PRESSURE appears to be mounting on the State Government to raise taxes in its forthcoming May budget.
Over the past month, WA Treasurer Eric Ripper has been painting a grim picture of the State’s finances.
In a series of statements he has claimed Federal Government moves to cut $18.3 million in State grants will threaten WA’s sovereignty and put a strain on its finances. Industry leaders and economists believe this indicates WA Government spending has blown out and that tax hikes could be on the way.
Mr Ripper has gone out of his way to deny any return of the unpopular Premium Property Tax, but industry speculation points to a hike in stamp duty tax.
They believe the Government does not have a revenue problem due to the higher-than-expected royalties from oil production and stamp duty windfalls due to the property boom WA has been enjoying.
If this higher rate of stamp duty was applied to the higher end of the residential property market, this would be a pseudo Premium Property Tax.
However, a spokesman for Mr Ripper denied a spending blowout and said the Government’s promised “efficiency dividend” was likely to be delivered.
“We identified a whole pile of savings – $852 million over four years,” the spokesman said.
“We are on track to achieve that but in addition we’ve been going over this budget to see if we can find any more.”
The Government undertook a review of business taxes, the outcome of which has since been given to Mr Ripper. Its findings will be released through the Government’s budget.
Suggestions mooted in that review are understood to include things such as raising stamp duty rates, putting in a flat but higher rate of payroll tax, and widening the definition of land-rich companies.
However, the organisations that took part in industry consultations on that review are less than optimistic about any real tax cuts.
Property Council of Australia WA executive director Joe Lenzo said he did not expect any favours on stamp duty.
“Our main push was that the property industry was over-taxed. We suggested the Government reviewed how it charged mining royalties,” Mr Lenzo said.
Chamber of Commerce and Industry chief executive Lyndon Rowe said the Government would have more than a $9 million surplus due to high oil prices and the property boom.
“So the business community will be pretty unhappy if we get tax increases,” he said
