Com­mis­sion backs GST change in WA

Pilbara News - - News - Shane Wright

The na­tion’s big­gest busi­nesses have thrown their sup­port be­hind an over­haul of the GST, say­ing the sys­tem is hold­ing back the na­tional econ­omy and hurt­ing States such as WA.

The Busi­ness Coun­cil of Aus­tralia has backed key pro­pos­als from the WA busi­ness com­mu­nity, the State Gov­ern­ment and the Op­po­si­tion to change the GST, but has gone fur­ther with ideas it ar­gues will de­liver ma­jor ben­e­fits to the econ­omy.

Coun­cil chief ex­ec­u­tive Jennifer Wes­ta­cott said that for too long, gov­ern­ments had used the dif­fi­culty of chang­ing the GST al­lo­ca­tion as an ex­cuse to put off much-needed changes.

“There is now an ur­gent need to change the hugely com­plex GST dis­tri­bu­tion for­mula,” she told The West Aus­tralian.

“It’s not fit for a more dy­namic econ­omy, it’s not pro­vid­ing the in­cen­tive for State-based re­form and it’s be­come a real ob­sta­cle to broader tax re­form.”

In its sub­mis­sion to the Pro­duc­tiv­ity Com­mis­sion’s in­quiry into the GST, the BCA broke from many or­gan­i­sa­tions by back­ing a change that would en­able the Com­mon­wealth Grants Com­mis­sion to take into ac­count the eco­nomic con­di­tions fac­ing a State or Ter­ri­tory.

Cur­rently, the com­mis­sion fo­cuses solely on rev­enue flows and the costs of ser­vices of a gov­ern­ment, with the strength of the lo­cal econ­omy ig­nored.

The BCA be­lieves the trea­surer of the day should di­rect the com­mis­sion to look at a State’s abil­ity to man­age “eco­nomic shocks”, in a move that would have helped WA over the past three years.

It sup­ports end­ing the prac­tice of money be­ing shifted be­tween the States be­cause of the plight of indige­nous com­mu­ni­ties.

This year, more than $1.7 bil­lion will be shifted, of which more than one-third will go to the North­ern Ter­ri­tory and $187 mil­lion to WA.

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