SA “will participate” in GST debate: Koutsantonis
Treasurer Tom Koutsantonis has softened his bullish rhetoric on GST reform, today claiming South Australia would “participate” in any Commonwealth-led review.
Speaking ahead of a public seminar on potential state tax reforms, Koutsantonis notably toned down the stridency of his earlier rebuffs to any national reform process, such as in May last year when he said: “We won’t be increasing the GST, we’re drawing a line in the sand on this.”
He also said in December that Prime Minister Tony Abbott had “declared war on SA” for flagging a “sensible mature debate” on reform options; now, though he dismisses any questions on the subject on the grounds that “there’s no-one out there advocating for it in Government” and “the Prime Minister needs to lead the debate on national tax reform”.
“Part of that debate is GST, and we’ll obviously participate,” he said.
“We want to protect our citizens.”
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His newfound willingness to take a seat at the table might have been influenced by the fact he was flanked by noted economist Chris Richardson, whose consultancy Access Economics (now Deloitte Access Economics) authored John Hewson’s ill-fated Fightback plan, the centrepreice of which was a consumption tax to be levied at 15 per cent.
“I’m long on the record saying Australia can do better around GST, around what it taxes within GST,” Richardson affirmed.
“We’ve left out some things … health is a great example. Taxpayers pay 70 cents in the dollar of health care costs anyway.
“My view is we should widen the base, raise the rate and compensate properly.”
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The Treasurer did acknowledge that “Chris and I disagree on that … I think it’s a regressive tax”.
But both men were more keen to restate reform options for state-based taxes, with Richardson telling the audience of predominantly industry association members “no other state in Australia has this option on the table”.
“There’s a better South Australia potentially on offer at the end of this,” he said.
“If we can get enough agreement, if you can do some of the sensible things, you genuinely can make a difference.”
In contrast to his historic intransigence on any whiff of GST reform, Koutsantonis emphasised that “all (state) taxes are on the agenda” as he seeks to lead “a better informed debate amongst the public”.
Richardson broadly echoed the major tenets of the Government’s reform paper released last month, emphasising the inefficiency of conveyance taxes, “particularly when they are levied on businesses” and stating that insurance taxes are “consistently found to be the least efficient of all”.
He posited replacing them with a mix of more efficient payroll and property taxes.
Richardson couched the debate as in pursuit of “prosperity and fairness, or efficiency and equity, in economic jargon”, which perhaps makes it a harder sell for Labor after Jay Weatherill’s recent insistence that “it’s not possible to make (the tax system) more equitable without somebody losing”.
Submissions on reform options close next month.
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