Howard calls for tax reform

Political gridlock is stopping Australia from embarking on economic reform, according to former prime minister John Howard.

Speaking at a post-Budget breakfast in Perth yesterday, Mr Howard said the Federal Government needed to revisit taxation reform in a “big way”.

Mr Howard, who introduced the GST, said many of the problems facing the States in regards to the tax would have been solved had food been included.

But, he said, it was dropped as part of a political compromise.

“Some of the GST difficulties of the States, not only here in WA, might have been ameliorated if the GST had applied to food as was originally intended,” Mr Howard said.

“That would have yielded in today’s dollars about another $13 or $16 billion a year.”

Mr Howard said he did not believe GST reform was possible in the current Parliament and the public needed to be made aware how a political deadlock was holding the country back from serious economic reform.

“I don’t think it will be possible in this Parliament,” he said.

“The Labor Party and the Greens will oppose it and enough of the others will oppose it.

“The public has got to understand that we have this political gridlock. I do want the public to understand that.

“We’re starting to fall behind when it comes to economic reform and one of the things that I hope that comes out of this Budget is a revitalisation of the debate we need to have about ways of getting around the political gridlock holding up further economic reform.

“We do need to revisit taxation reform in a big way because we are going to fall behind and that’s one of the reasons why Malcolm Turnbull and Scott Morrison are arguing for this enterprise tax reform.”

Mr Howard’s comments came after he told a similar event in Canberra he was “uneasy” about the Federal Government’s proposed levy on the big banks.