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| Henry Tax Review | |
|---|---|
| Name | Review of Australia's Future Tax System |
| Other names | "Henry Tax Review" |
| Commissioned by | Kevin Rudd, Australian Treasury |
| Author | Ken Henry |
| Published | 2009 |
| Pages | 592 |
| Report type | Tax review |
Henry Tax Review The Review of Australia's Future Tax System was a comprehensive 2009 inquiry led by Ken Henry that proposed reforms to Australian taxation and fiscal arrangements. Commissioned by Kevin Rudd and conducted through the Australian Treasury, the report sought to reshape revenue architecture across jurisdictions including Commonwealth of Australia, State of Victoria, State of New South Wales, and State of Queensland. The review influenced policy debates involving figures such as Wayne Swan, Peter Costello, Joe Hockey, and institutions like the Reserve Bank of Australia, Productivity Commission, and Organisation for Economic Co-operation and Development.
The review was announced by then-Prime Minister Kevin Rudd and Treasurer Wayne Swan in 2008 following concerns raised during interactions with the International Monetary Fund, G20 leaders, and domestic consultations involving Business Council of Australia, Australian Council of Trade Unions, and the Australian Local Government Association. Chaired by Ken Henry, the panel included members from entities such as the Australian Bureau of Statistics, Commonwealth Grants Commission, Australian Prudential Regulation Authority, and academia represented by professors affiliated with Australian National University, University of Sydney, and University of Melbourne. The commissioning aimed to address fiscal challenges highlighted in reports from the Intergenerational Report (Australia), Treasury White Paper discussions, and submissions from organisations including Institute of Public Affairs, Grattan Institute, and Business Roundtable.
The review recommended broad measures including the introduction of a comprehensive GST enhancement, expansion of the income tax base through removal of certain concessions, introduction of a Resources Rents Tax-like framework akin to policies proposed by Ralph T. Hudson debates, and the adoption of a land tax reform drawing on principles from Henry George-inspired models. It suggested consolidation of fringe benefits tax and simplification of superannuation arrangements similar to reforms discussed within Australian Securities and Investments Commission policy circles. The report urged consideration of a federal-state revenue-sharing model involving the Commonwealth Grants Commission, structural adjustments comparable to proposals from Peter Costello and critiques from Nick Greiner.
The economic rationale drew on frameworks from Organisation for Economic Co-operation and Development, International Monetary Fund, and modelling techniques used by the Reserve Bank of Australia and Productivity Commission. It argued that base-broadening measures would improve efficiency as discussed in literature by John Maynard Keynes, Adam Smith, and contemporary analyses by Paul Krugman and Joseph Stiglitz. Fiscal projections referenced intertemporal budget constraints similar to those in the Intergenerational Report (Australia) and macroeconomic scenarios tested against shocks like the Global Financial Crisis of 2007–2008. The report employed microsimulation methods used by research groups at Australian National University, Grattan Institute, and the University of Melbourne to assess distributional impacts, drawing comparisons to tax policy reforms in United Kingdom, Canada, New Zealand, United States, and Sweden.
Political responses spanned support and rejection across parties: the Australian Labor Party leadership under Kevin Rudd initially embraced discussion, while opposition figures in the Liberal Party of Australia including Malcolm Turnbull and later Tony Abbott critiqued aspects. State leaders such as Catherine King and premiers like John Brumby and Anna Bligh engaged in negotiations over revenue sharing. Implementation of select recommendations—such as adjustments to GST policy debates and consolidation of some tax expenditures—was handled via legislation debated in the Parliament of Australia, involving committees like the Joint Standing Committee on Treaties and scrutiny from Parliamentary Budget Office. International commentary came from bodies such as the World Bank and OECD tax experts.
The review influenced reforms in Australian taxation policy including changes to fringe benefits tax, adjustments to superannuation rules, and ongoing debates about GST distribution among State of Western Australia and other states. It affected administrative practice at the Australian Taxation Office and informed subsequent fiscal planning by treasuries in jurisdictions like Northern Territory and Australian Capital Territory. The report’s recommendations featured in policy platforms of leaders including Julia Gillard and shaped dialogues at forums such as the Commonwealth Heads of Government Meeting and meetings of the Council of Australian Governments.
Critiques arose from a spectrum including conservative think tanks like the Institute of Public Affairs, centre-left commentators at the Australian Council of Trade Unions, and economists associated with Monash University and University of Queensland. Controversies centered on perceived impacts on low-income households highlighted by advocates from Anglicare Australia and St Vincent de Paul Society, concerns about state revenue erosion voiced by state treasurers in State of Tasmania and State of South Australia, and debates over the political feasibility flagged by commentators at The Australian and Australian Financial Review. Academic critiques referenced analyses by Gregory Mankiw-style efficiency debates, and lobby groups including the Minerals Council of Australia and Australian Industry Group contested resource taxation elements.
Category:Taxation in Australia