Like most Australian states, the South Australian government’s tax base is relatively narrow. Its main taxes are collected from:
- Stamp duty on property transactions
- Land taxes
- Payroll tax
- Motor vehicle taxes
- Insurance taxes
- Gambling taxes
These taxes contribute $4,442m to the 2015-16 state budget and make up about 27% of state government revenue. The SA share of GST revenue [which is collected by the Commonwealth and then redistributed] contributes $5,518m or 32% of state revenue. The the remaining 41% of revenue is made up other Commonwealth grants and a variety of small income streams (Figures from SA Budget Paper, No. 3).
This narrow state tax base is even more problematic because it relies on 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. And most importantly, SACOSS remains concerned that, while state revenues have recovered a little from the historic lows of 2013/14, the revenue base is not adequate to pay for the vital services that our community requires from the state government.
In 2015 SACOSS put in a major submission to the SA government’s State Tax Review and proposed a number of key changes to make state taxes fairer and to raise the revenue needed to provide vital services. In 2016 SACOSS also developed a range of proposed reforms to state gambling taxes which were put forward in our major report, Losing the Jackpot: South Australia's Gambling Taxes. The government has implemented one of the major gambling tax proposals with the introduction of the point-of-consumption wagering tax, but SACOSS has continued to advocate for other changes.
SACOSS is currently advocating for:
- reform of gambling taxes on poker machines to promote harm minimisation measures
- investigation of inheritance taxes on large estates
- reform of property taxes with the introduction of a dis-used property tax and replacing real estate conveyance duties with an annual land tax (provided adequate safeguards are in place for those on low incomes).