"15. Tax reform can also play a key role in allowing Australia to take full advantage of the mining boom. On that front, we welcome the recent review of the tax system as it provides a comprehensive blue print for tax reform issues. The planned introduction of the mineral resource rent tax is a step in the right direction and enables a reduction in the company tax rate. The resource rent tax also strengthens the automatic stabilisers in the budget, but we note that it is less effective in that regard than the original proposal. Consideration should be given to broadening the coverage to other mineral resources. Another objective of tax reform should be to facilitate the re-allocation of resources so that Australia can fully benefit from improved terms of trade. We would therefore welcome more reliance on consumption-based taxes. This would allow for the elimination of inefficient taxes at the state level that impede labour mobility and allow for reductions in federal personal income taxes that would encourage increases in labour supply and saving."
Comment: Well... I'm still waiting for the state of Victoria to make good on the promises that were made, by politicians before the GST was introduced, to abolish certain state taxes. I think payroll tax was one of them, stamp duty on real-estate transactions for another ? But I do give the state credit for abolishing the bank debit tax, that was so generous of them.
I do, however, have one other suggestion for the iMF that they may wish to include in their next report that would save this country many billions of dollars.
