South Australia’s peak retail automotive industry group, the Motor Trade Association, has called for a series of changes to the state’s financial system in order to encourage business growth.
In its submission to State Parliament’s Economic and Finance Committee’s Inquiry into state taxation, the MTA has highlighted that there is no revenue crisis in the current system, but an expenditure crisis which must be addressed by the Inquiry.
MTA chief executive officer, John Chapman, says that the Government should be able to offset proposed tax relief to South Australian businesses by implementing and then meeting budget saving targets.
“All too often we have seen saving targets not met which immediately puts pressure on the State’s budget,” says Chapman.
“We are the highest taxing state on business, rather than being a state which is attracting more businesses to add more revenue.
“And the best way to attract more businesses to South Australia, is by making our tax system more competitive with the other states.
“It is good for the economy and will be good for the state budget with an overall increase in revenue long-term,” he says.
The MTA recognises that it’s futile to consider the State’s tax system in isolation of other systems which are inherently connected to that system.
“We believe that the Inquiry should also consider what the impact would be if the Commonwealth Goods and Services Tax was increased to 12.5% or by removing the exemption on food, health and education,” says Chapman.
“The GST has now been in place for well over a decade and it is timely that it is considered for a review. South Australia could take the lead in the national debate on the issue.
“Intentionally, the Australian GST is relatively low and if increased it would allow for state governments to reform, reduce or abolish inefficient and outdated state taxes.
“However, this is not the only option for the Committee to consider in the Inquiry and they should look at ensuring a competitive business tax system as a priority,” he says.
The MTA has made a total of 13 recommendations to the Economic and Finance Committee in its submission for consideration in their inquiry.
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