The challenges of climate change, globalisation and Australia's ageing population will be central to a review of the tax system, Federal Treasurer Wayne Swan says.
Releasing a 343-page discussion paper on Australia's future tax system, Mr Swan said the review aimed to make Australia's tax system simpler, more internationally competitive and better reward hard work.
He said it was the most comprehensive review of taxation in more than 50 years.
"It will not be my task in this process as we go through it to be ruling things in and to be ruling things out, what we do want is a full frank and mature conversation with the Australian people because we are serious about the long-term modernisation of our tax and transfer payments system," he said in Melbourne.
The discussion paper by Treasury secretary Dr Ken Henry sets the framework for the tax review, which will be completed by the end of next year.
The review will include federal and state taxes and the transfer system but excludes the rate and base of the GST.
There are 125 taxes in Australia - 99 federal, 25 state, and one at local government level.
Mr Swan refused to say whether any would be scrapped.
"The aim of the review is to make the system simpler and more efficient. I'm not buying in or out about less or more," he said.
The review will cover taxes on work, investment, property, savings and consumption and their impact on individuals, families and retirees.
It will also consider the relationship between taxes and an emissions trading scheme.
"So much has changed in Australia since the war; globalisation, the rise of new information technologies, population ageing, climate change - all of these challenges demand a comprehensive review of our tax system," Mr Swan said.
"We do need a modern tax system for the 21st Century."
