Implications for Local Government from Henry Tax Review

The Australian Centre of Excellence for Local Government (ACELG) has published a new Working Paper called The Henry Review of Australia's Future Tax System: The Implications for Local Government. It was released to coincide with the National General Assembly of Local Government held in Canberra last month.

Prepared by John Passant and John McLaren of the University of Canberra, the research closely examines a range of issues canvassed in Australia's Future Tax
System Review of 2010 (the 'Henry Review') that relate to Local Government.

The paper concludes that it would be unwise for Local Government to plan for anything more than minimal change. However, the release of the paper is timely as there will be opportunities for Local Government in light of the Federal Government's Tax Forum planned for October 2011.

ACELG Director Graham Sansom said as a response to the Henry review, the paper makes suggestions for future action to be undertaken by Local Government.

It highlights opportunities for the sector to influence the debate about the future shape of the Australian taxation and tax transfer system. Some of the key issues examined include:

  • the need for councils to have sufficient autonomy in setting rates
  • integration of rates and land tax
  • the distribution of financial assistance grants
  • the potential for expanded road user charges
  • the problem facing Australians in relation to housing affordability
  • the cost of providing aged care in a country with an ageing population
  • the longer term financial capacity of the states.

The paper states: "The drivers for reform, the vital role Local Government plays in our society, and the breadth of possible changes, all present opportunities for Local Government to raise longstanding issues about the adequacy and certainty of its revenue base in a new light, and to seek systemic rather than ad hoc improvements."

The paper is available on the ACELG website at