Yes, that “five-year plan” line sounds a little Politburo-ish, but maybe there is a need for brave planning in government rather than political adhockery. While everyone was looking elsewhere, this is what the Treasurer has ruled: “Transaction taxes will be phased out over a period of 5 to 20 years. A number of nuisance taxes are removed. General Rates are adopted as a broad and efficient revenue replacement base, with improved progressivity.” No, I'm not dreaming, he's really done it. “General rates” sounds more acceptable than something scary like “broad-based land tax”, so I'll happily play along with the euphemism for the greater good. (You wouldn't want people to think you were taking the Henry taxation review seriously – apparently that's political suicide.) And 20 years is a very, very long time, but you can't expect too much in the present climate. It's early days in the reform process, but the government tries to explain it in bullet points thus: A Fairer System

Transaction taxes such as duty on conveyance are unfair

A small number of households contribute disproportionately to the funding of services

Around 9 per cent of the people raise 25 per cent of taxation revenue as a result of conveyance duty A Simpler System Businesses currently pay commercial land tax and general rates separately meaning higher administration costs and time lost Commercial land tax and general rates both

apply to the same property

reflect land used for commercial purposes A More Efficient System

Inefficient taxes distort behaviour. For example, households and businesses pay a tax on insurance premiums this may increase insurance costs

result in under insurance

create a disincentive to insure The budget implications are explained further on page 17 of this document and there's a neat graph that's worth a thousand words showing the appalling total compliance, administration and economic cost per dollar of revenue raised for some key taxes. The cost of the aforementioned for general rates is stuff-all, land tax is just a little more than that, but payroll tax allegedly chews up more than a third of each dollar raised, conveyance duty is nearly 40 cents in the dollar and general insurance is more. There have been revolutions over less inequity. Given the realities of politics and the need to neither disrupt or frighten the horses, the reform is indeed being phased in. It's taking five years to scrap the egregious duty on insurance, which is pathetic – something that bad needs to have been scrapped yesterday. The conveyancing duty takes much longer again as the land tax, oops, I mean “general rates” are increased.

It's not perfect, but it's a real start so well done Treasurer Andrew Barr. Who? Andrew Barr MLA, ACT Treasurer. Yes, it's that Canberra, not the other one. The smallest Australian government has become the only one to tackle the evils of real estate transfer stamp duty while the states are too busy whining and dreaming of the federal government solving their revenue problems for them. Dream on. It is a little easier for the ACT government, being a glorified local government that already levies rates and therefore not having to worry about another level of government. However, the principles required for the change are the same: a willingness to do what is best in the long term rather than what is politically easiest in the short-term. I had the pleasure of chairing the state taxes session of last year's taxation summit, of having all the nation's treasurers in the room at once, in front of an intelligent audience of tax professionals and community and business leaders, and belting them ever so gently over the head with their failings. They all knew they were imposing genuinely bad taxes, they all knew the thrust of Henry was right, they all knew they were failing their state/territory/nation. But they all sheepishly begged to be forgiven as captives of our divisive politics and short-termism.

The states all wanted the feds to take the political heat of tax reform for them: you raise it and we'll spend it, thanks very much. And the feds of course have enough problems of their own. Dream on and on. I didn't suspect that in the room was one government with some ticker for reform, some lead in the pencil, fire in the belly and concern for the greater, long-term good. Take a bow, ACT administration. Andrew Barr for Treasurer of the Year. Michael Pascoe is a BusinessDay contributing editor.