TIME TO BE BOLD

Business calls for tax reform

THE State Government must try to break the economic cycle of boom and bust by tackling overdue tax reforms — including considering a tourism levy and borrowing to fund infrastructure, a new report recommends.

The Tasmanian Chamber of Commerce and Industry Tasmania 2018 report, released today, shows the economy is firing on all cylinders and paints a bright future for the Apple Isle — but only if the Government capitalises on this period of growth.

Tasmania’s economy recorded its fastest growth in a decade during the 2017-18 financial year, and for the first time in nine years grew at a faster rate than the national average.

Tasmania’s improved economic performance saw the state’s population growth rise to its fastest pace in nine years.

The report’s author, Saul Eslake, said, while it was clear there was no appetite for major asset sales, the Government should consider major tax reform.

This should include broadening the base and lowering the rate of payroll tax and replacing stamp duties on land transfers with a more broadly based land tax, he said.

Mr Eslake also suggests some kind of levy on visitor accommodation to partially fund tourism marketing campaigns, or additional infrastructure used by tourists should not be dismissed.

“There may also be a case for the Government to consider undertaking a moderate level of net borrowing in order to fund higher levels of infrastructure investment in response to some of the pressures associated with more rapid economic and population growth,” the report says.

Tasmanian Chamber of Commerce and Industry chief executive Michael Bailey said taxation reform was an important conversation the state needed to have.

“To underpin a strong and healthy Tasmania we are going to need to find additional revenue streams,” he said.

Mr Bailey said to break the boom-bust economy the Government needed to think longterm about its infrastructure spending including investment in vocational education.

“Clearly it’s important we have higher education graduates but we need to make sure we are producing a lot more people for the vocational sector too,” he said.

“There are huge amounts of construction jobs predicted in Tasmania in the next couple of decades and we are struggling to find where we are going to get those workers from.”