In a speech to the John Curtin Institute of Public Policy, Breakfast Forum Fri 5.10.2012, entitled “Challenges and opportunities for the Australian economy“, the Secretary to the Treasury, Dr Martin Parkinson, raised the issue of “sustainability of the tax system” in terms of whether it can continue (at both the Commonwealth and State level) to support the functions the community is demanding from governments, while delivering incentives for investment in physical and human capital, innovation and participation.
In this particular, Dr Parkinson commented that significant economic benefits and better sustained economic growth would be obtained in moving the tax mix away from income taxes and towards potentially less mobile, and therefore less distorting. He also said that people must be encouraged to think about the system as a whole rather than each tax in isolation and what matters is not the progressivity of each individual tax, but the progressivity of the system as a whole.
Dr Parkinson concluded his comments on this matter by saying that while Australia needs a considered debate on the role and size of government in Australia, what is also required is a sensible conversation about the sustainability of our tax systems at both State and Commonwealth levels.
[LTN 193, 5/10]