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Commonwealth/State relations - Premiers conference



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COMMONWEALTH/STATE RELATIONS - PREMIERS CONFERENCE

This Friday's Premiers Conference presents the Prime Minister with a golden opportunity to make real and lasting reforms in Commonwealth/State relations.

If the Prime Minister is fair dinkum on the issue let's see him do another backflip and adopt some of the other elements of the Fightback! package.

For a start he could look at the following:

. Abolishing the tax on employment - State payroll tax

. Providing the States with a share of income tax where:

the States would be accountable for an identifiable component of national personal income tax; any proposed changes to these arrangements would require the consent of the Commonwealth so as to

ensure the effectiveness of the Commonwealth's overall responsibilities for macro-economic policy; the proposed arrangements would be revenue neutral with no effect on the rate of personal income tax paid

by individuals (ie no double taxation).

Leaving aside the bluster of Mr Keating on last week's Pay TV and airline privatisation announcements, decisions which were long overdue, the Prime Minister should focus on the much more

difficult area of Commonwealth/State relations.

Fightback! endorsed the approach which gives the States the right to make more of their own decisions on taxes and spending - and to be responsible for the consequences of those decisions.

Reform in Commonwealth/State relations is one of the more effective and lasting ways of boosting Australia's economic performance - unfortunately the Prime Minister is not up to the

If he was he would begin with the abolition of payroll tax -

after all his Labor State colleagues have supported the idea. (See attached quotes)

task.

10 June 1992 Melbourne

Contact t David Turnbull (06) 277 4277

JOAN KIRNER, VIC PREMIER, ON PAYROLL TAX

"A payroll tax is a tax on jobs."

(Radio 3L0, 12 November 1991)

KEITH DE LACY, QLD TREASURER, ON PAYROLL TAX

"Honourable Members should remember that payroll tax is a tax on wages and a savage one at that. Payroll tax is a tax on

employment - a very savage tax - that has escalated rapidly and has become the major form of taxation revenue for the Government of Queensland."

(Hansard, 15 November 1988, p2544)

JOHN HANNON, SA PREMIER, ON PAYROLL TAX

"Our Party is strongly opposed to pay-roll tax. We believe it is an inequitable tax..." (Hansard, 3 December 1980, p2563)

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CARMEN LAWRENCE, W A PREMIER, ON PAYROLL TAX

"The present process condemns State governments to the narrow, inefficient, regressive and unstable tax regimes which they operate today. I am sure you would join me in regarding as

bizarre the imposition of payroll tax, particularly in the present economic climate. How can anyone justify the States depending on what is effectively a tax on employment as a major instrument for raising revenue?"

(Speech to Australian Mining Industry, 2 May 1991)