Media Release – State Tax Review

Media Release | 1 September 2021  

Independent Member for Nelson Meg Webb today called for an Independent State Tax and Revenue Review.

Ms Webb will use her Budget reply speech to outline a model for a comprehensive review of Tasmania’s taxation and revenue system.

“There are growing concerns over Tasmania’s capacity to cope with future economic shocks,” Ms Webb said. “I am calling for support from all sides of Parliament for an Independent Expert Panel Review of Tasmania’s tax system.”

Ms Webb said the Review, commissioned by Parliament, will both serve as a political circuit breaker and deliver expertise-driven recommendations to inform any future structural reform efforts.

“We know wages are not keeping up with housing, education and other cost of living pressures for Tasmanian families. We know demand for essential services is projected to grow but our current narrow revenue base may not be able to deliver to meet them.

“Further, economists warn that in addition to our dated and limited tax base, we have little to insulate ourselves against future external shocks outside our control, such as cuts to Tasmania’s share of the GST pie.”

Ms Webb said Tasmania does not have a plan to make its economy more robust.

“Instead, should the financial house of cards come crashing down the Government will rely on the same tax and slash and burn policies which have contributed to the current structural fragility and exposure in the first place.

“Doing more of the same is not a sustainable solution. In fact, we know that is the definition of insanity.”

Ms Webb said consecutive Governments have lacked the necessary political will to undertake a comprehensive evaluation and structural reform of Tasmania’s tax and revenue system.

“For too long it’s been put in the too-hard basket. The Premier Peter Gutwein continues to assert Tasmania’s economy is strong and sound despite unforeseen obstacles.

“Now is the time to tackle this serious, but long-ignored problem. If times of financial adversity are not the right time, then surely periods of financial resilience are.”

Ms Webb said Tasmania – more specifically the State’s two houses of Parliament – must have the courage to commission this independent expert panel.

“We must test and improve the fairness and efficiency of the State’s taxation and revenue system.”

Ms Webb said the Independent State Taxation and Revenue Review should adopt the same model proposed by the Premier’s Economic and Social Recovery Advisory Council (PESRAC) for its Local Government reform proposal.

“The ACT completed a similar Review in 2012 and NSW is currently undertaking a state taxation review.”

Read the Background Briefing Note:  Proposed Model for an Independent Expert Panel to Undertake State Taxation and Revenue Review, Meg Webb MLC, September 2021 here