SYDNEY, 23 June 2021: NSW Treasurer, the Hon. Dominic Perrottet, MP announced his State Budget yesterday, including a welcome stance on positive tax reform. Budget measures included abolishing motor vehicle duty on electric vehicles and continuing payroll tax cuts for the 2021-22 year.
The Tax Institute, which continues to champion the cause of tax reform on behalf of the tax profession, welcomes the announcement, but recognises the putting in place policy and measures for tax reform is a long road.
“NSW Treasurer Dominic Perrottet has come out with a strong position favouring bold tax reform. We applaud that leadership and look forward to working with Treasury on options for tax policy reform in the years to come,” said The Tax Institute’s Director, Tax Policy and Technical, Andrew Mills, CTA (Life).
“Tax reform is not a quick and easy job. It takes considerable technical and legal knowledge, it takes a lot of time and analysis of interweaving impacts and it takes brave political leadership. It’s not something tax professionals can bring about wholly on their own, so it is heartening to see government recognise tax reform’s vital role in bolstering our economic growth and strength.”
In his speech, the Treasurer said, “…while other states resort to lower wages and higher taxes, we will do the opposite” a claim that Andrew says highlights the rift in tax reform thinking between states.
Andrew said that while the NSW Budget made promising steps forward on tax reform, the Queensland State Budget, released on 15 June 2021, had little mention of tax policy, while the earlier Victorian State Budget, delivered on 20 May 2021, while increasing the payroll tax threshold, announced a controversial new stamp duty ‘premium’, increases to land tax and a new 50% "windfall gains tax" for rezoned land. Similarly, the South Australian Budget included some tax concessions but little in the way of structural reform.
“What these very different approaches show is that there is no unified plan or thinking around our tax system. Everyone is working not only independently, but on some topics, at complete odds with each other. It’s a recipe for disaster,” Andrew said.
South Australia Budget