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Tuesday, 23 June 1998
Page: 5120

Mr PYNE —My question is addressed to the Treasurer. Has the Treasurer seen reports that the current tax system is too complex, has too many overlapping taxes, is focused on business inputs, distorts performance in the economy, is inequitable and does little to encourage national and private savings? Where were these claims made and what is the government's response to them?

Mr COSTELLO (Treasurer) —I thank the honourable member for his question. I was rather taken by a story in the Australian Financial Review this morning on the problems of Australia's tax system. I went back to the source of the article. I can reveal to the House that it is a very stimulating magazine, well worth reading, called Options . As it turns out, the publisher of this magazine is the member for Sturt, who asked me the question. There are a number of articles in this Options magazine on producing a better tax system for Australia, including one by me. I would like to refer the House to the one which appears on page 7, which tells us what needs to be fixed in the current tax system. It reads:

1. It consists of too many different and overlapping taxes.

We would agree with that.

2. It is complex and makes compliance difficult.

We would agree with that.

3. It is unduly focused on business inputs and income and reduces competitiveness.

We would agree with that.

4. It applies differently to different parts of the economy and distorts performance.

I think the government would agree with that.

5. It is inequitable because the wealthy can minimise tax.

We would agree with that.

6. It does little to encourage savings.

That article was written by Gary Johns, a former minister in the Keating government, who then goes on to say—

Mr Beazley —Everyone has to make a living.

Mr COSTELLO —The Leader of the Opposition says that everyone has to make a living. And you will try to make one out of opposing sensible reform in Australia, won't you? Mr Johns says:

This is the one great reform that Labor could not tackle, outside the waterfront labour monopoly, after Keating's 1985 option C died.

ACOSS is saying that the Australian taxation system needs reform. It says:

If we want a better future, we must find better ways of financing it. That is why tax reform is such a fundamental issue.

ACOSS wants tax reform; the business community wants tax reform; the Commonwealth government wants tax reform; the state premiers want tax reform; Gary Johns wants tax reform; Bob Hogg wants tax reform. You are only allowed to tell the truth in the Labor Party once you have resigned from it. And who is opposed to tax reform?

Mr Melham —Is that what Fraser is saying on One Nation? What about Fraser on One Nation?

Mr SPEAKER —The member for Banks will remain silent.

Mr COSTELLO —A joint ticket between Labor and One Nation, led by their respective economic spokesmen, Gareth Evans and David Ettridge, is now opposing tax reform in this country on precisely the same grounds, not because there is any principle, not because you can justify the current tax system, not because you believe in it, but for straight, pure, opportunistic reasons there is a unity ticket between Labor and One Nation, neither of them with a clue as to how to run the Australian economy, and neither of them with a clue as to what to do about a good tax system.