Eliminating inefficient elements of state taxes, such as the payroll tax threshold and conveyancing duties on the transfer of properties, would add a third of a per cent to Australia’s GDP, says Victoria University economist John Madden.
Professor Madden from the University’s Centre of Policy Studies will join a leading panel of economic experts examining Tax Reform in a Modern Federation at the next Melbourne Economic Forum tomorrow.
He will assess the economic gains from proposed state and federal tax reforms.
“There are clear economic gains to be had from these reforms but they would only have a minor impact on the budgetary problems of the federal and state governments,” he said.
“The government faces a considerable fiscal task that requires substantial tax increases to meet planned public expenditures. Economic modelling suggests that increasing the payroll tax rate would be less damaging to the economy than an increase in the GST rate.”
The Turnbull government has pledged to place tax reform at the top of the policy agenda but the hardening of positions on tax reform from unions and business underscores the difficulty the government will face in achieving consensus on a tax package.
Other speakers at the Melbourne Economic Forum include:
- Professor Ross Garnaut, Professorial Research Fellow in Economics, University of Melbourne
- Professor John Daley, Chief Executive Officer, Grattan Institute
- Professor John Freebairn, Ritchie Chair of Economics, Department of Economics, University of Melbourne
- Professor Miranda Stewart, Director, Tax and Transfer Policy, Australian National University
- Laureate Professor Emeritus Cheryl Saunders, Director of Studies, Government Law, Co-Director of Studies, Public and International Law, Melbourne Law School, University of Melbourne.
The Melbourne Economic Forum is a joint collaboration between Victoria University and the University of Melbourne. It is run in association with the Australian Financial Review.
