Monday 20 July 2015
NSW STEPS UP ON TAX REFORM
The NSW Government is right to highlight the structural weakness in Australia’s tax system to meet the
services needs of Australian society going forward.
CPA Australia chief executive Alex Malley says the rate and base of the goods and services tax as part
of broader tax reform is a debate the nation must have.
“The mere mention of GST is usually enough to send politicians scurrying for cover -- thankfully it’s not
the case with the NSW Government”, Mr Malley said.
“Premier Mike Baird is rising above the fear and misinformation that typically characterises any debate
about changing the GST and that’s to his great credit.
“It’s acknowledgment that if we are serious about modernising, simplifying and improving the efficiency
of our tax system then the GST must be on the table.
“CPA Australia has comprehensively researched the model put forward by Premier Baird, which is to lift
the GST rate to 15 per cent and retain all current exemptions.
“Our modelling shows that in the first year alone, there’ll be an additional $26 billion of GST
revenue. Over four years, that equates to an extra $110 billion.
“The revenue generated can be used to abolish a number of inefficient state taxes, such as insurance
taxes, motor vehicle stamp duty and conveyancing duty.
“This, and the other three scenarios we have modelled, shows that there is also sufficient revenue to
return to households as income tax cuts or as compensation for low income households.
“Under Premier Baird’s model, that would equate to $4.7 billion in the first year, or $21 billion over four
years for compensation.
“The net outcome in all of the scenario’s we modelled is that households across the income spectrum
can be better off.
“Taken as a package, the evidence is that these sorts of reforms can deliver tax cuts, improve household
incomes and boost economic growth.
CPA Australia’s GST Research can be found here: http://www.cpaaustralia.com.au/documents/taxreform-in-australia.pdf
“We know that comprehensive tax reform can be difficult, but we also know it has the potential to be
transformative.
“While there is no perfect model, we won’t get anywhere if we don’t have a commitment to building the
case for reform and ensuring the community has an understanding of the key reasons for reform.
“We’re already about six months behind the Government’s deadline for the tax white paper
process. Business and the community stand ready to drive change. Premier Baird’s public call for
reform should be the line in the sand so we can all get on with the job.
“I am confident that as a community we can come together to frame a tax system that’s simpler,
enhances the competitiveness of our businesses, rewards innovation, lifts flagging revenues and builds
resilience against future shocks — while maintaining a core of equity and fairness,” Mr Malley said.
-ENDS
Contact: Bryce Prosser on 0416 968 444 or [email protected]