The Business Council of Australia (BCA) has thrown its weight behind the Chamber of Commerce and Industry of Western Australia’s (CCI) proposal to reform the GST and stimulate national economic growth.
In its submission to the Productivity Commission (PC), the BCA called for the PC inquiry to recommend partial equalisation – as called for by CCI – as this approach would reduce the “disincentive for states to pursue reforms that grow their revenue base or achieve service delivery improvements”.
The BCA submission also calls for the implementation of a ratcheting GST floor, below which no state or territories’ share should fall, which would be introduced as WA’s GST relativity recovers. CCI recommended a ratcheting GST floor in its own PC submission last month.
BCA noted “the WA Chamber of Commerce and Industry’s calls to exclude a portion of mining revenue [from the GST calculation],” and acknowledged “there is a disincentive imposed by the [Horizontal Fiscal Equalisation] system for the states to unilaterally develop any tax base, including mining revenue”.
CCI Chief Economist Rick Newnham said CCI and the WA business community was proud to have BCA’s support.
“The Business Council of Australia has looked at the big picture – GST is holding our country back from driving new growth through developing resources industries, and if reform is achieved, there can be more jobs, more prosperity and better opportunities for all Australians,” Mr Newnham said.
“The Business Council of Australia is a forum for the chief executives of Australia’s largest companies to promote economic and social progress in the national interest – their recognition of the need for GST reform to drive national economic growth is a powerful endorsement of what CCI, alongside WA politicians, business leaders and the entire ‘Team WA’ GST reform collective, have been fighting for.
“CCI has been leading the ‘Team WA’ charge in calling for GST reform in the national interest, and we welcome the BCA’s submission as a critical step forward in bringing ‘Team Australia’ together to drive change.
“CCI and the WA business community congratulate the Business Council of Australia for their insight and vision in approaching the GST issue from a national economic perspective, and we look forward to continuing to work with them in future.”
Recognition of the need for GST reform has been echoed by the Australian Petroleum Production & Exploration Association, the Chamber of Minerals and Energy, the Minerals Council of Australia, Rio Tinto, BHP and Woodside.
CCI’s submission was made in consultation with its 9000 Members and has the support of WA business leaders including Wesfarmers Chairman Michael Chaney, Fortescue Metals Group Chairman Andrew Forrest, investment banker John Poynton and Satterley property group’s Chief Executive Nigel Satterley, who together wrote to the Productivity Commission to support CCI’s proposal.
WA industry associations representing more than 18,000 businesses and more than 400,000 employees also endorsed CCI’s submission, with signatories including the Association of Mining and Exploration Companies, the Civil Contractors Federation, Master Builders Western Australia, National Disability Services WA, the Regional Chambers of Commerce and Industry WA, the Real Estate Institute of Western Australia, the Tourism Council and the Western Australian Road Transport Association.
To read CCI’s GST submission to the Productivity Commission in full, please click here.
Media contact: Kate Hodges – 0448 928 227