A full review of state-federal relations is urgently needed to address major inefficiencies in the tax system, according to a tax advisory panel established by the NSW Liberal/Nationals.

“It is nonsensical that 80% of tax revenue goes to the Commonwealth while only 16% is collected by the State Government considering the State is responsible for 40% of outlays,” said Shadow Treasurer, Greg Pearce.

“This inefficient system means we have $20 billion sitting in a federal surplus while infrastructure and services in NSW are crumbling,” said Shadow Minister for Finance, Mike Baird.

Meeting last week for the first time, the NSW Coalition’s tax advisory panel found businesses are burdened by the need to comply with the multiple levels of taxation.

“There are 56 separate taxes that apply to businesses in this country – more than double the number than the UK, which has an economy three times the size of ours,” said Mr Baird.

“Businesses operating across States are bearing additional costs because of inconsistent tax rates and methods of collection. The speed of harmonisation must be a key priority,” said Mr Pearce.

The panel discussed the need for budget reporting and communication to be transparent.

“We have a situation where the Iemma Government can change the accounting methodology and reporting standards it uses at its whim,” Mr Pearce said.

“There is an expectation that payroll tax will be cut – NSW has lagged for too long behind its key competitors of Victoria and Queensland. However, we are fearful that any changes will only be small and will just tinker around the edges,” said Mr Pearce.

“The fiscal gap in NSW must be addressed. Revenue is growing by 3-4% while expenses, such as health, are rising by 10%. It is impossible to deal with these inefficiencies without a comprehensive review of federal-state relations,” Mr Baird said.

The NSW Coalition’s tax advisory panel comprises representatives from Deloittes, KPMG, Ernst & Young, the National Council Of Social Services, the National Farmers Federation, the Insurance Council of Australia, the Property Council of Australia, Australian Business Limited, and the Joint Accounting Profession Panel.

Write Comment

Please keep the topic of messages relevant to the subject of the article. Personal verbal attacks will be deleted. Please don't use comments to plug your web site. Such material will be removed.
Name:
E-mail
Subject:
Comment:
Code:*

Be first to comment on this article