Tax reform must be explained: Parkinson

Much-needed tax reform must be properly explained across the community if it is to be successful, Treasury secretary Martin Parkinson says.

Treasury Secretary Martin Parkinson

Martin Parkinson concedes making each individual element of tax reform fair is almost impossible. (AAP)

Martin Parkinson concedes that making each individual element of tax reform fair is almost impossible.

Instead, the Treasury boss believes what matters is whether the complete reform package delivers fair outcomes.

The Abbott government has committed to completing a tax review white paper before the end of 2015 and to take any proposed changes to the next election.

The Business Council of Australia has told the government it's time for proper tax reform rather than just tinkering around the edges.

"It is time to do this properly," the council's president Catherine Livingstone said releasing a discussion paper at a tax forum on Thursday.

Ad hoc changes dressed up as serious reform only serve to squander the community's tolerance for necessary change, she said.

Dr Parkinson told the forum, hosted by BCA and PricewaterhouseCoopers, that it was important public debate about having the best taxation system was grounded in facts.

"At the moment, the facts and debate do not necessarily correspond," he said.

To get the community on board, the case for reform needed to be compelling and well-understood.

The public needed to understand how reforms would deliver increases in living standards even if explaining the benefits was difficult and complex.

"If there is an expectation that each individual element of a reform package must be fair, reform will be almost impossible to achieve," Dr Parkinson said.

"Instead, what matters is whether the complete reform package delivers fair outcomes."

Shadow treasurer Chris Bowen promised the opposition would be constructive and proactive during the tax review, noting the coalition refused to attend a tax summit while Labor was in office.

"I thought that was a particularly immature and short-sighted response to what are important national questions," he told the National Press Club in Canberra.


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