Yet challenges are emerging. Questions such as the size of our governments (both state and federal), what services we expect them to deliver, how these are to be funded, and what groups should bear that burden are the important questions of our time because the responses have the capacity to impact social cohesion and the very Australian sense of 'a fair go'.
On 30 March 2015, the Federal Government released a tax discussion paper Re:think, Better tax system, better Australia
which formally starts the process for developing the White Paper for Reform of Australia's Tax System. The release of Re:think provides us with an opportunity to consider the inherent tensions in our system and to draw out nuances and perspectives.
"The continued prosperity of the Australian economy requires the government to seriously grapple with tax reform, to ensure that Australian businesses can compete, long-term, in the global marketplace."
National Managing Partner, Tax
For decades our governments have been able to deliver these services on the back of a demographic bubble that delivered proportionately more tax payers than tax consumers and more recently because of an extraordinary surge in our terms of trade due to the China resources boom. The demographic bubble is turning into a demographic deficit and the pace and scale of future growth looks less certain. The social compact that has developed between the Australian people and their governments is under threat unless we deal with tax reform.
Tax reform is a key element to achieving growth, to ensuring stability in the fiscal positions of our governments and to achieving a new social compact. In our view, done properly, tax reform is not a question of creating winner and losers.
KPMG intends to, as it has always done, lead a national conversation on the important and far reaching issue of a new compact with the Australian people on the matter of tax and services delivered.
We look forward to working with you on the journey.