South Australia needs a radical overhaul of taxation and spending programs in order to repair state finances and reinvigorate the economy, a key property industry lobby group says.
In its pre-budget submission, the Property Council of Australia (SA division) said restoring the state’s finances will require ‘courageous leadership’, and has called on the state’s government to use the budget to create a more efficient and enterprising state with lower taxes.
“The Budget’s difficult fiscal position is clear and with the Government’s election commitments yet to be factored in to the forward estimates, there is an urgent need to drive savings and initiate reform,” the Council’s acting executive director (SA Division) Lino Iacomella said.
In its submission, the Council calls for a ‘root and branch’ review of state taxes, including measures to broaden land tax and reduce the top marginal rate of this tax.
It also wants the repeal of outdated legislation and regulation and liberalisation of trading hours as well as the appointment of an independent Audit Commission to examine the structure and function of the public service and the establishment of a new infrastructure body to identify and prioritise industry projects and funding opportunities.
The Council’s call comes amid a recognised need to address state finances, with the latest updates suggesting public sector debt would peak in 2015/16 at $9.349 billion, or 53.9 per cent of Gross Domestic Product.
Its recommendations are broadly consistent with sentiments across the state’s broader business community.
Unveiling a Charter for a More Prosperous South Australia earlier this year, Business SA, for instance, called for 68 action points across 10 broad areas, including an overhaul of taxation arrangements and a target of reducing the red tape compliance burden by at least $150 million every two years.
Iacomella said South Australia has the highest top rate of land tax anywhere in the country, and adds that the state also needed to engage with the Federal Government and other states to maximise opportunities to replace other taxes such as stamp duty.
“The property sector is ready and willing to work with government on a bold agenda to boost South Australia’s performance,” he said.