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Will Australia ever see major tax reform?

By Cameron Micallef · March 13 2020
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egg

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Will Australia ever see major tax reform?

By Cameron Micallef
March 13 2020
Reading:
egg
Peter Costello

Will Australia ever see major tax reform?

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By Cameron Micallef · March 13 2020
Reading:
egg
Peter Costello

Despite being much needed, Australia will never have a major tax reform to the scale of reforms in 2000, says the man who established the goods and services tax.

In a presentation at the Tax Summit, Peter Costello outlined how his government reformed the tax system, the need to modernise the current system and lessons for the tax system today.

“If you told me 20 years ago I would be standing here today with a GST with an unchanged rate and almost unchanged in base, I would have said you have two heads on you,” Mr Costello said.

He said despite the need for tax reform, getting bipartisan agreement is unlikely, with politicians having to work out alternatives to passing through changes in regulation.

Mr Costello highlighted that the GST that passed parliament was not the idea of the Liberal Party, instead it was “what we could survive the Senate with”.

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“Sure, tax reform is much easier if it’s bipartisan, but a lot of tax reform in this country is not bipartisan,” Mr Costello said.

The former treasurer also explained the needs and wants of business people are not actionable without a well-thought solution to tax law.

“You have to fight for it. From time to time, I hear business people saying you have to reform the tax system. But its not enough to just say we should reform the taxation system and go home. If you want to reform the taxation system, you need to have a plan,” Mr Costello said.

“I often get asked will we ever see a tax reform as big as this, and here is my answer: No one will ever have to introduce the GST again, and there is nothing as big, because it affects every person on every consumer transaction everyday.”

Mr Costello also believes Australia will never have a tax reform as large as it was in 2000 because the largest reform in history has already been achieved, with future reform simply adding onto existing frameworks.

“If you were to increase the rate or change the base, its much simpler as you have the ABNs in place, you’ve got the registrations in place, you’ve got the training in place, youre just fiddling with the details now,” he said.

“So nobody will ever have to do it again.”

Will Australia ever see major tax reform?
Peter Costello
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About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

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