Robert Oakeshott (Lyne, Independent) Share this | Hansard source

Despite the advice that I just gave to the clerk, when we come back at 3.30 I will continue my remarks on the full budget reply for around 17 minutes on matters that my community and my country feel are important.

I have listened closely to the member for Kooyong, and I have listened closely to the debate that rages in Australia about our economy and about where we are going as a nation. There is no question that there is plenty more work to do. There is tax and spend reform that is desperately needed in our country. While there is an increasing focus on the spending side, I would hope that we do not give up on the work done by a very good former Taree local who made it to be Treasury secretary, Ken Henry, and the work done by his expert panel around 2009 on a blueprint for sensible tax reform. Much more work can be done in nation building to deliver on that.

On the spending side, I think the Parliamentary Budget Office—the very good, new Parliamentary Budget Office—released a paper last month which identified that the difference between tax and spend. It is not that great when, on the spending side, one of our main structural problems is this wont to give tax cuts whenever elections come around. If everyone could relive the last decade, which I consider for Australia were very fat and unsustainable times, the idea of delivering up to eight tax cuts—I think five were actually delivered—would be viewed differently. It has now placed us in a position which we do not want to be in. So, yes, at the time, they were tax cuts; but, really, it was unsustainable spending from a government point of view and, on reflection, it would now be viewed, I hope, differently.

Also when we look back on that period, our tax to GDP ratio was peaking. Again, if we are serious about the future, a 24 per cent tax to GDP ratio is the window which I hope all in this place would want to work under, regardless of our politics. The room to move in tax negotiation is around that 24 per cent tax to GDP. I hope in an arrangement that can be made some time soon amongst adults, the Commonwealth and the states—and I would also include local government—can sit around the table and, in the many ways that I tried to do through the tax summit where we got a bit but we did not get as much as we were chasing, negotiate a modern tax system. We need a tax system that works the efficient taxes a bit harder—those four or five that are doing 90 per cent of the heavy lifting—and that provides a bounty in trade-offs in compliance, productivity, red tape by getting rid of the more than 820 inefficient taxes in this country. What a bounty that would be under a broad umbrella of the 24 per cent tax to GDP.

That sensible conversation is still waiting to happen on a number of fronts. I pick the mining resource rent tax as one example of the failure to have that conversation between the Commonwealth and the states. The opportunity for the future is to get the resource rent tax working harder and to lessen the impact of inefficient royalties in the market. That is the point of the exercise. That was the point of the recommendation from Henry, and that is the unfinished business for whoever has government into the future. It is just one of numerous examples of the need for sustainability in the budget on both the taxing and the spending sides, and there needs to be a more mature conversation about that than the one we seem to have had to date.

Sitting suspended from 13:45 to 15:30

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