Waiting for Ken

One big question hangs over the Treasurer, Wayne Swan, as he works on shaping this year’s budget.

That is when to release Ken Henry’s report on the future of Australia’s ramshackle tax system.

The future of the Rudd government, itself, might well rest on Mr Swan’s decision.

That’s because the Coalition, under Tony Abbott, has already signalled that it is prepared to make tax a central issue in the Federal elections, which are due later this year.

Mr Abbott did that when he declared the Federal government’s now stalled Emissions Trading Scheme nothing than a great big new tax.

Mr Swan has promised that he will release the report, prepared by his Treasury Secretary, before the Federal budget that hewill  bring into Federal parliament next month,

However, with State Premiers proving recalcitrant, over the Prime Minister’s health reforms, the report could be released earlier than that.

Under Kevin Rudd’s plan, a significant slice of the GST revenue, that John Howard promised to the Premiers, would be diverted to the nation’s hospitals instead.

So the Federal government may have to offer them something else  from the tax pot, to persuade the States and Territories to accept its health plan.

Their acceptance is critically important to Mr Rudd as  he wants to fight the upcoming Federal election on health.

Mr Rudd has already promised that he will order a double dissolution, to settle the issue  if the Premiers don’t agree to his plan.

That is always a risky step, for any Federal government.

Mr Henry gave his report to the Federal government several weeks ago.

It recommends sweeping changes – and modernisation – of Australia’s hideously complex tax systems.

Our expectations, though, should not be too high.  No government is going to undertake wholesale tax reform, just months before a Federal election is due.

Even Mr Rudd is well aware that going down that path would, in the words of Sir Humphrey Appleby, be a “courageous decisions.”

That is one that would cost the Government the next election.