South Australian Premier Jay Weatherill has proposed the Federal Government expand the GST to consist of economic services in return for state governments abolishing so-called “nuisance taxes” such as stamp duty on insurance.
Mr Weatherill will today use a speech to the American Chamber of Commerce in Adelaide to unveil a tax reform package that he hopes will break an impasse about the GST debate.
“Treasurer Scott Morrison has not too long ago named on state governments to get rid of ‘nuisance taxes’ such as stamp duty on insurance, with the notion getting this could be accomplished as element of the negotiation to raise the GST,” Mr Weatherill said.
“The difficulty for the states is that over the period 2004-05 to 2013-14, total insurance coverage duty collections by the states, excluding fire service levies, grew by an annual average growth price of 6.7 per cent, which is above the typical annual growth in the GST pool over the very same period of about four.3 per cent.
“If the states had been to money in the stamp duty for an increase in the GST price, more than time the compensation would be eroded.”
Mr Weatherill has previously proposed broadening the base of the GST to consist of economic solutions.
“It is possible to do this by implementing a supplementary tax that is applied to the margins earned on lending and foreign exchange activities,” he said.
Mr Weatherill mentioned the exclusion of the financial sector was pointed out by both the Henry tax review and the Murray financial technique inquiry.
“This is not simply because of social policy or equity issues. Such concerns are relevant for meals and well being, but not for banking services,” he stated.
Mr Weatherill pointed to Treasury estimates that showed a potential $ four billion revenue obtain from the complete taxation of household consumption of economic services.
“This would make a substantial contribution towards the $ 4.9 billion that the states collected in stamp duty from insurance coverage in 2013-14,” he stated.
Topics: federal—state-concerns, government-and-politics, states-and-territories, tax, sa, adelaide-5000