Reform stalled: tax paper reset, PC chair blasts deadlock

By Harley Dennett

September 23, 2015

Treasurer Scott Morrison says the government’s white paper on taxation is not axed and its “already very broad” scope won’t be changed, after it was reported by Fairfax Media that the Treasury’s work had been dumped and there would be a rethink from the ground up.

Reform isn’t being abandoned, Morrison told a press conference this afternoon to clarify the white paper’s future. “This is a very exciting time to be involved in public policy,” he said, with the tax white paper being critical to the government’s economic plans.

PC chair laments wasted opportunities

But just one day earlier, Productivity Commission chair Peter Harris (pictured top) let loose at Premiers’ and Prime Ministers’ poor treatment of major reports produced by the public service in an address to the Australian Competition Policy Summit.

Harris cited one report among many, the Harper Competition Policy Review, which was released six months ago and “noted” by the Council of Australian Governments with no further action or even discussion planned when it last met.

“It is rare to recover bureaucratically from the fate of being noted by COAG,” Harris said.

“Moreover, if you look up the COAG reform agenda on the official website, you will see commitments from 2009 and 2011. But nothing of substance since. Clearly, there is a need for a political revival.”

Harris complained of major reports being “left to languish if they no longer suit the immediate political agenda” and warned that this work was dealing with issues that are not second order.

“Reports like Harper, or closer to home my organisation’s report on Justice in Australia, now twelve months old, deserve a serious response, even if it is to reject – but explained with logic and thoughtfulness – what has been proposed.”

“They are social or economic first order matters.”

But the states and territories still haven’t been properly briefed on the important matters of the Harper Review, and Harris is concerned that they’re the actors who matter, as they’ll have majority carriage if it were ever to be implemented.

“It will now be a challenge to revive a report like Harper,” Harris added, “since it was light on the sort of deep specifics that at least allow the Henry Report to still be drawn upon for guidance in tax reform contexts.”

Today Morrison clarified that the Harper Review is “also proceeding.” He offered no details.

Secret reform not helpful

Harris also took aim at the way policy and reform is conducted away from the gaze of public and media scrutiny.

“But as that agenda has shown, conducting discussions in such a manner leaves public policy open to serious misrepresentation,” he said, citing the area of international trade policy and public backlash over the Trans-Pacific Partnership secrecy.

“And makes it all the harder when actions suddenly appear in front of an uncomprehending public.”

Reserve Bank of Australia governor Glenn Stevens last month offered useful advice on the need for active public communication while contemplating reform:

“I would like to suggest that ‘reform’ is a term which excites the intellectual elites and the various interest groups (including those who feel they have something to lose from reform) but doesn’t do much to excite the general public. And getting buy–in from them is ultimately critical. To be sure, they have to be led. But they have to be convinced too.”

The Treasurer appears to agree.

“The process of tax reform is one I want to take people with us on,” Morrison told the press conference today.

“I want to focus discussion on the benefits of taxation reform. And if I can, I think we’ll see more of an appetite for it.”

Calling on the Opposition to support this process, he argued for politicians to “engage on the outcomes.”

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