The release of the Tax Discussion Paper on March 30 marks the start of an important national debate about how we collect and distribute Australia’s taxation revenue.
The Government will use the feedback it receives on the Discussion Paper to inform a Green Paper outlining options for Tax reform, to be released in the second half of 2015, and then a White Paper on the Government’s final policy position, expected in 2016.
The Tax Discussion Paper is also the next step in the broad review of government, which includes the complementary White Paper on the Reform of Federation.
As the Prime Minister has made abundantly clear, the two White Paper processes must proceed in parallel because any changes in roles and responsibilities between the three levels of government must be accompanied by a reallocation of the necessary revenue to carry out those roles.
At present, local government collects just three percent of the tax revenue in Australia and yet we are responsible for about six percent of public sector expenditure and we maintain almost 23 percent of public infrastructure (valued at around $330 billion).
ALGA, and state and territory local government associations, will be participating in the review of taxation with the objective of ensuring, as far as possible, that our tax system delivers the revenue to local government which we need to meet local community needs.
We will be highlighting the need to maintain the integrity of our rating system in the face of rate capping in some jurisdictions, the increasing pressure on councils for rate exemptions and concessional treatment and the imposition of levies by state governments.
We will also be exploring how any potential reforms to land tax might impact on councils and what any changes to the GST might mean for local government.
It is important that local government’s voice is heard in this debate and I encourage all councils to make a submission on the Discussion Paper.
This is an opportunity to ensure that the reforms which flow from this process strengthen rather than weaken local government’s ability to meet the needs of its communities.
