Taxing times : a political retrospective

Two years after the introduction of the goods and services tax (GST) in Australia it is perhaps timely to reflect on the broader political significance of Australia's recent experience in relation to tax reform. The goal here is not to comment on the effectiveness of the new regime, but to provide an assessment of what the Australian experience tells us about the tax policy process and the broader issue of the governance of Australian economic policy. Can we interpret the eventual introduction of a GST after thirty years of struggle as a maturing of Australian politics? Alternatively, are the deadlocks and protracted political debates experienced in relation to tax reform in recent years likely to persist as future governments attempt to adapt the national tax base to the challenges of the 21st Century? The following article will shed light on these issues by applying the political science literature to identify the characteristics of the policy process which are likely to enable national governments to achieve potentially contentious tax reform proposals. Having established this framework, the study evaluates Australia's experience in relation to tax reform over the past thirty years. While the article notes several important developments between the Asprey Inquiry of the mid-1970s and the introduction of the Howard Government's A new tax system in 2000, it is argued that a combination of historical and institutional features of the Australian policy environment continue to limit the governance capacity of the Australian state. The article concludes by discussing the implications of this finding for the ongoing reform of Australia's taxation system.