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A Fair and Sustainable Tax Base

 

 

A fair, simple and sustainable tax system is necessary to provide the essential public services and infrastructure that enables us to live, learn, age and work safely. Taxes pay for hospitals, schools, roads and a range of vital community and business services that allow our country to prosper.

While tax revenue underpins the government’s ability to operate in all areas, it is especially important for vulnerable and disadvantaged people who rely on community services and support.

Australia is not a high-taxing country by world standards (as a percentage of the economy, we the fourth lowest taxing in the OECD), but the tax system is dominated by federal government taxes. The state tax base is small and falling alarmingly - creating structural budget problems for government and bringing into question the sustainability of a range of government spending and programs.

State Government Revenue as a % of the GSPIn 2006-07, South Australian tax receipts plus our share of GST was 9.6% of the state economy, by 2011-12 this was down to 8.8%. This is the backdrop to the constant response of governments of all persuasions that they don’t have the money for the services that SACOSS and others seek to assist vulnerable and disadvantaged people.

In addition, state taxes based on a narrow range of often unstable, inefficient or unfair taxes. For instance, land taxes get passed on to poor renters, home sales stamp duties are unstable and not based on ability to pay, and payroll tax is economically inefficient and does nothing to secure work for South Australians.

We need to rethink the tax system, but most immediately given the fall in revenue and the constant cutting or inability to fund vital services, SACOSS seeks a commitment from all parties to maintaining and building a sustainable revenue base for the state government, and specifically a commitment to restoring state government revenue to pre-GFC levels (as a % of Gross State Product) in the next term of government.

The 2013-14 SA State Budget forward estimates project state revenue to increase over coming years and return to pre-GFC levels in 2015-16, but these projections are subject to review (the last 4 economic statements have revised the revenue estimates down). It is imperative that the government commits to a revenue goal so that if revenue estimates are adjusted down, vital services will not be cut further.

Downloads

Reports: 

SACOSS, Taxes and the South Australian Election, South Australian Council of Social Service, Adelaide.

"Without Taxes, Vital Services Disappear" Video Advert above in downloadable Windows Media File- (3.5MB)

"Without Taxes, Vital Services Disappear" Brochure

"Without Taxes, Vital Service Disappear" Postcard

Background Paper: Ian McAuley, "Taxes are the Price We Pay for Civilisation", Information for the SACOSS AGM, November 2013.

Interview with Richard Denniss, Executive Director of The Australia Institute, on Radio Adelaide's Small Change program on 4 February, 2014.

Interview with Ian McAuley, broadcast on Radio Adelaide's Small Change program on 19 November, 2013.

Ross Womersley, "Promises Shouldn't Affect Vital Services", published in The Advertiser, 31 October 2013.

SACOSS Submission to the SA Parliament's Economic and Finance Committee Taxation Review, January 2013.

Greg's Grumble about taxes, broadcast on Radio Adelaide's Small Change program on 6 August 2013.

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