NO.073

SMALL BUSINESS SAYS ABOLISH STATE TAXES

A survey released today has shown that small business overwhelmingly supports the phasing out of the remaining State business taxes due for removal as part of the Agreement to introduce GST.

As part of the Agreement in 1999, the States receive all GST revenue in exchange for abolishing State taxes identified for elimination.

The States now receive record amounts of GST revenue ($243 billion over the six years from 2004 05), a windfall of around $17 billion.

The study released by Eureka Strategic Research shows 86 per cent of small businesses want State Governments to eliminate the nine State business taxes to be abolished in return for GST.

No small business wants to be double taxed.

In New South Wales and Western Australia, 90 per cent of businesses say their State Government needs to commit to phasing out all nine taxes. These States, at present, are refusing to eliminate any further State taxes listed in the Agreement.

Shortly, only New South Wales and Western Australia will apply stamp duty on mortgages. Their citizens will be paying both GST and the taxes it was designed to replace.

If New South Wales abolished the agreed taxes on the Australian Governments timetable they would still receive a windfall of $394 million from the GST revenue and Western Australia would get a windfall of more than $1 billion over the six years from 2004-05.

The Australian Governments proposal involved the abolition of $8.8 billion in taxes over the four years from 1 July 2006 if these taxes were still imposed in all jurisdictions. The States have a clear message from their business communities to get on with the abolition of these taxes.

Contact:

David Alexander
(02) 6277 7340

MELBOURNE

25 August 2005