WHY ARE WE HAVING IT?
Because Kevin Rudd and Wayne Swan botched their last big attempt at tax reform. Rather than seek opinions about how mining should be taxed, they released details of their Resource Super Profits Tax with the Henry Review on May 2, 2010, and declared they wouldnt back down. They did back down, one of them lost his job and in September 2010 mining entrepreneur Twiggy Forrest had a word in the ear of independent MP Rob Oakeshott as he was deciding who he would support to form the next government. As part of the price for his support Oakeshott demanded a tax summit.
WHOS INVITED?
Just about the most high-powered group of tax experts ever assembled, representatives of special interest groups and some entertainers. Channel Nines Ross Greenwood and Channel Sevens David Koch score invites as community representatives . Among the tax experts are
Ross Garnaut, Saul Eslake, John Freebairn, Neil Warren, Deborah Cobb- Clark and Chris Evans not all of them household names, but all of them the specialists who have thought most deeply about the topic. NSW will be represented by Treasurer Mick Baird, Victoria by Treasurer Kim Wells. Nick Greiner and John Brumby return to the limelight by virtue of the membership of the governments GST distribution review panel. Independent MPs Rob Oakeshott, Tony Windsor, Andrew Wilkie and Nick Xenophon will be present as well as Greens senators Bob Brown and Christine Milne, DLP senator John Madigan and National MP Tony Crook. Notably absent will be any member of the opposition. Treasurer Swan says they would have been welcome had they been prepared to be constructive. Swan and Gillard will open the summit, Swan will close it.
WHO TO WATCH
Former Treasury boss Ken Henry (pictured) will kick off day two with a 10-minute talk about the Henry Review. Also worth watching will be Greg Smith, a former senior Treasury official who crafted many of the chapters of the Henry Review sitting alongside Henry and Heather Ridout of the Australian Industry Group, who also worked on the review. Smith and Ridout know about as much as Henry and are freer to speak, not being government employees.
IDEAS THAT MIGHT GET UP
Keeping the whole thing going. Academics and business groups are calling for an ongoing
tax reform commission or commission of budget integrity to continue to prod this government and the next long after the summit is over. Eventually we will need unpopular medicines
such as an increased GST, the argument goes. When the time comes itll be better for the
arguments to come from a body independent of government with research clout.
WHAT WILL HAPPEN?
Itll function like a TV show, streamed on the web. Hosts Michael Pascoe (below left) and Paul Clitheroe (below right) will take turns hosting discussions about business tax, state taxes, social and environmental taxes, welfare payments, personal tax and governance of the tax system. Standing in the centre of the Great Hall of Parliament House with delegates
seated around them in concentric circles, they start the discussion and invite delegates to speak. Different delegates will be seated at the front for each session those with the most to say. Mr Swan says no topics have been banned from discussion participants that mention the mining tax or the goods and services tax wont have their microphones cut off .
But there are no sessions to deal with consumption tax, mining tax or superannuation the topics the government would rather not have discussed. Anyone who wants to discuss those topics will have to do so in a session devoted to something else. There will be no communique, just a transcript no set of recommendations with which to bother the government.
DANGEROUS IDEAS
Surprising alliances are being formed. The Business Council is arguing demographics mean we will have to be prepared to pay more tax, the sort of line that once would have been the preserve of the Council of Social Service. ACOSS itself is arguing for an end to excessively
generous benefits such as the Senior Australians Tax Offset, the sort of line that would have once come from business. The bottlers of Jacobs Creek, Penfolds and Wolf Blass have broken ranks with the rest of the wine industry and are calling for wine to be taxed per unit of alcohol as is beer, an idea that might have found traction this week were it not for the Treasurers trick of ensuring theres no place at the summit for the discussion of consumption taxes.
UP FOR DISCUSSION
TODAY
Business tax
State taxes
Environmental and
social taxes
Speeches by Prime Minister Julia Gillard, Treasurer Wayne Swan and Independent MP Robert Oakeshott
TOMORROW
Transfer payments
Personal tax
Tax system
governance
Speeches by Dr Ken Henry and Assistant Treasurer and Financial Services and Superannuation
Minister Bill Shorten
Frequently Asked Questions about this Article…
What was the purpose of the Australian Tax Summit described in the article?
The summit was held because the government wanted a broad, public forum on tax reform after previous attempts — notably the Resource Super Profits Tax episode in 2010 — proved politically costly. Independent MP Rob Oakeshott insisted on a tax summit as part of his support deal, so the meeting aimed to gather expert views and public debate on tax issues.
Who attended the tax summit and which experts should everyday investors watch for?
The summit brought together a high-powered group: tax experts such as Ross Garnaut, Saul Eslake, John Freebairn, Ken Henry and others; state treasurers (Mick Baird, Kim Wells); independents (Rob Oakeshott, Tony Windsor, Andrew Wilkie, Nick Xenophon); Greens senators and other MPs. Ken Henry and former Treasury official Greg Smith were highlighted as speakers worth watching for clear analysis of the Henry Review.
What topics were scheduled to be discussed at the summit?
Sessions explicitly covered business tax, state taxes, environmental and social taxes, welfare/transfer payments, personal tax, and governance of the tax system. The agenda included speeches by the Prime Minister, the Treasurer and other senior figures, with follow-up sessions on transfer payments, personal tax and tax system governance.
Will consumption tax, the mining tax or superannuation be formally addressed at the summit?
Although participants were not banned from mentioning the mining tax or GST and microphones wouldn't be cut off, the summit had no dedicated sessions for consumption tax (GST), the mining tax or superannuation. Those topics could only be raised within other sessions rather than through a stand‑alone agenda item.
How was the summit run and how can the public follow what happened?
The summit was run like a TV discussion and streamed on the web, hosted by Michael Pascoe and Paul Clitheroe in the Great Hall of Parliament House. Delegates were seated in concentric circles and invited into discussions; the outcome was a transcript rather than a formal communique or set of recommendations.
What kinds of new ideas or alliances emerged at the summit that investors should know about?
The article notes surprising alliances: the Business Council suggesting demographics may require higher taxes; ACOSS arguing for cuts to overly generous benefits; and major wine bottlers (Jacob's Creek, Penfolds, Wolf Blass) breaking ranks to support taxing wine by unit of alcohol like beer. These shifts could signal changing public sentiment on consumption and welfare settings.
What outcomes should investors expect — will the summit produce firm recommendations or policy changes?
The summit was designed to produce public discussion and a transcript, not a formal set of recommendations. However academics and business groups were urging an ongoing independent tax commission or budget integrity body to keep pressure on governments for future reform, so any firm policy changes would likely follow further processes.
How might the tax summit discussions affect everyday investors in the short term?
Short term, the summit itself mainly provided debate and expert views rather than immediate policy change. Investors should watch for follow‑up moves — calls for an independent tax commission or talk of GST increases — because those longer‑term proposals could affect consumer demand, corporate profits and tax settings down the track.
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