Big federation debate

Prime Minister Tony Abbott fired the starter's gun on Australia's big federation debate over the weekend, intrinsically linking it to tax reform.

He specifically suggested changing the indirect tax base to "permanently improve" the states' revenue position.

In the same breath he also flagged coupling this with income tax reductions. No mention of the need to abolish growth-harming transaction taxes though.

Showing how difficult tax (and federation) reform will be, Opposition Leader Bill Shorten immediately attacked any move to lift or broaden the GST.

Of course the property industry is already the most highly taxed part of the economy, contributing $34 billion in real estate specific taxes alone. The Property Council's own tax reform research is now well advanced and being reviewed by members.

It will be a marathon, not a sprint, but the tax reform race is now on.