The Prime Minister has denied suspending work on the tax white paper.
Conflicting reports yesterday that Malcolm Turnbull had suspended work on the Government's tax white paper have been quashed, with the Prime Minister himself taking to Twitter to put an end to the rumours.
Fairfax Media yesterday reported that Malcolm Turnbull, in one of his first acts as Prime Minister, had secretly suspended all work on the previous government’s tax white paper. The report claimed that Australia’s biggest ever review on taxation was “dead in the water”, mere weeks before the preliminary report was due.
Fairfax also went as far as saying that Federal Treasury bureaucrats were “stunned” and, according to one senior executive, “We were told to put everything on ice, and that a ‘reset’ on tax reform was taking place.”
In answer to the so-called suspension of the white paper, Mr Turnbull took to social media to debunk the media myth.
“We have not stopped work on the tax white paper – quite the contrary, as I said earlier in the week tax reform is at the centre of our efforts to make Australia a more innovative, productive and prosperous economy,” the PM tweeted.
In his first major press conference as Federal Treasurer, Scott Morrison, along with Finance Minister Matthias Cormann, also confirmed that the Government’s tax white paper process remained “on track”.
“It is proceeding as we intended it to proceed, and the timetables around those issues have always been, I think, very broad and not fixed,” said Mr Morrison.
Mr Morrison also expressed his desire for “lower, fairer, simpler taxes” and declared the Government’s focus for tax reform will be to reduce spending rather than raising taxes.
But, after yesterday’s talk of the tax white paper suspension, when quizzed about its timeline, Mr Morrison would not provide any clear indication of when it will be released.
“It will be released when we are in a position to release it,” he told the media.
With all the confusion yesterday surrounding the fate of the tax white paper, one important point seemed to be glossed over: why not just wait and get it right?
When I first read about Mr Turnbull’s suspension of the white paper, I thought it was a good move. It was clear to many Australians that Mr Hockey and Mr Abbott’s attitude towards tax reform was none too popular. The best way for a new PM to handle that situation would be to reset the process and restart from the ground up.
Tax reform is no small task. With Australian companies investing hundreds of millions on tax and legal advice to create the multitude of submissions to the white paper, surely, they too would see the benefit in getting it right the first time.
With the allegations of the white paper’s suspension proving false, the Government now has to make some decisions on tax reform, putting increased pressure on a successful outcome. But what can Mr Turnbull do in such a short time to make this happen?
It is believed that he would like to reduce personal income tax. He has also stated that, in order to make it more efficient, he would like to remove the plethora of exemptions and concessions that make the system so complicated.
An obvious candidate for immediate returns is to cut the generous super tax concessions that the former Government was so loathe to do. After all, more Australians would be better off with that money being put back into the system, rather than into the accounts of the already wealthy. An action such as this would also show that the new Prime Minister is willing to tackle the high-end earners in order to assist those who need it most.
But will he do it? That remains to be seen. It would certainly go a long way in separating him from the ‘blinkered’ attitudes towards taxation held by the previous leader. It would also show many Australians that he has their best interests in mind, and not just those of big business and the wealthy.
What do you think? Should Mr Turnbull hold off on making any hasty decisions regarding tax reform? Would it bother you that the tax white paper could go on hold so that more intelligent, well-thought through decisions are made concerning the tax system? Do you think Mr Turnbull should remove the embargo on amending super tax concessions?
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