Ah, so that’s it. Our tax system is fine. It’s welfare that’s to blame.

I caught about 30 seconds of a smirking Treasurer holding the Hendy/Warburton report on tax reform on Lateline last night, but that was about it. The report’s already buried.

Earlier in the day Peter Costello suggested that business tax cuts were a good idea, but ruled out using next month’s Budget to give relief to low-income earners from high effective marginal tax rates. Why?

Well,rnour tax system is just hunky dory according to Cossie. It’s welfarernthat’s the problem. “Australia’s tax rates for lower income earners arernlow,” he said. “We also have quite a targeted welfare system and it’srnpeople adding the two together saying, ‘Oh well, these are very high,rneffective marginal tax rates’.”

Tax and welfare two separaternissues? Strictly speaking Cossie’s correct, but they’re both part ofrnincomes policy. Perhaps the Treasurer would claim that’s Kevin Andrews’rnarea.

The Treasurer also indicated the report was unlikely to bernmade public until later. Perhaps we might be able to get it under FOIrnin 30 years time. It might give us a laugh when we go through thernpapers and remember Peter Costello considered himself prime ministerialrnmaterial.