One is that the way Australians are taxed is an issue which should be constantly under scrutiny.

Economic circumstances change constantly these days in the way they affect industry, business, the family unit and individuals.

This has been brought about most significantly in recent years by the opening of the Australian economy to international market forces, most significantly by the floating of the Aussie dollar.

The way the international oil price has impacted on the capacity of Australians to run their families and businesses is another example of how circumstances can change.

Government should constantly monitor the way Australians are affected by these and other regular economic adjustments with which they have to cope.

It is reasonable to assume it is.

While there may be no direct connection between taxation rates and these external economic impacts, it is incumbent on government to also monitor the effectiveness of the taxation system in the context of current economic

conditions.

At the state level in Victoria, for instance, there are indications that small to medium business is frustrated by the issue of land tax, making it one of the least optimistic business sectors in the nation.

A second reason the debate is positive is that it has introduced specific discussion of the impact of tax rates to regional Australians.

Constitutionally, there may be no way that one region can have lower tax rates than another, outside of some specific circumstances which are already being catered for.

But the fact that there is a debate about the fact that there may be Australians in regional areas doing it tougher than some of their high flying city counterparts, and who may need some form of special attention, will do no

harm.

The discussion at present is focussed on individual tax rates.

Should rate reductions, if they are possible, be delivered at the highest marginal rate, the lower rates, or across all scales.

Ultimately, the tax scales should be fair, but Treasurer Costello is right to caution that they should be considered in a climate of ensuring minimum pressure on interest rates and continuing provision of appropriate health and

other fundamental services.

It is a complex debate, but a healthy and necessary one.