Henry is a great admirer both of the Treasurer, Peter Costello, and the former Senator, former Secretary of Treasury and constant worrier about Australia’s future, John Stone. So it pains Henry to present John Stone’s powerful critique of the Treasurer, but honesty compels us to do this.

Australia could have afforded some serious reform of income tax, as Henry has often said. The results of such reform would have turned an excellent economy into one of the worlds most dynamic.

Stone is critical of the Treasurer’s recent budgetary policy, not just because he has “barely addressed the growing demand for tax reform”, but for “the surpluses still left in the Treasury’s coffers, rather than handed back to the people whose money they were in the first place”.

Stone highlights “the money unreturned to taxpayers by the Treasurer in his last three Budgets amounted to 81%, 160% and 144% respectively of the amounts he grudgingly gave back”, which would have enabled him to reduce “personal income tax (over the respective four-year forward estimates periods) by 181%, 260%, and 244% of the amounts by which he actually did reduce it, while still leaving his Budgets balanced in each case.”

Stone attacks Costello’s poor record on tax reform: “First, he has given us back in personal income tax reductions only 45% of the amount he could have given back while still leaving his underlying cash position in balance. Second, even those tax cuts that he has provided have incorporated little genuine tax reform.”

Stone, however, leaves his most stinging criticism for the Treasurer’s aspiration for becoming Prime Minister: “Recent events have again demonstrated that Costello is someone who, far from seeing his career as an opportunity to serve his country, has been, and remains, wholly focused on his own personal demands.

“He has produced eleven budgets, the last ten of them undistinguished by any reforming quality. His 2005-06 Budget was widely, and rightly, seen as a huge wasted opportunity in terms of tax reform. His 2006-07 Budget was if anything an even greater wasted opportunity.”

It is never too late to follow this path, and we urge our good friend Peter Costello to heed the advice of our other good friend, John Stone.

Read more at Henry Thornton.