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Friday, 12 February 2016

Tax Reform Farce

I am bemused at where we have arrived in the Tax Reform debate. Launched just a few months ago by a freshly minted PM with some fanfare it had widespread support from the business community, economists and a then fawning media. See these welcoming headlines; -
AFR 1 Oct,2015 - "Turnbull's summit greenlights super tax reform"-
SMH 15 Sep 2015 - "Malcolm Turnbull touted as a more likely tax reformer than Tony Abbott"
The Australian 1Oct 2015 - "Tax reform the key to Malcolm Turnbull’s vision
Today, that idyllic dream seems so far away. The headlines again tell the story.

SMH Feb 8,2015 - "Malcolm Turnbull lands on a snake on tax reform"
SMH Feb 5,2015 - "Peter Hartcher: Tax reform proves to be a test of Malcolm Turnbull’s courage"
The Australian Feb 11,2015 - "From tax reform to reshuffle, Turnbull needs to get cracking"
AFR Feb 11,2016 - "Malcolm Turnbull's dark and stormy night of tax reform reality"

How did we get here?

It started with; we are moving forward, casting light, gaining insights, having the conversation with the people.

Then proceeded to; we are not ruling anything in or out, everything is on the table, we are open to all discussions.

As criticism rolled in, it turned to; we won't touch the life savings of the workers, we don't want to increase the overall tax take. And most recently, we can't see any justification in an increase in the GST.

Is this not a trifle confusing?

Lack of leadership exposed

Our leaders have led us a merry chase.

It reminds me awfully of Rudd's 2020 Summit, that mindless ideafest calling for the 1000 "best and brightest minds" in Australia to "map out a strategy for Australia's long-term future". With such high expectations , it was primed for failure. It has disappeared into that not insignificant pit of grandiose ideas concocted by our Kevin 07.
Turnbull too had set the bar high for his Tax Reform agenda and now it too faces a similar fate.

With a hostile senate, negotiating the tricky path to reform was never going to be easy. But let's face it Turnbull had a lot going for him. A partisan media euphoric at the ousting of  Tony Abbott rolled out the red carpet and focused on the opposition. The collapse of the mining boom highlighted the need for real reform, especially since it had been sadly lacking for many years. So the professional classes, the media and the electorate were ready and waiting for their new leader, with such excellent business credentials, to lead them to the Tax Reform promised land.

Alas, in but three short months we have had our confidence shaken and our once great expectations are nothing but a wind in the willows.

Leadership, true leadership requires ideas, an understanding of the available options, conviction a firm belief in the correct path and guts, the courage to make unpopular decisions and see them through. Unfortunately all three seem to be sadly lacking in our PM.

What next?

It is not yet too late to resurrect this mess. Who knows the Tax Reform team, Turnbull, Morrison and Cormann, may stop sitting on the sidelines, decide on a course of action and start convincing the electorate of its merits. I live in hope.

If not, the consequences of Tax Reform failure are not inconsiderable. We would face an extended period without real reform, a growing national debt and further deterioration of living standards.

While the reform agenda can still be resurrected the Turnbull prime ministership has taken a direct hit. The whole sorry saga has exposed Turnbull's frightening lack of political skill. This does not bode well for our future.





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