Julia Gillard's minority government has been put on notice it will need to start delivering on tax reform by the May budget or risk losing the support of key independent Rob Oakeshott.The NSW member for Lyne, who helped the Prime Minister to office last September, yesterday upped the political stakes for October's tax forum, declaring everything was on the table for discussion and starting his own parallel process of public submissions and hearings on tax reform.
He also said he was "completely underwhelmed" by Labor's response to its Henry review of taxation and called for Coalition participation in the tax forum, despite its omission from the invitation list. Mr Oakeshott, who made the tax forum a condition of his power-sharing deal with Labor, said it was "pretty much" a make-or-break issue for him.
"I will be doing what I can to make sure that they treat it as their most serious work of the 43rd parliament and, without being too explicit, I will be extremely disappointed if they don't," he said.
This week, the government released its invitation list and discussion paper for the upcoming tax forum. But it ruled out any changes to half a dozen controversial tax issues, including the GST rate or coverage, the mining tax, negative-gearing tax concessions and alcohol taxation, to the chagrin of business. It later added congestion charges, which was canvassed in its discussion paper, to the list of exclusions. Mr Oakeshott signalled his plans to dramatically widen the forum's remit, saying he was open to all options, including the GST.
"Certainly, the Labor Party's view is they're going to restrict the territory they're comfortable talking about. Mine's not." He said he expected the government to start picking off the "low-hanging fruit" of tax reform and producing a "very explicit and specific" 10-year roadmap for implementing the Henry review recommendations by next year's budget.
Mr Oakeshott likened his commitment to a taxation overhaul to his fellow independent Andrew Wilkie's non-negotiable commitment to pokie reform and nominated commonwealth-state tax reform as a personal priority. " I think in there lies a lot of the handbrake on productivity in this country and, if we can streamline and harmonise a lot of that relationship between the commonwealth and the states with regard to taxation, we are doing a lot for business and small business in particular," he said.
The government wants the tax forum to focus on the Henry review recommendations that it neither formally ruled in nor out and has previously called the document a "10-year agenda".
It has already used some of the review's ideas as the basis for its mineral resources rent tax, company tax cut, changes to saving tax and to the low income offset, and simplification of tax returns.
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- From: The Australian
- July 30, 2011