return to letters list

Expenditure focus as vital as tax reform
letter published in The Australian, 2 October 2010

("Promote informed tax debate", Commentary, 1/10).

The Government has promised to limit expenditure increases to no more than 2 per cent per annum in real terms, which one hopes still holds.

But there is enormous scope to reduce benefits to higher income groups and at the same time cut taxes. This is possible because such groups receive back nearly half the taxes they pay, a churning that is a useless product of a society that has become bureaucratised by political parties buying votes.

The danger in looking first at tax reform is that any resultant increase in the efficiency of taxes will encourage politicians to leave tax levels unchanged or even increase them. Tax reform should be accompanied by a review of expenditures and of government spending policies.

Des Moore, Former deputy secretary, Treasury, South Yarra, Vic

NOTE. Deleted was the reference to my 2005 report for the Australian Chamber of Commerce and Industry on the scope for reducing expenditure.

return to letters list