Australia likely to review taxation

Updated April 22, 2008 07:59:09

Prime Minister Rudd says the Australian taxation system requires comprehensive reform. [AAP]

The Australian government has hinted it will take up one of the suggestions from last weekend's 2020 Summit and embark on a major review of the national taxation system.

Prime Minister Kevin Rudd promised to respond to summit ideas by the end of the year, but on Monday he discussed the merits of simplifying taxation as a priority.

"I actually think we are getting to that time where we need to have a top down look," he said.

Mr Rudd says there is a need for comprehensive reform and has criticised the previous government of John Howard for not acting ont he issue.

"For the 11 years or 12 years that the Howard government was in office, the opportunity for a top down review of the entire taxation system was there," he said.

While he has spoken in favour of adopting the Summit suggestion, Mr Rudd says no immediate changes will be made to the taxation system for at least two years.

Nevertheless the Prime Minister's comments have been welcomed by leading Australian economist Chris Richardson, of Access Economics.

"There are a bunch of state taxes which are just out and out evil; they almost destroy as much value in the economy as they raise in terms of revenue," he told the ABC.

"We can do better than that."