While the States drag their feet on tax reform, the economy continues to suffer.
The Federal Government has given up the fight to get the States to abolish stamp duty on real estate business deals. This tax raises $800 million a year in NSW alone and $3 billion annually.
It results in a dead weight economic loss for the businesses paying the tax and the broader economy. It is also an example of how the States have been allowed to thumb their nose at the previous government’s insistence that such taxes be abolished in return for billions in GST revenue.
Once again the payment of such taxes is money that could be better spent on improving the productive capacity of private enterprise.
To its credit the Queensland Government has declared that it will freeze land tax valuations for 17 local government areas and have an amnesty on payroll tax penalties in relation to contractors.
However, if Premier Bligh was serious about tax and regulatory reform, then why not institute real reform by either abolishing pay roll tax altogether or cutting the rate and lobbying the other states to introduce a uniform rate across the country.
Perhaps Premier Bligh will do more. Her government faces an election this year and Agitate! will be watching closely to see what sort of stomach the Premier has for genuine reform as opposed to merely tinkering around the edges.