The Federal Tax Review and the States

Kenneth Wiltshire of the University of Queensland Business School has written extensively on comparative federalism and has recently completed a nine year term as a member of the Commonwealth Grants Commission.

So you would expect him to know something about our constitution, and the roles of the States and the Federal government - and the disbursement of tax dollars within and across our federation. Today he has an opinion piece in the usual location in "The Australian" on the current federal tax review.

It’s a well argued piece but he seems to take the position that we have a Federation of States and that is how it will always be - regardless of our national need and our ability to evolve and change.

He takes aim at the Federal Treasury and it’s Secretary Ken Henry as though they have positioned themselves as being above and beyond our constitution - he accuses them of ignoring the interests of the states.

Personally I don’t see a problem. I would much rather have Ken Henry in charge than any of the various State Treasurers or Under Treasurer’s - who simply aren’t "up to it" and have demonstrated that for decades. These regional politicians and functionaries seem to enjoy playing the role of the "dumb cousin" to the Federal Treasury’s "responsible father".

If we had even one State Treasurer or Under Treasurer over the past hundred years, who had shown enough gumption, promise and competence to have risen to the top then we would not have the mess of duplication that is infecting our nation and hindering our ability to deliver quality services to the Australian people.

Instead, we have an amalgam of waste, cost shifting, duplicate taxes, finger pointing, blame and even corruption that has been coming from the states for many decades. They simply can’t be trusted to look after the national interest - in many cases they can’t even look after their own interests.

So to Ken Henry - I say go for it. Review the tax system and the payments system as much as you like, and if that annoys the states and their apologists then bad luck.

If they are sufficiently concerned about it then they will get their own house in order and demonstrate that they can do better - but I won’t be holding my breath.