The Federal Government will embark upon yet another review of Australia’s tax system, with the stated aim of creating “a tax structure that positions us to deal with the demographic, social, economic and environmental challenges of the 21st century".
The Treasurer’s statement that “there has not been a comprehensive review of the Australian taxation system, including state taxes, for at least the last 50 years" overlooks the good work of those who have previously participated in the herculean task of tax reform - see Reviews of the Australian Tax System - a brief history.
The upcoming review will encompass Australian federal and state taxes, (except the GST), and interactions with the transfer payment system, and will consider:
- the balance of taxes on work, investment and consumption, and the role for environmental taxes
- further enhancements to the tax and transfer system facing individuals, families and retirees
- the taxation of savings, assets and investments, including the role and structure of company taxation
- the taxation of consumption, property and other state taxes
- simplifying the tax system, including the interactions between federal, state and local government taxes, and
- interrelationships between the elements of the tax system, as well as the proposed emission trading system.
The review will preserve the current tax free treatment of superannuation payments for those aged over 60. It must also take account of the Federal Government’s aspirational personal income tax goal - announced during the Federal Election - to reduce the number of personal tax rates from four to three by 2013-14 (ie a tax scale of 15 per cent, 30 per cent and 40 per cent).
