Tax reform

Peter Costello came to office with the idea of doing away with tax returns except when you want to claim a deduction. I liked that idea. I wonder what became of it. Had Costello ploughed ahead with that idea he might at least have some reputation as a reforming Treasurer, rather than just the guy who crossed the t's and dotted i's on GST.

It's stupid that pensions and other similar payments are above the tax-free threshhold. Money comes from Treasury to Centrelink, is deducted by Centrelink and sent back to Treasury, and so on, millions of dollars sloshing around Canberra like the dirty water in the bottom of a boat. You can't be serious about tax reform until you address this growing liability on the public purse. Similarly, the company rate is basically inseperable from the upper tax rate, so how about one tax rate from $(poverty line/welfare recipient income level) to about $100k, and from there up it matches the corporate tax rate.

Why is it that the further away from Canberra you are, the better your ideas?

More broadly, the Liberals talked about the interface between tax and welfare, so that the phenomenon of working poor being worse off than welfare recipients would be done away with. This would be a genuine economic and demographic shift to the sunlit uplands, squarely benefitting the "Howard battlers" that keep this government in office. Surely the best way to ward off growing disenchantment is to get this work under way, so that if the Coalition flukes it back into office in '07 they'd have a groundswell of gratitude that will keep them going beyond 2010. That would create the kind of momentum that gets past difficulties like losing a Foreign Minister or a Coalition partner. But, if they're not serious about holding office then I don't want them there.

One thing I will say in Costello's favour: good on him for slapping down Michael Costa on GST allocations. Sydney as ridden the wave of a decade of economic growth and thanks to Bob Carr, they've blown it. What more do you buggers want?

Now that you're not going to become PM any time soon Mr Costello, how about knuckling down to some work on tax reform? May as well get started, that way if you do get there your successor as Treasurer will know where to start. Or you could just piss off.