Australian Tax Experts Call For More Discussion In Election Run-Up

by Mary Swire, Tax-News.com, Hong Kong

19 October 2001

The timing of the committal hearing of fraud charges against former first assistant tax commissioner, Nick Petroulias- just five days before the Australian federal elections- has focussed the minds of the country's financial sector firmly on tax.

Astonishingly, taking into account the amount of international and domestic coverage given to the ongoing slanging match between the Coalition government and Labor over tax, some experts feel that the tax reform issue has become somewhat buried, and that there should be more discussion and self-examination by the two major parties in the run-up to the election.

Robert Richards, a tax lawyer from Sydney, speculated on the reasons for the lack of focus on the issues of particular interest to tax practitioners: 'I suspect that politicians find tax just too hard. But neither of the major parties should be allowed to go to the forthcoming poll without detailing policies on tax reform and tax administration.'

The fact that Treasurer Peter Costello recently accepted the resignation of his senior tax policy adviser, Phil Lindsay, has been taken as a sign by many that he does not expect tax to be a central issue in the election campaign. However, experts, practitioners, and taxpayers who have experienced the sharp end of bungled reforms and failures on the part of the Treasury Department and the ATO beg to differ.

President of the Taxation Institute of Australia, Alice McCleary, wrote in the Institute journal that in her opinion, there was 'plenty of unfinished business still lying on the tax table' in the run-up to the federal elections, with her main concerns being reforms which were time-tabled, but then mysteriously dropped from view. Principle among these, she said, was the proposed grouping of related companies for tax purposes, and the taxation of discretionary trusts issue.

'Regardless of whichever party wins the election, these issues will need to be dealt with decisively, one way or the other. If (consolidation) is not to be, how will the current mess that is corporate taxation be fixed up?' she asked. Meanwhile, the Institute's tax director has pointed to the lack of consultation with tax professional and the business community by both parties, as an area of concern. In a recent interview, he supported Ms McCleary's statements, agreeing that: 'There are many serious tax issues that need to be debated and aired,' and adding wryly that 'all that trauma' with the Business Activity Statement (BAS) could have been avoided if proper consultation had taken place.

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