Federal Treasury Secretary Ken Henry has kept up his attack on state taxes on insurance, labelling the taxes as some of the most inefficient in Australia.

Speaking to the Committee of Economic Development of Australia (CEDA) in Tasmania about last year’s review of the tax system, he says the country faces many challenges in the future to get tax right.

Dr Henry says tax reform should not be left to the Commonwealth alone, but should be a combined effort between all state and territories as well.

“We found that narrow-based taxes on insurance products, motor vehicles and real estate transfers are among the most inefficient in Australia,” he said.

“And in the case of stamp duty on insurance products, modelling undertaken for the review estimated a marginal welfare loss of around 67 cents in the dollar.”

Dr Henry says although he understands those who have been raising these issues for some time are impatient for change, the right process needs to be followed.

“Changes won’t come without the case for reform first being accepted by the community,” he said.

“That means going beyond the concerns of those who may be disadvantaged by the reform and finding compelling ways to explain the benefits to the well-being of all Australians.”

Dr Henry says the good news is that the process for change is now getting under way.

“It’s encouraging to see a number of governments building the case for imaginative tax reforms,” he said.