With my old financial journalist colleagues really dreading the trip to Canberra to cover the outcomes of the Henry Tax Review, potentially 138 changes to Australia's tax system, who could blame me? But with just five of the recommendations taken up, plus some additional measures on superannuation, it wasn't so bad, for us journalists to go through anyway.
It was being billed as possibly the biggest reform to taxation in decades. Was it? The resounding response, is no.
Still, the centrepiece of the review is a 40 per cent Resource Super Profits Tax, a somewhat steal from the rich, and give to the poor strategy.
Michael Happell, the national energy and resources leader at PriceWaterhouseCoopers warns as is, the new tax may see an exodus in the long-term of investment dollars from Australia to other resource rich regions.
But given Australia's economy is largely being driven by the resources boom, a boom which still has plenty of legs, it's unsurprising such a tax has been devised. This boom has led to a rise in commodity prices, boosting exports and as a result, profits and wages locally. That in turn is adding to inflation and rising interest rates.
Economists at St George say, if the new tax means the resources sector grows a little bit slower than it other wise would, and interest rates are a little lower than they would be without the tax, then it maybe a useful tool in helping smooth the balancing of resource allocation with our economy.
Mining companies have until the 2012/13 year to prepare for the measures when they come into effect, and even then, there's a 5 year phase-in.
To help offset that to a small degree, is a lowering of company tax rates by 2 percentage points to 28 per cent by 2014/15. The small business tax rate will fall to 28 per cent, earlier, by 2012.
As for the super reforms, Mike Forsdick, a partner at PriceWaterhouseCoopers, says the impact on individuals will be positive with the exception of higher income earners who can expect to see a reduction in the tax concessions on their contributions. While for business, there will be increased costs, but higher benefits for most Australians.
The guts of the plan, sees a phased rise in the compulsory employers super guarantee from 9% to 12% by 2010.
But 12% still isn't enough according to Noelle Kelleher, a tax parter at Deloitte. Quoting one of its surveys, Kelleher says a sliding scale of compulsory contribution rates, based on the employee's age would be preferred, where the top rate would be 15% for those over 50 years old, 12% for those between 35 and 49 and 9% for employees below 35 years of age.
What we will see though are more government payments for low-income workers into their superannuation, a handout of $500 for those earning less than $37,000.
The main advantage higher paid Australians will have, is the ability to contribute $50,000 in concessional super contributions if their super balance is below $500,000 and they're over the age of 50, from July 2012.
Interestingly, these changes to superannuation, weren't part of the Henry Tax Review.
The focus has also been on what has been left out of the review; no change to taxes on petrol, luxury cars or alcohol; the Medicare levy hasn't been removed; nor recognising the family home in means tests. These are just a few of a long list prepared by many economists.
There'll be negligible budgetary impacts according to CommSec, but we'll get confirmation of that next week, when the Federal Budget hands down on May 11.
