How many more taxes can we bear? 115



View Profile

How many taxes can we bear here in Australia? Apparently more discussion on new taxes is coming.

A new Green Paper prepared by Tony Abbott’s own office suggests that the funding of our states and territories could be the next big debate that rises to the fore in the debate about tax and from this, it doesn’t look pretty.

The paper, which has been released in draft suggests that states could be funded through a single annual payment from the Commonwealth and then given more scope to raise their own taxes, a thought that will chill many to their bone.

The proposal outlines three different alternatives for the overhaul of our federation and how fiscal imbalances are handled where the Commonwealth raises and distributes income to states that need it for their provision of services like education and hospitals.

The Sydney Morning Herald this morning reports that the first option being considered in the report is a “single, untied funding stream” to be spent on agreed service delivery areas such as hospitals and schools. It would replace the current web of payments and “national partnership” agreements.

They quote the Prime Minister and Cabinet report as saying “this option would provide states and territories with greater policy autonomy, especially in terms of using funding to drive their own economic priorities. It would reduce the Commonwealth’s ability to prescribe conditions on its funding in areas of state and territory responsibility”.

But it would also raise very clear challenges around accountability for national and significant taxpayer funded projects.

The second options sees the Federal Government “making room” in the income tax base so that states and territories can raise their own tax rates.

“…the Commonwealth would reduce personal income tax rates by a certain amount and states and territories would be allowed to apply a ‘surcharge’ of an equivalent amount,” said PM&C.

An environment like this could look similar to that of America, where different states compete, using their tax rates, to attract businesses and individuals to live there.

An important part of the second option is the potential GST broadening that sat within the paper.  According to the SMH, a per-capita GST allocation would require a $6.5 billion one-off payment to states to ensure no one is worse off, according to Mr Abbott’s department.

A third option sees the states and territories revenue raising reduced and the federal government expanding their funding and policy roles.  It may certainly even see the tier of government at state level shrinking.

As you can see, there is a number of debates within this one change that the Opposition has already stepped up to the plate on.  The first of which is a raised or broadened GST, which no doubt worries many.  Second, do we really want to pay more taxes to our states and do we think the Federal Government will really drop their core tax rates to allow for it? And thirdly, the big one – do we really need states at all? 

Rebecca Wilson

Rebecca Wilson is the founder and publisher of Starts at Sixty. The daughter of two baby boomers, she has built the online community for over 60s by listening carefully to the issues and seeking out answers, insights and information for over 60s throughout Australia. Rebecca is an experienced marketer, a trained journalist and has a degree in politics. A mother of 3, she passionately facilitates and leads our over 60s community, bringing the community opinions, needs and interests to the fore and making Starts at Sixty a fun place to be.

  1. Has anyone else noticed that this Government are cowards? They seem to want to push all the nasty things onto the States, And the States are not having a bar of it, it will them who face political suicide , while Abbott smiles and says “it’s not me “

  2. When the GST came in all the other taxes and state charges e.g. Stamp duty were supposed to be done away with. We all know how well that went. Now we have extra taxes on alcohol, tobacco and petrol so that most of the cost of these things goes to the government. The federal government taxing us is bad enough but who’d trust the states with setting their income tax?

    5 REPLY
    • What about the useless water plant we paid for the tunnel we can,t have the list is endless,the stupid government should put that to referendom.

    • What about the useless water plant we paid for the tunnel we can,t have the list is endless,the stupid government should put that to referendom.

    • There is another alternative to the proposal – get those parasite mining corporations to start paying their way – tax them 10% of their ridiculous profits BEFORE it goes to their shareholders, and review all tax concessions. Those resources they dig up and sell offshore belong to ALL Australians, yet I don’t see Gina Reinhardt giving up any of her wealth to us ordinary taxpayers for the privilege of access to those minerals.

      1 REPLY
      • That’s the way to go rod.
        Let us see Abbott go after them ?????
        Rather than the little people all the time.
        I know a farmer who is very very rich and has paid NO tax for twenty years.
        The can delay the tax until they die.
        By then the money has been put overseas out of the way.
        Lets have a good look at these systems and get them to pay up.

    • Instead of just picking on mining companies who are facing a downturn too, let’s pick on the banks also for their obscene profits.

  3. They going to drive the poor onto the streets begging a lot faster..this is an irresponsible Government

    1 REPLY
    • Janet that is their idea,
      Then they will get you back to work on low rates.
      The Libs have always done that.
      In fact Howard tried with his work of no choices, guess who wrote that lot up ABBOTT.
      Get you out of work and then you will take anything to feed yourself.

  4. Does any one have any idea approximately how any days to an election day?? I think i might start a count down clock!!

    6 REPLY
  5. The ordinary man is about to take his last breath…. It, too, will be taxed. George Harrison’s fabulous song ‘Tax Man’ comes to mind … Stretch a rubber band far enough and it will break. To pay tax is fair – to be taxed to death is not.

  6. About time we got rid of all the morons .of all sides They have wrecked Australia.come the revolution!

Leave a Reply

Your email address will not be published. Required fields are marked *