The Tax Debate, Pressure Groups and the 1998 Federal Election

Abstract

Abstract In contrast to previous attempts at comprehensive taxation reform, the dynamics of the most recent debate were distinguished by two key elements: a relatively high degree of unity among business associations and the formation of an unprecedented reform alliance between the business and welfare sectors. All participants in the debate were influenced by the failure of consumption tax reform as part of the Coalition's Fightback! package in 1993 and as part of Treasurer Keating's ‘Option C’ in 1985. The Government were motivated by a conviction that welfare and church opposition proved fatal to Fightback!, while business felt that their opposition may have been decisive in 1985. From mid 1996 the peak business and welfare bodies met to promote comprehensive tax reform and to develop a consensus position for submission to the Government. The formation of the Business Coalition for Tax Reform supports the view that business associations are increasingly adopting more sophisticated roles in the public policy process and attempting to overcome the fragmentation which has plagued their efforts by a strategy of forming ad hoc, issue-based coalitions of associations. For their part, Labor did not wish to appear isolated on tax reform and sought desperately to detach the peak welfare body, the Australian Council of Social Service (ACOSS), from its alliance with business. The pressure to which ACOSS was exposed demonstrated how its support had become a valuable political commodity for both business and Labor in the pre-election tax debate.