Australia’s Swan Says Nothing Off Limits at Tax Forum Debate

By Joe Schneider - Oct 2, 2011 10:54 AM GMT+0700

Australian Treasurer Wayne Swan said no topics, including a national sales tax and a proposed mining tax, will be off-limits at this week’s tax forum discussions in Canberra, disputing earlier reports those issues wouldn’t be considered.

“Nothing is taboo,” Swan said in an e-mailed economic note released today. “Participants that mention the mining tax or the GST won’t have their microphones cut off or be thrown out by bouncers.”

Prime Minister Julia Gillard agreed to the review of the country’s tax system at the forum, scheduled for Oct. 4 and Oct. 5, as part of a deal with independent lawmakers to gain their support for her minority Labor government. Gillard and Swan had earlier ruled out changing the 10 percent national sales tax on most goods and services, altering a tax on carbon emissions or the mining tax.

“Many are skeptical that the tax summit will deliver any changes at all,” Haslam chartered accountants said in a Sept. 22 note on their website. “Aside from the bungled mining tax,” the government “is still trying to force through a grossly unpopular carbon tax,” the firm said.

The government plans to charge the country’s biggest polluters A$23 ($22) per metric ton of carbon dioxide from July 1 in a bid to reduce emissions 5 percent by 2020 from their 2000 levels. The tax is forecast to raise A$27.8 billion in three years.

Support Falls

Support for Gillard has fallen since she announced the carbon tax in July, reversing a pledge made before last year’s election that the government wouldn’t make such a move. Gillard had an approval rating of 23 percent, a six percentage point decline in two weeks, in a Sept. 6 Newspoll survey published in the Australian newspaper.

Gillard also plans to impose a 30 percent tax on profits generated by coal and iron ore mining companies. The tax is scheduled to take effect in July and is forecast to raise A$7.7 billion in its first two years.

The government plans to use the tax revenue to cut the corporate tax rate to 29 percent from 30 percent, encourage retirement savings and pay for roads and railways.

Even though Swan said he’ll listen to all points of view, he indicated some decisions made already won’t be changed. He didn’t specify which.

“It’s just common sense that the government isn’t going to hit the reset button on policies that we’ve already consulted on extensively,” he said. “Likewise, we’re not going to revisit policies that we’ve ruled out in the interests of business and community certainty.”

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net