Remember the happy debate about whether we should build up a sovereign wealth fund? Forget it - we just won't have the brass. It means we'll be struggling to keep up with the growth in existing spending programs - particularly health - with little scope to pay for the disability insurance scheme, the Gonski report's proposals for education, aged-care spending and any other improvements we'd like to see, without dropping some big programs or introducing new taxes. And as Henry reminded us this week, if the population keeps growing at the rate we expect, we'll need to spend a lot expanding the public infrastructure to accommodate them. Only some of that can be borrowed. So what exactly is the problem with the tax base? Why has it never been the same since the global financial crisis? The biggest problem is with company tax collections. For many years they averaged about 3 per cent of GDP, but in the long boom that preceded the crisis, they grew to an unprecedented 5.3 per cent. Last year they were 4 per cent.

Much of the trouble is the collapse of receipts from capital gains tax. The long boom of rising share and property prices resulted in many individuals, companies and pension funds building up capital gains, which became realised and taxable when the assets were sold. Capital gain tax receipts got to as much as about 1.5 per cent of GDP, most of which was paid by companies. The financial crisis saw big falls in the sharemarket, wiping out unrealised gains and, in other cases, creating realised and unrealised losses. Share prices on the Australian stock exchange haven't yet recovered to their peak before the crisis, and it's hard to see another boom starting any time soon. Property prices are less relevant - capital gains on owner-occupied homes aren't subject to tax - but they haven't been going anywhere either. At present, gains tax is raising only about 0.5 per cent of GDP. The second big change in company tax revenue since the crisis concerns the mining companies. The first phase of the resources boom before the crisis saw the prices for coal and iron ore shoot up and the miners' profits with them. Pretty much 30 per cent of that increase would have been taxable. The second phase following the crisis saw prices go even higher, but by then many of the miners had embarked on major expansion plans, so that the depreciation charges on their capital spending significantly reduced their taxable profits.

So the mining investment boom adds to GDP on one hand, but directly subtracts from company tax collections on the other. Yet another subtraction from company tax collections is the high dollar, which reduces the Aussie-dollar value of export earnings. The problem with personal income tax collections arises from the eight tax cuts in a row announced by Peter Costello (with Labor delivering the last three). When you cut taxes that often, you do a lot more than give back the proceeds of bracket creep (known to economists as ''fiscal drag''). So the real level of income tax was reduced. The second-top rate of tax was greatly reduced and the width of the tax brackets was widened, with the threshold for the top rate raised from $60,000 to $180,000 a year, thereby greatly reducing the tax scale's capacity to generate bracket creep. What this means is that, with company tax collections then riding so high, the Howard government thought it could bring about lasting change in the tax mix, making the budget more reliant on revenue from companies and less from individuals. Then company tax revenue collapsed. Yet another tax with big problems is the goods and services tax. With households' decade-long spending spree a thing of the past, consumption spending is now growing no faster than household incomes. But not all consumer spending is subject to the GST, and some of the categories that aren't - particularly private spending on education and health - are growing a lot faster than the categories that are, meaning GST collections are growing more slowly than consumption.

You may think this a problem for the premiers rather than the feds, but state budgets are so heavily dependent on the GST that what's a problem for the premiers becomes a problem for the prime minister. That's not the states' only revenue problem. They're locked in a destructive competition to raise the threshold at which payroll tax becomes payable. And the weakness of the residential property market - including the lower number of sales - has hit another key state tax, conveyancing duty. Although some of these many problems with the tax base may go away in time, it's hard to see that time occurring in the next five to 10 years. And by then the problems for the taxman created by globalisation and the greater mobility of capital and highly skilled labour (which I wrote about last Saturday) may be starting to bite. To many people - particularly business people - the words ''tax reform'' make them think of paying less tax. One day soon it will dawn on them that the reform we must bring about is new and higher taxes. Twitter: @1RossGittins