• CCIWA propose GST reform in submission to The Productivity Commission


    photo-documents-meetingThe Chamber of Commerce and Industry of Western Australia (CCIWA) has made a submission to The Productivity Commission proposing that the GST be reformed to create greater incentives for states to contribute to national economic growth.

    The submission, which is supported by a range of WA business organisations including REIWA, recommends reducing the overall distribution between states by either discounting a portion of revenue or equalising to a pre-determined level of acceptable services.

    It also recommends excluding a portion of mining royalties.

    The CCIWA submission states “these proposals ensure that every Australian citizen lives in a state that has the capacity to deliver an acceptable standard of services, while also restoring strong incentives for states to promote economic development”.

    CCIWA’s two key recommendations are:
    1. Immediately introduce a 0.70 ratcheting relativity floor for all states. The floor should be introduced at WA’s current relativity and increased each year WA exceeds that floor, until the floor reaches 0.7. Based on WA Treasury relativity forecasts, no state’s GST relativity would be impacted as a result of the floor in the next two years.
    2. Implement partial equalisation over a transition period to strengthen incentives for states to develop their industries. This can be phased in over time and will stimulate national economic growth, growing the GST pie.

    “These recommendations will create GST revenue stability for the leading state and strengthen incentives for all states to full develop their industry and boost national economic growth,” the submission states.

    For more information, view CCIWA’s ‘Horizontal fiscal equalisation’ submission to The Productivity Commission.