The State Government has held out the possibility of major tax reform after committing to establish a wide-ranging review of state taxes.
Treasurer Eric Ripper said the upcoming review would look at all taxes, not just business taxes.
It would have a similar structure to the 2001 business tax review, which was guided by a business reference group chaired by Jackson McDonald partner Jonathan Ilbery.
One of the major constraints on the business tax review was that new measures had to be introduced to offset the effect of any tax reductions.
Mr Ripper told a budget briefing last week the upcoming review would not impose the same tight revenue neutrality restriction.
He said the upcoming review would also look at issues of competitiveness and would seek to reduce distortions in the tax system.
On the issue of tax competitiveness, the Government has adopted a new target that paints the state in a glowing light.
WA is the lowest taxing state in the country when tax is measured as a percentage of gross state product. In contrast, the former ‘per capita’ target had WA as the third highest taxing state.
The Government argues the old tax target was distorted by varied growth rates across different states.
The planned state tax review follows minimal changes in this year’s budget. The biggest change was an adjustment to the land tax scale, costing $54.5 million.
Mr Ripper continued to resist pressure from his federal counterpart, Peter Costello, to fall into line with most other states and abolish three targeted taxes.
The impact of the tax concessions announced in the budget will be more than offset by strong economic growth and rising property values.
Land tax collections, for instance, will increase $5 million to $320 million, even after adjusting for changes to the threshold.