Peter Costello Slammed Over Tax Reform Failure

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

04 September 2002

Australian Treasurer, Peter Costello has been slammed in the Australian media for dragging his feet with regard to tax reform, and for making too many concessions to the country's business community.

Writing in the Sydney Morning Herald on Monday, Economics Editor, Ross Gittins condemned the Howard Government's business tax reform programme as the 'longest three-card trick in history', arguing that many of the anti-evasion measures promised for wealthy taxpayers in order to balance the impact of GST introduction on ordinary citizens have not come to pass, or have been substantially diluted.

Speaking prior to the 1998 election, Mr Costello argued that: 'Wealthier individuals with access to legal and accounting advice can target particular investments and structures to take advantage of differences in tax treatment. The rest of the community subsidises the wealthy taxpayer.'

However, according to the SMH report, the Treasurer has done little to limit the ability of those within certain sectors of the business community to evade taxes, having buckled under pressure from lobbyists and other involved parties:

'The measures to limit contractors' abuse of incorporation were greatly watered down and the legislation to tax family trusts as companies was withdrawn and sent back for recasting,' Mr Gittins commented, observing that individual taxpayers have benefited very little from the reform package.

'So much for genuine business tax reform. The package has been gradually dismantled, retaining all the bits business liked and dispensing with all the bits it didn't,' the article concluded.

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