News & Discussion: South Australian Economy

[Will]

Not bad for a place that is ''crumbling''

[iTouch]

Not a bad opinion for "a state thats ruled by dictators" as the Advertiser constantly enforces

[Waewick]

holy crap a postive article

still resources aren't there because of either political party - we just have to make sure they work hard to make the state benefit.

[Shahkar]

Business groups lobby for South Australian tax shake-up


THREE peak business groups have called for a dramatic cut in state taxes to kick-start the economy and a GST increase to cover lost government revenue.

Such a bold move would make cars and houses cheaper, but increase the cost of some consumer products and services such as groceries, petrol, clothes, electrical goods and home renovations.

State Parliament's Economic and Finance Committee is about to begin a long-awaited inquiry into South Australia's tax regime.

In separate submissions obtained by The Advertiser, BusinessSA, the Motor Trade Association and Property Council of Australia all warn that outdated state taxes are stalling economic growth.

They call for reductions or abolishment of taxes such as stamp duty, land taxes, payroll tax and the city car parking tax.

As SA battles a record $14 billion debt and rising unemployment, the three groups warn SA has become over-reliant on taxes that deter investment and job creation.

BusinessSA chief executive Nigel McBride said the state urgently needed to become more competitive and should move towards abolition of state taxes offset by a rise in the GST to as high as 15 per cent.

The GST is charged at a rate of 10 per cent on most consumer products and handed to the Federal Government to divide among the states, based on population and need.

Economists say it is one of the cheapest taxes to collect and has low negative impact on growth.

"Without a reform of the national tax base, states can only tinker around the edges," Mr McBride said.

"The problem with our tax base is it has got inefficient taxes and they're taxes that don't provide consistent revenue. They're very volatile.

"We understand tax has to be collected, but it should be in a way that doesn't inhibit proper business decision-making and growth."

Motor Trade Association chief executive John Chapman said SA's finances were under pressure from the State Government's inability control spending and called for debate on a 12.5 per cent GST rate.

"We are the highest taxing state on business, rather than a state which is attracting more businesses to add more revenue," he said.

Property Council of Australia SA executive director Nathan Paine said GST changes could be investigated to fund state tax relief but the State Government should move on its own if Canberra delayed.

"If we're going to look across the country to reduce reliance on volatile and inefficient taxes, then we have to look at solutions for improving the current broad-based taxes," he said. "The State Government still needs to resolve the current situation, not just put it off."

The call from business is broadly in line with recommendations of the 2010 Henry Tax Review and will challenge both major parties as they form policies for the state election in 13 months.

Mr Weatherill would not comment yesterday on possible GST changes.

"This Government has a strong record of providing tax relief when Budget circumstances allow," he said.

"Government will consider the submissions. Taxes pay for the services that help people in the community so any discussion of tax relief must include alternative revenue measures."

Mr Weatherill said the Government had delivered tax cuts annually worth $500 million in the past decade.

Opposition treasury spokesman Iain Evans said the inquiry would raise important reform questions.

"Different taxes affect different industry groups in a different way," he said. "Being able to have Treasury officials there to explain why they haven't done certain things ... will be of benefit."

The Federal Government has little appetite to change the GST rate. Federal Finance Minister Penny Wong has said it would disproportionately harm the poor.

[Aidan]

Struth, what a pathetic bunch of disingenuous whingers! There are real problems with our state's taxes (specifically the high rate of stamp duty, the way payroll tax kicks in suddenly, and the scope of land tax extending to residential property but not owner occupied housing) but rather than finding constructive ways to address these problems, these organizations are just suggesting shifting the tax burden off their members and onto everyone else, giving little or no thought to thte wider economic effects of doing so.

At a time when competition from overseas is starting to make the negative effects of the GST more apparent, it would be grossly irresponsible to increase it. Serious thought should be given to abolishing it instead.

[monotonehell]

The title sets the tone doesn't it?
"WHERE PREMIER JAY WEATHERILL GETS HIS MONEY"
It's not "HIS" money.

These guys always push for a user pays system, except when it's their users.

[peas_and_corn]

The orange wedge is unlabeled. That bugs me.