LAWYERS and business stakeholders have called on the government to take bold leadership on tax reform to realise future economic growth.
The newly released Henry review into Australia’s Future Tax System has fuelled debate on economic reform across the country.
The Henry review made 138 recommendations, some of which the Government has specifically accepted. It has also promised to have more to say on a number of areas in the review in the coming months. Other recommendations, the government has specifically rejected, including imposing a land tax on the family home, and including the family home in means tests.
The Business Council of Australia, an association of the CEOs of 100 of Australia’s leading corporations, said it is a “staunch advocate for root-and-branch” reform of Australia’s tax system. It said it supports the ambitious nature of of the review panel’s blueprint for a new tax system.
But the Government’s initial response to the review is relatively narrow and only partially meets the BCAs principles for tax reform, it said.
“We hope over time the government will embrace the recommendations of the Henry review more fully, given they could add a further 2 per cent to the GPD,” BCA chief executive Katie Lahey said.
But Mallesons Stephen Jaques partner John Edstein and senior associate Michael Mathieson said today the lack of response by the Government in relation to longevity insurance is disappointing given that it is such a big issue, as acknowledged in the report.
“The Government’s response, including rejecting government based annuities, continues to leave a void as to [its] preparedness to make specific policy decisions on this issue,” Edstein and Mathieson said.
The Mallesons partners said there was a prospect the Government is awaiting the final report from the Cooper Review, which is scheduled to be handed to the Government on 30 June this year.
Longevity was outside the terms of reference for Cooper, however, and was to be left to Henry. But interim papers from Cooper have alluded to, and addressed, in some respects, longevity matters, the Mallesons lawyers said.
“It might be that the issue will be addressed in the Government’s next term, assuming it is re-elected, on the basis that they have flagged that incentives to save are part of a full second term agenda.”
See Mallesons Stephen Jaques’ analysis of the Henry Review in Wednesday’s edition of The New Lawyer.