Since the mid-1980s, Australian tax reforms have been aimed mainly at increasing tax neutrality through base broadening and rate reductions. In addition, improved operational efficiency and system integrity were sought through improve ments in tax legislation, administration and compliance.
Reform did not bring much change in the broad tax architecture, nor tax revenues relative to GDP, nor systemic progressivity. The earlier rounds related mainly to income tax (including superannuation arrangements) and tax administration. Introduction of the GST in 2000 brought a measure of indirect tax reform.
Set against the reform effort is the continuous erosion of the performance of the system. This results from sectional interest-based policy making, the emergence of new or increased avoidance and evasion opportunities, and the ongoing pressures from wider changes in technology, socio-economic patterns and demography. Consequently, to maintain performance assessed against standard axioms, tax systems require continuous, or at least regular, adaptive change. However, the political difficulties associated with policy change have in practice meant that reform has proven a punctuated and unreliable process.