CCH Australia - News - Henry says tax debate needs to improve

Henry says tax debate needs to improve

20 August 2012 | Content provided to you by AAP.

The debate about Australia's tax system needs to be a "hell of a lot better", the author of the latest tax review says.

Former treasury secretary Ken Henry told a business forum if governments don't lead change, change will be forced upon.

"You want to avoid putting yourself on a burning platform," he told the Australian Industry Group gathering in Canberra on Monday.

"In order to get to the place that we need to get to, we are going to need a hell of a lot better debate."

Dr Henry agreed with current Treasury Secretary Martin Parkinson, who in a speech last week warned governments may have trouble meeting demands for spending from the existing tax base.

Dr Henry said commonwealth tax revenue, as a ratio to gross domestic product, would not return to where it was before the global financial crisis - at least not under the present system.

He said state revenues were in a much worse position, describing it as "fragile".

"At the moment, it looks okay for the resource rich states, and for the others it looks desperately bad," Dr Henry said.

"But even for the resource rich states, at some stage the royalties will deliver less revenue than they have been delivering. They are going to front a grimmer fiscal reality as well."

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