ACT a model for tax reform, says Swan
ACT Treasurer Andrew Barr arrives for the state and territory treasurers meeting in Canberra on Monday. Photo: Alan Porritt/AAP
The ACT has been held up as an example for other jurisdictions to follow when it comes to reforming tax.
During Monday's meeting in Canberra between federal Treasurer Wayne Swan and his state and territory counterparts, the ACT was praised for its progressive approach to stamp duty on property sales.
Mr Swan repeated statements he had put in writing for his weekly Treasurer's Economic Note.
Stressing that tax reform wasn't exclusively the job of the federal government, Mr Swan said all levels of government had to do their share of the "heavy lifting", as the Henry Tax Review made clear.
"The states have both some of the nation's least and most efficient taxes," he said.
"A prime example of a damaging tax is stamp duty on home sales, which discourages Australians from relocating for work opportunities and makes it much harder for people to upsize or downsize as their family circumstances change.
"In this regard, the ACT government is showing what can be achieved with its plan to phase out stamp duty over time.
"It's getting rid of this inefficient tax by reforming its own tax base, rather than expecting somebody else to foot the bill."
Following the Standing Council on Federal Financial Relations, ACT Treasurer Andrew Barr said he was pleased Mr Swan noted that the territory was leading the way in this regard.
"Swan basically said that if the ACT is able to do it, why can't the rest of you," he said.
"But the meeting was big on stressing that the state and territories aren't going to get anything for free.
"It was all about how Commonwealth funding for big projects impacts on what GST revenue we will get or lose."
On the GST, Mr Swan said the federal government would not be raising the rate or broadening its base.
New South Wales Treasurer Mike Baird and South Australian Treasurer Jack Snelling were appointed to lead an examination of the GST as it relates to goods bought online from overseas.
"There was unanimous agreement to do the work towards lowering GST thresholds on imported goods," Mr Barr said. "The states and territories are prepared to make some short-term investments to establish a system that works.
"With online shopping trending as high as it is, we need to address the GST implications."
A business case will now be set up to look at what will be required to get a system that addresses the involvement of agencies such as Customs and Australia Post, as well as large international web-based retailers in the collection of GST revenues.
The current threshold at which GST is collected on goods and services bought from overseas is $1000, which is high by international standards.
The states and territories want it lowered to $500.
They must make recommendations to the federal government by the end of next year, following the completion of their business case.