

It was a very safe play by the government, agrees Keane; one that won’t scare voters, but doesn’t exactly paint Rudd as the great reformer he has previously touted himself to be.

As Keane says, the big losers from Government’s plans will be mining companies, which will now have to fork over 40% of their super profits to the government.Hardly the most sympathetic victims, but that probably won’t stop them stealing the headlines with tales of woe.

Stay tuned for more in-depth analysis from Crikey‘s crack team of commentators in today’s Daily Mail.

In the meantime, check out how the pundits are reviewing yesterday’s big Review.

The Australian

John Durie: Super the biggest winner as Rudd plays to gallery

One great irony of the Henry tax review is the fact that the biggest winner is the superannuation industry…

Paul Kelly: Battle lines are drawn for poll

These first decisions on the Henry report are an anti-climax, and that was inevitable given its election-year delivery.

Tom Dusevic: Man who wouldn’t kick the hornet’s nest

The look on Henry’s face as the Treasurer outlined the Rudd government’s response to his major work was not quite miserable, but it was decidedly akin to a stiff-lipped director watching the studio’s blunt-edged cut of his masterpiece.

Glenn Milne: Kevin Rudd finds a rich vein to plug holes in budget

Kevin Rudd’s response to the Henry taxation review reveals the character of this government as it heads into an election it is now worried it may lose.

George Megalogenis: Super idea, but hardly a reform

In ordinary times, a government that rejected the advice of the bean counters would deserve a pat on the back. But this government doesn’t really do brave.

Editorial: Resources rent tax a curb on growth

That the Rudd government has avoided broad-based reform to the tax system, while growing a new and potential enterprise-sapping umbilical to mining industry profits, says everything about its weak-willed, knee-jerk response to Ken Henry’s tax review.

Sydney Morning Herald

Peter Hartcher: It’s not the economy, it’s the election, stupid

It’s not really about strengthening the economy. It’s about strengthening Rudd and Swan’s appeal to the the ”working families” who will decide the election.

Michael Pascoe: Did Kev and Wayne even read Ken’s review?

But there is in fact evidence that Kev and Wayne at least had a skim of the excellent document: they must have looked to be able to specifically rule out considering so much of it.

Malcolm Maiden: Playing it safe on taxation

And this government has done exactly what you would expect it to do in an election year: cherry-pick a few bits of it and bury the rest, where, like a dog’s bone, it awaits one certain and one possible disinterment.

The Age

Michelle Grattan: No shocks in this response

And everything it has done is oh, so election year.

Tim Colebatch: Sands of politics drift over the hard bits

What we’ve got instead is classic Rudd: a package to deliver benefits to the many, paid for by taking money from the top end of town, with the rest of Henry’s reform plans either shelved or ruled out.

Tony Wright: Review too radical for Rudd

There followed no fewer than 18 recommendations that were to be denied outright, almost every one of them in that politically familiar column known as ”don’t scare the horses under any circumstances”.

The Daily Telegraph

Malcolm Farr: Rudd’s reforms a minor tweak

But what the Government didn’t produce was a major overhaul of the entire tax system.

Piers Akerman: Another Labor promise dies – Henry Tax Review

The Rudd government has again shown that it lacks the political integrity and the management skills it promised when it came to office.

Simon Benson: The only new tax here is on credulity

Henry did not look in any way impressed. His body language was that of a man who had been slapped in the face with the damp hand of political reality.

Alison Rehn: Henry calls for gambling reviews

The wombat-loving, camera-shy head of the country’s Treasury has suggested a suite of recommendations that, while bringing in wads of cash, also contain a higher purpose.

Steve Lewis: Swan ducks chance for meaningful reform

Instead of slashing the number of taxes and delivering a simpler system, the Government has squibbed it right at the time when it really counted.

Herald Sun

Terry McCrann: Rudd fails to bring about change

Compared with the Howard-Costello tax-reform package, the Rudd-Swan version was like running the famous knife scene in Crocodile Dundee backwards.

That’s serious tax reform, this is the inoffensive joke version.

David Koch: Government wimps out on true tax reform, says David Koch

How wimpy was that? It was meant to be a revolution.

ABC

Lyndal Curtis: Henry tax review fills Rudd’s too-hard basket

But for those expecting a broad reform of the tax system, or at least a roadmap to follow in the coming years, they’ll be disappointed by this review.

Stephen Long: Tax reform blunted by hollow men tactics

It was always inevitable that the politics would blunt the reform agenda. At least some worthwhile things are being done.

The Punch

Family First Senator Steve Fielding: Henry: By going after the big guys, little guys will get hurt

Yes, it’s always popular to sting the big guy and not the little guy who owns the corner shop down the street.

Leo Shanahan: No Hooray for Henry

It’s not so much a “root and branch” overhaul of the tax system as it is a rocks and dirt one.

Elsewhere

Grog, Grogs Gamut: The Henry Review and Liberal Party Logic

So according to Abbott, Rudd is gutless for not implementing enough recommendations, but then he states that he wants Rudd not to implement the recommendations.

Sigh.

Joshua Gans, Core Economics: Gift to econ textbook writers

If nothing else, the Henry Review, should it be implemented (and let’s face it, that isn’t looking promising) is a gift to economics textbook writers such as myself.

Gary Sauer-Thompson, Public Opinion: Rudd/Swan squib on tax reform

…this lack of courage and risk-taking is what we have come to expect on reform. Politics rules.

Peter Fray

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