Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I thank Senator Murray for that question and for his reference to the OECD report, to which I think I referred last week. That report was a glowing report on the Australian economy, making the very important point that living standards in this country are now second only to the United States when compared to the major industrial countries of this planet. It made the point that the reform program that was, to their credit, begun by the Hawke and Keating governments and continued with great vigour by our government—particularly in the area of industrial relations—has produced one of the most robust economies in the world.

The report referred to the issue of tax reform. As Senator Murray knows, we have done an enormous amount in the area of tax reform, most particularly in the last budget. I think, from recollection, the Treasurer, in his response to the OECD report, did note that the OECD reminds us that reform is an ongoing process; that, in relation to any economy of the standard of Australia’s, reform has to be a continuous process. I think the Treasurer particularly noted the fact that the OECD regards our industrial relations changes as important but only part of the process of reform and that the OECD had referred, helpfully, to areas in which further tax reform could be conducted.

It is not for me to indicate one way or the other what might be in next year’s budget, but I do indicate that we do keep very much under observation suggestions as to how the Australian tax system could be improved. I acknowledge Senator Murray’s interest in the area of the effective rate of tax on the lower paid members of our community. He shares with us an enthusiasm for ensuring we constantly seek to increase the participation rate in the Australian workforce. That is going to be critical to our capacity to deal with the major challenge we face of an ageing population. It is very important that the government keeps under review constantly the impact of both its tax and welfare policies on the incentives to participate in the workforce. So, without saying what might or might not be in next year’s budget—because we are nowhere near considering that—I would say that this is an area that is kept constantly under review, and we will have in mind, as we approach next year’s budget, the full range of suggestions that come from the OECD and others.