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Reader’s Response - Another take on tax debate

IN terms of my involvement in the tax debate (State Scene, March 23 2006), I have been published in The West Australian at the time the “ginger group” was operating. Furthermore, as minister for local government, I provided the reference to David Hawker’s standing committee to investigate government cost shifting, which resulted in the facts you have identified. During the period of that inquiry I travelled Australia, pleading with local government to seek a share of GST, in return for accepting 100 per cent responsibility for all their local services such as doctors, hospitals, schools, policing etc. Were they also funded to maintain the so-called main roads that traverse their areas, they too might receive appropriate attention. At least their local community would know whom to blame. Notwithstanding their desire for more money local government was not interested in confronting their state masters on the issue. Thus triplication of service costs continues. I have consequently proposed that the Australian government send the 50 per cent of state income it raises through taxation directly to those people who receive state government services – i.e. a voucher for approximately $5,000 per school child to all parents, cashable at any approved school. Parents could then have some chance influencing curricular and the quality of teaching effort. Another option would be the full subsidisation of private health insurance premiums of all elderly and young people and the removal of the Medicare levy, which would no longer be required, if everyone took this offer and joined private health. You might choose to select some other options In terms of simple responses to the tax system, some simple statistics are of interest. Prior to the last budget, the cost to discontinue the 47 cents in the dollar personal tax rate was $13 billion. The revenue reclaimed by discontinuing the $6,000 tax-free threshold and returning $1,000 cash to the million taxpayers genuinely disadvantaged by such a change was approximately $10 billion. In other words, there are a number of initiatives that don’t destroy the revenue yet greatly improve fairness in the tax system. An increase in the GST to somewhere between 13 and 15 per cent on all transactions would raise enough revenue to replace all existing state taxes. Did you know a typical Perth house owner pays $30 per week for stamp duty on hire purchases as they change houses from time to time? You may wish to write about some of these issues. (Wilson Tuckey - Member for O’Connor)

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