Lets call for an official end to talking about tax reform and simply demand action.

Look, last week’s Tax Forum was interesting and there appeared to be a lot of goodwill from the delegates for change. But it was the same old issues being rehashed by the same people from the same special interest group with the same agendas.

A common theme seemed to be continual reference to last year’s Henry Report on tax reform. The Henry report seems to have taken on the mantle of being the benchmark and reference point for any discussion on Tax Reform.

It would have been simpler and cheaper to have just adopted Ken Henry’s report in the first place. If the Federal Government wanted any assurances that the Henry Report is the blueprint for our future tax system, then they would have received that message loud and clear from the Tax Forum delegates.

Another thing which became clear was that the toughest issues of tax reform are being lumped in with the “no-brainers” to a point where nothing is happening. The big tax issues are distracting everyone from getting the easy ones done.

Like anything, tax reform is all about momentum. Once you get reform going the process generates its own enthusiasm and resources to get things done.

That’s where we are now.

The Federal Government needs to now provide a clear blueprint of the way forward. A sort of “to-do” list on tax reform.

But that To-do list should divide Tax Reform up in to the no-brainers which can be done right now, the achievable reforms which need a little bit more work and the controversial reforms which need a lot more work.

Each of these three categories should be given a deadline for completion so there is accountability. But the process has to start now.

Coming out of the Tax Forum there were quite a few no-brainers which could be implemented now which would also build public confidence that the Government is serious about tax reform.

. Harmonisation of State Taxes.

Yes State Governments need to have their own taxes to raise revenue to pay for services. And, yes, some of them (like payroll tax and insurance duties) are inefficient and crazy.

Getting rid of these inefficient taxes will take a long negotiation between the States and the Federal Government.

But one thing which can happen now is to atleast have all these State taxes calculated and defined the same way. Afterall, we are meant to be one country. How inefficient, and just plain dumb, to have the same tax calculated and defined differently across different States.

It’s a nightmare for business operating in this one country… not 6 different ones.

Sure each State relies on revenue from different taxes depending on their business, property and demographic base.

Appoint an independent commission which sets the uniform tax definitions, calculations and rates so that in the end each State ends up with the same level of revenue.

There has to be give and take between the States but they can blame the independent commission.

. Make a statement of principle about social and environmental taxes.

The Australian public is sceptical about politicians and taxes. No matter what the reason for a tax we just presume it’s blatant revenue raising.

We have every reason to be sceptical because, often, new tax revenue does just go into general revenue.

State and Federal Governments should commit to the principle that all road tax revenue goes to fixing roads. That alcohol tax revenue goes to the health system and initiatives to deal with alcohol related issues. Any congestion tax should go to public transport. You know what we mean.

Here are State and Federal Government’s committed to the environment. But we were stunned when, for example, the solar rebate incentives were wound back because they were too popular and costing more than expected.

Too popular. Shouldn’t that have been applauded rather than scaled back. It made you wonder whether they really cared about the environment or just the dollars.

. Sort Out Anomalies

The Tax Forum showed up a whole range of tax issues which are just plain stupid and should be solved quickly and easily.

Why is it cheaper for a business to buy an electric hot water system than a solar one when depreciation and operating costs deductions are taken in to account?

Why are tax concessions on capital gains and negative gearing so much more attractive than investment interest earned.

There was strong support for a cap on negative gearing tax advantages for non-productive assets. Maybe put a 5 year limit on it for each investment or don’t index it.