Consyl Publishing & Publicity Ltd

Consyl Publishing & Publicity Ltd

Home > Our Publications > Australian Outlook> 2007 > July

Tax reform major part of WA Budget

THE West Australian Government has rejected several ideas canvassed by some members of its independent State Tax Review Reference Group calling for a State income tax, increases to the GST and a labour services tax.
Treasurer Eric Ripper said the Government had emphatically ruled out the suggestions, which were included in the report from the reference group chaired by Jonathan Ilbery.
"While we disagree with these ideas, we broadly support many others in the report," he said.
Mr Ripper said the release of the State Tax Review and a response from its reference group brought to an end a process lasting more than four years which started with the Business Tax Review and resulted in major tax reforms in Western Australia.
The Treasurer congratulated the community for its participation in the review and thanked Mr Ilbery and the reference group on their efforts.
"Mr Ilbery and the reference group have performed a key role in examining these important issues and providing an independent report to the Government," he said.
"All up, there were more than 150 public submissions to the review and the process has been invaluable in helping the Government make decisions about tax reform."
Mr Ripper said the Government had shown it was clearly committed to tax reform and with the revision of the Stamp Act would have re-written every piece of Western Australia's tax legislation.
The Treasurer said the Government had implemented a number of the final report recommendations in the Budget, including increasing stamp duty exemption thresholds for first homebuyers and revising the land tax scale.
Other supported recommendations include a raft of changes to stamp duty on conveyances that will be addressed in the Stamp Act rewrite and the introduction of nationwide consistency in payroll tax.
Recommendations that would be further considered included some proposed changes to tax administration.
Mr Ripper said he also supported and would take to Cabinet recommendations for changes to land tax that would widen the definition of a disabled beneficiary.
The Government did not support some recommendations in the final report including the abolition of the Perth Parking Levy (PPL) and absorbing the Metropolitan Region Improvement Tax (MRIT) into the land tax scale.
"The PPL plays a role in discouraging motor vehicle use in the city and the Government has decided it should continue to fund the free CAT service for the public," the Treasurer said.
"While the MRIT will continue to be a separate tax, it was adjusted in the 2007-08 Budget so that it only applies to the value of land above a minimum threshold of $250,000, in the same manner as land tax.
"Substantial land tax relief in the 2007-08 Budget will also alleviate pressure for owners of non-income producing properties."
Mr Ripper said while tax reform was important, the Government also had an overriding responsibility to deliver key services such as health care, education and training and community safety to the people of Western Australia.
"Delivering these vital services and ensuring we build and maintain our infrastructure to keep the State's economy healthy are crucial," he said.

Tax reforms

the Business Tax Review package, which abolished a number of nuisance taxes and simplified the tax system through such measures as the introduction of a single marginal rate of payroll tax and reducing the number of land tax thresholds from 10 to six;
the most generous stamp duty exemption for first homebuyers in Australia, which was substantially increased in the 2007-08 Budget; and
the passage of the Taxation Administration Bill in 2003, which amalgamated and standardised the administrative provisions of four major tax Acts and saw all major taxing statutes, except the Stamp Act, being rewritten in clear and contemporary language.