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Western Australia Premier Colin Barnett proposes increase to GST

| 07.07,09. 12:17 AM |

Western Australia Premier Colin Barnett proposes increase to GST

June 08, 2009 03:40pm

Increased GST under WA proposal
Premier says it will help states
Calls for tax hike on 4WD owners

THE GST would be increased from 10 per cent and owners of four-wheel-drives could be slugged with higher taxes under proposals from one state government.

The Western Australian Government proposes the 10 per cent Goods and Services Tax - introduced in 2000 with the promise that it would not be lifted - be increased to benefit state governments.

Premier Colin Barnett told ABC Radio in Perth that the proposal formed part of his government’s submission to a national review of the taxation system, headed by Treasury's Ken Henry.

"Whenever the Federal Government sets up a tax review, it always ends up talking about state taxes," Mr Barnett said. "And what the State Treasury has done there and (Treasurer) Troy Buswell has (done is) simply put in a point of view on a range of issues.

"For example, if you want to get rid of payroll tax, and perhaps we'd all like to do that, then the only alternative would be probably an increase in the Goods and Services Tax, and a fair sharing of that tax between the states."

According to The West Australian, the submission did not specify how much the GST should be increased.

The GST is collected by the Federal Government and distributed wholly to the states.

But total GST revenue has fallen in the past year, limiting the spending power of the states.

"At the moment, West Australia - with 11 per cent of the population - is looking down the barrel of getting back 50 cents in the dollar. Well that's just not acceptable," Mr Barnett said.

"So what our State Treasury has done is put some of the broader issues on the table."

He also said that he was not looking to increase state government taxes, but would be pushing for changes at a federal level.

In particular, Mr Barnett said that higher taxes on larger vehicles could be introduced.

"We've just brought down our State Budget, we're not about to start introducing new charges on motorists.

"In talking to the Commonwealth and the issue of joint funding for roads, I guess they are some of the broader issues, and maybe the vehicles that cause most of the damage to the roads probably should pay more than the average driver of a light vehicle."

The Henry Review of the national taxation system is due to report to the Federal Government at the end of the year.

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