Chartered Accountants Australia and New Zealand (CA ANZ) has welcomed the NSW Review of Federal Financial Relations report as a way to put Australia on the road to recovery, said Michael Croker, CA ANZ Australian Tax Leader.
“We strongly support the recommendation to lift the GST rate and expand its base over the medium to longer term,” said Croker.
“GST reform will deliver much needed funds into an economy which lacks a sustainable, efficient tax base.
“Australia’s GST rate remains one of the lowest in the world and its coverage (tax base) also ranks poorly.
“The recommendation to replace stamp duty on property with a broad-based land tax, could also produce a big economic payoff in the longer term.
“What bedevils tax reform in this country is the lack of appetite for bold reforms, both at political and community level.”
Mr Croker congratulated NSW Treasurer Dominic Perrottet and his expert panel for showing leadership on this important issue.
“The NSW report now needs back-up from other State and Territory leaders to spur on their Federal counterparts,” said Croker.
“The October Federal Budget is expected to reveal the savage impact COVID-19 has had on all tax collections, which is bad news for the Government-provided services we all rely on.
“Those urging continued Government support also need to start thinking about how its paid for.”
At State and Territory level the report also highlights the important role each jurisdiction plays in delivering important community services and The ACT experience with phasing out stamp duty and switching to land taxation also provides valuable learnings.
“For example, the NSW Report flags a ‘voluntarily opt in’ approach to land tax, or pay the upfront stamp duty,” said Croker.
“Discussions around an appropriate transition process that recognises the impact on property owners needs to be undertaken before any model is implemented.
“Ultimately, these tough economic times call for a Team Australia response on lots of fronts, including tax reform.
“We need to start talking holistically and joining the dots on how taxes underpin our society.
“The pandemic has shown us how Australians and especially our health and social safety net system can rise in the face of incredible challenges. Even more challenges lay ahead.”