Treasury has released a Draft Report on the Government’s moves to have Federal financial relations reviewed.
According to Treasury, the Draft Report, NSW Review of Federal Financial Relations – Supporting the road to recovery sets out a roadmap to realign financial relations between the Commonwealth and the States to help the economy recover and ensure future Governments can continue funding the essential services and infrastructure citizens expect.
The report was produced by an independent expert Review panel appointed last year by Treasurer, Dominic Perrottet.
“[The Report] says federalism has served Australia well and remains one of the most economically efficient forms of government,” the Treasury said.
“However, it warns the benefits are being undermined in Australia by duplication, bureaucracy and creeping centralisation, which has given too much financial power to the Commonwealth and fostered ‘a learned financial dependency amongst the states’,” it said.
“The Report advocates changing Australia’s tax mix to make taxes as simple as possible and to limit the impact they have on citizens’ lives, such as the decision about when to move house and whether to take out insurance.”
The Treasury said the Report made clear that genuine reform couldn’t be achieved by simply raising the total tax take.
The Report makes 15 recommendations, including to review and reform all Commonwealth-State funding agreements; State treasurers to assess and agree options for lifting and/or expanding the base of the GST in consultation with the Commonwealth; replace stamp duties on property with a broad-based land tax; and establish the National Cabinet as the permanent decision-making body to guide the federation.
The Independent Panel’s 99-page report can be accessed at this PS News link.
