Monday, June 01, 2009

Ergas Tax Review

I can easily be accused of obssessing about Henry Ergas. My letter to the SMH to point out they had incorrectly awarded him a doctorate was unpublished. I have, however, pursued him through various channels for failing to declare that he was conducting a tax review for the Liberal Party when writing (particularly columns in the Oz and Communications Day).

The SMH article referred to above stated in May that;

He said Dr Ergas would publish discussion papers, consult widely and convene a tax reform conference before handing a report to the Coalition by late 2008 or early 2009. None of those things have happened. An Ergas review website set up by Mr Turnbull has been dormant for months.

It now becomes apparent that the reason for that somnelence was that the outcome of the tax review was presented to the Liberal Party in "June or July" 2008 according to Glen Milne writing in the Oz. It is claimed that the Ergas review resulted in exactly what you'd expect from that source, a classic "neoliberal" view of tax that moves to flat rate income tax, argues that, effectively, because of deregulated markets our tax policy needs to be "competitive" because we face flights of capital and skill if we don't have the world's best tax system, and, more bizarrely, that taxes on alcohol and tabacco should be cut because they are distortionary.

This is all very fascinating and explains a couple of things. Firstly why it hasn't been released. Secondly why Ergas hasn't felt the need to declare the conflict because the assignment has ended. And thirdly Milne makes it clear the work was done "pro bono" though I suspect that still means it is a contribution in kind to the Liberal Party and will need to be included in the declaration of donations.

But the really interesting question is how come Milne had the story? he story is highly unflattering to Malcolm Turnbull as it highlights that he undertook the work without advising his leader, and that the outcome is politically putrid. Given Milne's record as the chief urger for Peter Costello could this be the start of a challenge, have the Costello forces finally had enough of Malcolm?

Watch this story, I suspect it has further to run. And let's see if the Government has the courage to goad the coalition into releasing their review.

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