Last week the United States teetered on the brink of defaulting on its debt, with the government in its second week of shutdown. The possible global ramifications cannot be overlooked. This includes the potential impact on Australia. Pleasingly it seems a deal has now been reached in the US.
We saw through the global financial crisis that we are not immune from world events in this increasingly interconnected global economy. However, it is clear that Australia’s economic position is in stark contrast to the US.
With this is mind, it is encouraging to hear the Australian government speaking of ‘a new era of reform’ in this electoral term. This week the Treasurer has recommitted to a tax reform program after wide consultation with key stakeholders. A green paper will precede a white paper on tax reform options, then, with the core principles of fairness and simplicity in mind, the government will seek endorsement from the electorate for their plan at the 2016 election.
We have long called for Australian policymakers to not waste the opportunities for tax reform presented by our relatively healthy economy. Australia has the opportunity to debate serious and long-term tax reform options. We can still create a sustainable tax system that supports growth while meeting current and future spending needs.
The tax white paper process holds much promise as the government gets down to business.
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.
The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.