The State Government is between a rock and a hard place with this week’s Budget, according to a SACOSS report released today. The South Australian Council of Social Service has warned that the public is yet to come to grips with the revenue problems facing our state.
According to our survey:
- 62% of respondents opposed increasing taxes to meet budget pressures. The numbers supporting tax increases doubled (to 31%) when it was proposed to increase tax only on business, but more people were opposed to business tax increases than supported it.
- Only 23% of people supported cutting spending on services, and 48% opposed such cuts;
- Going further into debt had almost no public support (11%).
SACOSS CEO Ross Womersley said, “The survey was pretty clear that people still want more services and lower taxes, but that just does not add up and with almost none of the obvious budget approaches having wide support, we are not really in a position to have a serious debate about the appropriate level of public infrastructure and services and how to fund that.”
The SACOSS report, based on a survey of 1,000 South Australians, also shows low levels of knowledge on the key state taxes.
And over half (54%) of respondents believed SA’s level of taxation was higher than other states and territories – but by most measures this is simply untrue.
The majority view (64%) that the overall level of state taxes was too high was moderated (to 52%) when people were asked to consider the services provided, but with the exception of funding health services there was limited willingness to pay more tax to fund services.
The survey showed a number of attempts to dodge those key budget questions – by assuming that cutting waste will fix the problem or that we should tax someone else more (eg. business) – but the rationale and imagined scale of waste is not supportable, and when business taxes have economic costs and can be passed back on to the community this is not the solution it is supposed to be.
The solution:
According to Ross Womersley, “We either go down the American path of low taxes and abysmal public services, or we accept that we need to find the money to pay for the infrastructure and services we need.”
“When the State Budget comes down on Thursday, we will be looking beyond just the new announcements and will want to see what is happening to levels of revenue and expenditure in the long term.”
“And we are calling for a proper debate which recognises that SA is not highly taxed comparatively, spends more as a proportion of its total budget on health, education and community services than any other state or territory, and that we need taxes to fund vital services.”
“We know taxes are politically contentious and there can be genuine differences on policy. But in the longer term, we would like to see a political consensus on revenue questions – at least in terms of what the indicators show and the parameters for debate – because it would be a disaster for South Australia if the coming election campaign avoids or mis-characterises tax and revenue issues and simply plays to populist perceptions of waste or promises of tax cuts without an understanding of what that will mean for service delivery.”
Download the SACOSS report No Option: Public Opinion and the Prospects of Tax Reform in South Australia.