In speech delivered to the National Press Club earlier this week, Henry gave a taste of what is likely to be contained in the Future Tax System Review Panel's report, due to be published next year. He argued that tax compliance should be dramatically simplified so that ordinary taxpayers would not have to pay a tax professional to prepare and file their returns for them, or to help them make basic decisions. He also hinted that the review panel is considering far-reaching corporate tax reform.

"System complexity acts like an additional tax, but the worst kind of tax: a tax that provides no revenue, is indiscriminate in whom it affects and serves little social value," he told the audience.

To support his argument, Henry cited a comparison between Australia, where 73% used tax agents to lodge tax returns, and New Zealand, where only 30% of taxpayers used tax professionals to file their tax returns. Around 11.5 million Australians lodged tax returns for the 2008 fiscal year.

Henry also indicated that the panel was exploring some fairly radical options with regards business taxation. He suggested that the problems with the corporate tax system are not necessarily attributable to rates of taxation, but are more rooted in the system's complexity. By simplifying corporate tax, he argued that not only would there be more incentive to invest in Australia, there would also be less opportunity for tax system 'arbitrage' by multinational companies.

"If we were to adjust business tax arrangements to attract a greater share of global investment, we would ensure that firms had minimal incentives to artificially shift profits offshore," he said.

He suggested that there is a "good case" for switching to a tax on supernormal profits, or what economists call "economic rents." Critics of this argument, however, contend that this proposal has already been considered, and rejected, in previous tax reviews, and would do little to reduce complexity.

The tax review, announced as part of the 2008 budget last May, is a root-and-branch examination of the country's tax system, encompassing taxes on income, investments, savings, consumption, property and the environment at both state and federal level. According to an announcement by Assistant Treasurer Chris Bowen in August, the review panel will provide its final report to the Treasurer by the end of 2009.