“Never let a good crisis go to waste.” - Winston Churchill
ScoMo has flagged tough and ‘unpopular’ reform decisions are on the table, including ‘sacred cows’. Hallelujah! It’s about f$&*ing time. The IMF forecasts the local economy to shrink at rates unseen since The Great Depression in 1931. Former Treasury Secretary, Ken Henry, completed a landmark tax review a decade ago, yep 2010. It’s been on the political shelf ever since. Too prickly and unpopular for left wing politics to look at. Too risky for right wing politics to pursue. It’s time to dust it off and review none less than 125 recommendations that it contains. Australia has the second highest tax regime on business profits and personal income combined out of 34 of the world’s leading economies, fact.
Bobby Hawke (excellent beer drinker), the great Aussie reforming PM’s, economic advisor was a bloke named Ross Garnaut. He flags a much deeper crisis, deeper than Keating’s ‘banana republic’. He reckons a bolder, revenue neutral, corporate cash flow tax would give immediate 100% tax deductions for new business investment - a powerful incentive to boost productivity. The radical proposition would take more money from monopoly/oligopoly profits such as toll roads. Small business and our industry would be a beneficiary. Think of it as a ‘Robin Hood’ tax. In simple terms, such a progressive tax would be commensurate with sales and eliminate draconian, regressive tax regimes attacking bottom lines and plaguing the current system. It makes too much sense, but requires bipartisan parliamentary ‘buy in’. Will it happen? Probably not. Will it start the conversation, hell yeah. I’ll take the abolition of penalty rates and payroll tax as an opening offer. Let’s keep the broader discussion rolling and dream of a state, where red tape is reduced and I can give up my actuarial studies to concentrate on pouring beers.
The think tankers are thinking, thank goodness. I praise the systemic shift in thinking and pray that ScoMo and his team have the conviction to make the tough calls on major reform. Industrial reform is in the cross hairs, next time.
Here endeth the lesson.