Backing economic reforms

So it seems voters can still back big economic reform after all.

Mike Baird's strong win in NSW on the weekend was a resounding endorsement of his plan to reinvest $20 billion of money currently locked up in electricity distribution networks into much needed transport infrastructure.

His federal colleagues are hoping to emulate this political formula, with Treasurer Joe Hockey yesterday formally kicking off the long delayed national tax reform debate.

The government's discussion paper puts forward a strong case for tax reform. It argues our tax system is too complex, overly reliant on income tax, has too many taxes which raise very little revenue, and that its 1950s design is a poor fit for the modern day.

It notes that taxes on property comprise about nine per cent of GDP in Australia compared to an OECD average of just five per cent.

Critically, it also argues that elements of our tax system are an unnecessary handbrake on the economy and employment. It singles out stamp duty as a tax that inhibits transactions and is unfair as it taxes the total transaction and not the value add.

Taxes are supposed to lean lightly on the economy, yet stamp duties do anything but.

This needs to be at the heart of the tax debate: how to achieve economic growth through a better tax mix.

Next month the Property Council will be releasing new research and a detailed tax position paper that will shine a light on this issue.

So let’s debate our taxes with a view to getting rid of the worst ones, to deliver the lower, simpler, fairer system the Government proposes and the country deserves.