Ken Raiss, managing director at Chan & Naylor, said that the federal and state governments must also contemplate the state taxes and duties that the GST was originally set up to replace.
“We need to review the GST and how it is allocated, which does not necessarily mean increasing the rate or the base of the tax,” said Mr Raiss.
“Treasury should look instead at increasing the co-operation between the states and review regressive taxes such as stamp duty, land tax and pay roll tax, which are all disincentives to employment and productivity.”
Mr Raiss said that as the Australian economy inevitably recalibrates back to growth, so too will the rate of money going through the fiscal system if the government adopts a more commercial approach to ‘growing the pie’.
However, he said there are more immediate issues that need to be addressed, including reigning in expenditure and managing the increasing and unsustainable welfare net coupled with a nervous superannuation and saving regime.
“Australia requires stable and sensible regulations for SMSFs, labour, banking and tax as well as incentives and investment to encourage national productivity. It is this combination that will grow confidence to generate spending, business cash flows and employment,” said Mr Raiss.
Mr Raiss also reiterated his view that the Abbott government must start operating as a business with a social conscience if it is to increase Australia’s productivity and long-term wealth.
“The government should be setting the nation up for hope and increased confidence rather than disillusionment,” he said.
“We need to focus on restoring the health to the vital organs of a functioning economy, namely employment, growth and sustainability. This means encouraging small and big business to expand and grow through innovation and employing aspirational Australians.”
