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South Australia: Premier supports the call for an urgent summit to deal with both the High Court decision on sales tax and fundamental tax reform

TONY EASTLEY: It seems Mr Court has got a lot of support from South Australia. This morning, South Australian Premier, John Olsen, told the World today's Mark Willesee that he and other Premiers support the call for an urgent summit to deal with both the High Court decision and fundamental tax reform.

JOHN OLSEN: The other Premiers have been in contact with me in terms of the need to look at a tax summit to look at the question of Federal-State relations, the revenue base of the States post the High Court decision.

MARK WILLESEE: How far do we need to go on tax reform?

JOHN OLSEN: Well, I've indicated previously that I think that Australia needs fundamental taxation reform. The High Court decision, I think, accelerates that need. The revenue-raising capacity of the States has been eroded as a result of the High Court decision. If States are going to be held accountable and responsible for revenue raising to meet the provision of essential services within the community, they've got to have a base in which they're able to do so. That base has been substantially eroded, therefore a fundamental review of taxation and Federal-State relations and the capacity of States to meet their obligations, I think, has now become essential.

MARK WILLESEE: There must be varying degrees of reform being pushed by each Premier. Do you agree with WA that there needs to be an entire reform of the tax system?

JOHN OLSEN: Well, I've indicated previously fundamental taxation reform is important for this reason: South Australia adversely is impacted by wholesale sales tax, a tax placed on manufactured goods that doesn't have the same impact in Western Australia, Queensland or New South Wales because of mining, and financial services and tourism services are exempt from the wholesale sales tax. So South Australia and Victoria, in that respect, have a disproportionate burden of the tax base. Therefore, for fairness and equity, that is one area that I think needs to be on the agenda for debate.

TONY EASTLEY: South Australian Premier, John Olsen, speaking to our reporter, Mark Willesee, in Adelaide.