At burningpants we don’t usually comment about the Federal Government because we think that everyone else who does so is involved in an ideological spitting competition, where they make increasingly outrageous statements to back up their point of view.

But, unfortunately, the recent set of reforms and proposed reforms which form part of the pre-election sprint simply cannot pass without comment.

Let us be clear here, lest burningpants be accused of political bias – at the previous election, this correspondent welcomed the idea of a change of government, but frankly didn’t expect them to stuff it up so spectacularly.

It seems that the current government is the master of the good idea, which is poorly delivered.

The list of these is too long to mention in detail without exception, but let’s look at a few of the highlights:

First home buyers stimulus has resulted in house prices jumping (who would have thought of that as a consequence), which has increased inflationary pressure and forced the RBA to raise rates.

This is now affecting the hip pockets of all Australians in debt and leading to increased nervousness of mass affluent Australians as they start to wonder if the current direction of government is a great idea.

School Building Program: The rush to get it done appears to have been rorted by unscrupulous builders and used as a wedge to increase unionisation of the construction workforce, leading to a review of the process to see if this has actually occurred.

The Insulation Programme: Rorted by businesses and consumers alike and worst and most tragically of all dangerous; people died, were injured and lives exposed to horrible risks.

But my current favourite is the Henry Tax Reform and the way that it is being delivered.

Australia needs tax reform, in fact tax reform should be one of the great constants of government – the gathering and sharing of wealth is one of the things that makes democracies and in particular the Australian democracy great.

The Henry Tax  reform is an intelligent and balanced piece of work, but the idea of a tax on a single industry – in this case the mining industry – is flat out economic bananas.

What is really interesting to me is the idea that this is a tax on super profits – it’s not. It’s a way of funding a country by taxing an industry that is being run successfully and is generating large amounts of money for foreign corporations.

If we were really a country which taxed super profits then the first industry that would come under the spotlight is the financial services industry, which dollar for dollar invested is the most profitable in the country – especially through the last economic cycle.

What about the concept of a super profits tax on the building companies constructing school halls?

The whole idea of slipping this in and then using it as a way to explain the spending that you will be doing through the pre-election and budgetary cycle and as a way of covering up the blunders you have made is going to lead to some interesting and permanent problems:

The idea of taxing an industry will mean that the people who invest in that industry will downgrade their profit forecasts and then correspondingly lower the amount that they are prepared to pay for a share in businesses in that industry, leading to a fall in share price and increasing scrutiny on the future of the industry.

A new tax on an industry means that all the profit forecasts that the company has sent the stock exchange and shareholders are now incorrect and need to be re-done and hence all the five year plans that are in place have to be re-done and scaled down.

That means this Tax doesn’t have a short term effect it has a permanent and long term effect.

This forum is too short to cover all the issues that arise from taxation that works this way – but the point is you can’t fund a country and the reforms you are proposing from a single industry.

The approach also raises the spectre of what’s next? Especially, if this doesn’t go well.

Some of the biggest transfers of wealth on the horizon are: the unlocking of baby boomer property assets, which is estimated at $400 billion.

Is that on the radar and what does that mean? Death duties of some form?  That could hardly be fair – people paid tax on the money they earned to buy the property, should they be taxed twice?

There is about $64 billion in excess cash savings at the moment, which in the next year will start to flow back into the economy. Will that be taxed?

burningpants understands the idea of taxes and all the things that they pay for, but what is most concerning is when a government persistently delivers ideas which contain the phrase ‘and then all of a sudden a miracle happened…’