The Australian and New Zealand governments have intermittently established tax review committees to undertake targeted or broad reviews of their respective tax systems. Typically, such reviews have minimal impact in the short term. However, with the passage of time associated usually with changes in governments, some of their recommendations for reform are advanced and lead to legislative reform.
In this policy comment, the focus is on two significant review committees, namely the Taxation Review Committee (Asprey Committee) in Australia and the Task Force on Tax Reform (McCaw Committee) in New Zealand. The Asprey Committee delivered its Full Report in 1975 and it is one of the most comprehensive reviews of Australia’s Commonwealth tax system, although the uptake on its recommendations have been limited and slow. The other comprehensive Australian tax system review is Henry et al.’s, Australia’s Future Tax System: Report to the Treasurer: Final Report (2010). The Asprey Committee’s work informed a similarly focussed review in New Zealand, with the Task Force on Tax Reform’s Report released in 1982 (the McCaw Committee).
This policy comment draws on an earlier, more extensive analysis in a special issue of the Journal of Australian Taxation commemorating the fiftieth anniversary of the Asprey Committee’s report.
The Legacy of the Asprey Committee
The Asprey Committee set out a vision that involved substantial tax reform incorporating significant changes to the tax mix and a broadening of the tax base (including proposing a capital gains tax, fringe benefits tax and lower marginal tax rates). In many ways, this can be seen in the New Zealand model developed in the mid-1980s (post the McCaw Committee), namely the Broad Base Low Rate (BBLR) model, that continues to form the (conceptual) basis underlying New Zealand’s tax system. Both jurisdictions also have in place tax policy development mechanisms that involve the respective countries’ Treasury and revenue authority, commencing well after the Asprey Committee and McCaw Committee provided their reports.
Political Constraints and the Limits of Tax Reform
Tax reviews undertaken in both countries, both before and after the Asprey Committee and the McCaw Committee, show clearly that politicians usually avoid proposing dramatic tax changes. This is especially the case where the tax change could lead to perceived adverse political assessments and a loss of power at the next general election, even when the tax changes are extensively researched and supported by data (for further analysis of Australia’s experiences, see Paul Tilley’s Mixed Fortunes: A History of Tax Reform in Australia and for New Zealand’s experience, see Adrian Sawyer’s The Effectiveness of tax reviews in New Zealand: An Evaluation and Proposal for Reform).
What is also clear is that unless there is the presence of a political champion willing to socialise the changes with the wider public, then any major reform initiatives will gather metaphorical dust. Reforms ensue only when a bold political champion is willing to pursue them, supported usually by economic challenges necessitating a review of tax policy settings.
As of late 2025, the Asprey Committee’s review has been Australia’s most ‘successful’ review for providing the basis for significant tax reform. While minor changes were accepted relatively quickly, the major reform ideas took much longer. In New Zealand, the McCaw Committee was more timid and more rushed in its analysis, a fact that was largely outside of its control (or at least it did not seek to be granted more time). After completing their reviews, each of these committees was disbanded, and much of the impetus they created was lost. That said, their establishment was not a complete waste of time and resources, as both reviews had some success in terms of the uptake of their recommendations, but not for many years later.
Are Ad Hoc Tax Reviews Worth It?
From a cost-benefit perspective, it is easy to conclude that the immediate benefits of these ad hoc tax reviews have been small, and those benefits that were significant took considerable time to eventuate. These benefits are in the context of relatively high upfront costs in terms of time and resources expended. Applying a discount rate to the benefits would reduce them further, at least in terms of the potential fiscal impact they may have had.
Nevertheless, each report has encouraged wider debate and served as a reference source for later tax reform in both countries, through instigating significant changes to the tax mix and extensions to the tax bases. But such ad hoc and infrequent efforts at tax reform, are inefficient, largely ineffective, and on each occasion, effectively start at ‘square one’ as each review is established. There is no scope for ongoing review, remedial work, or further developing ideas. Consultation is also often very limited in scope, or where it is more extensive, many groups in society are not heard.
The analysis in the underlying study embraces and benefits from having hindsight and reflecting upon subsequent events. While the author’s experience is significantly influenced by the New Zealand approach to tax reviews, these often bear a sizeable resemblance to that in Australia (and vice versa). However, New Zealand’s McCaw Committee’s work is a pale shadow to that of the Asprey Committee, even though it had the benefit of the Australian experience.
Rethinking the Ad Hoc Review Model
History in Australia and New Zealand shows that opportunities for undertaking major tax review tend to come around every 12-15 years, and with minimal tangible effect, the model of ad hoc reviews must be seriously questioned from both efficiency and effectiveness perspectives. Furthermore, the underlying study highlights a major challenge (and essentially a flaw) with commissioning ad hoc tax reviews such that their recommendations often do not align politically with the government of the time, further reducing their impact.
This suggests there may need to be a different approach, such as through a semi-independent, potentially statutory body such as a Commonwealth or Crown entity, or its equivalent. Such a body would have the benefit of keeping major tax reform matters in front of politicians and the wider public. Such a body is, unfortunately, unlikely to see the light of day in the foreseeable future in either Australia or New Zealand.
That said, the Board of Taxation in Australia is a step forward but is not the panacea that is needed. A less imposing approach would be to instigate a formal review by an established semi-independent body such as the Australian Law Reform Commission or the New Zealand Law Commission.
The underlying study contributes to a growing literature seeking to promote and develop a blueprint for an independent tax review body as a (non)statutory permanent mechanism to improve tax policy development, enhance consultation and transparency, and potentially lead to faster adoption of recommendations.
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