catallaxy files

catallaxy in technical exile

South Australian business tax

with 2 comments

In late 2008 Julie Novak, Kate Herbert and I released an analysis of the State Business Tax burden. It generated a lot of interest – the Victorian government, for example, quotes from the report when criticised over land tax. Other state governments, however, went feral. The premier of South Australia was particularly critical. I can’t find the original piece on South Australian ABC radio, but basically he said we were incompetant. In particular, he argued we had ignored payroll tax cuts. We hadn’t ignored the proposed tax cuts; they apply to this year, not last year, and are included in this years analysis. But he couldn’t help himself, he went even further. (emphasis added)

Premier Mike Rann said the IPA report would not have taken into account the latest cuts to payroll tax.

Mr Rann told ABC radio it was also important to keep the balance between revenue and expenditure needs to help provide extra funding for health and to employ more doctors, nurses and police.

Yes, well; that is a testable hypothesis. The Australian Financial Review report that the South Australian mid-year budget is in for the current year. Remember Mr Rann spends his money on doctors and nurses and police (I imagine teachers too).

South Australian government agencies have blown their budgets by more than $100 million and Premier Mike Rann’s own department is one of the worst offenders.
The Australian Financial Review reports that the blow-out is detailed in the Treasurer’s Quarterly Statement on the Consolidated Account, which was gazetted on December 23.
It details the performance of the government’s main operating account for the past financial year, including the cash payments made to departments and most revenue collected by the government.
Only in June the government predicted in the state budget that it would underspend the consolidated account’s allocation of $9.44 billion by about $43 million.
But the quarterly statement shows the government instead overran its budget by more than $100 million in the year to June 30, doling out $9.55 billion.

It seems that the South Australian government haven’t overspent on health and police, but have overspent in most other areas.

Julie Novak did an update of the State Business Tax Burden in 2009. Despite performing much better on payroll tax, South Australia is now the worst state for business taxation.

Written by Sinclair Davidson

January 4, 2010 at 8:38 pm

Posted in Uncategorized

2 Responses

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  1. And SA has the most complex and outdated tax legislation as well. Which makes doing business there even harder.

    But NSW takes the cake, as the only jurisdiction left (bar SA) that taxes private company share transfers and mortgages.

    Land tax is a crime against humanity.

    Rococo Liberal

    January 5, 2010 at 9:05 am

  2. You’d think that we would have the best schools and hospitals, best policed streets with no unsolved crime with all tax rises being used ” for health and to employ more doctors, nurses and police”.


    January 5, 2010 at 9:21 am

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