"The great tax con"

NSW Daily Telegraph, Simon Benson, 22 April 2005

THE Federal Treasurer has gone to war with NSW over five obscure business taxes, under the falsehood of tax relief for ordinary punters.

The taxes have nothing to do with land tax, stamp duty, vendor tax or even payroll tax - the main levies that affect NSW residents.

They are so obscure that the majority of people in this state would have never heard of them. Unless they are in business they will never have paid them, either.

Yet it is these taxes - which the Federal Government is demanding NSW abolish - that are deciding the financial position of this state for the next five years.

Mr Costello's refusal to buckle on a fairer GST agreement for NSW began to unwind yesterday.

Business groups dismissed his calls for business to move out of NSW.

Australian Business Limited CEO Mark Bethwaite said: "The ongoing stoush between the NSW Premier and the Federal Treasurer is an orchestrated distraction hiding record taxation levels in Australia.

"Premier Carr is right to argue for NSW to receive a fair share of GST revenue and the Federal Treasurer is right to demand that NSW cut its business taxes.

"The facts are clear. NSW is short changed by the Commonwealth Grants Commission and NSW taxes are too high."

Mr Costello is offering $330 million over two years in compensation if the State Government abolishes the five business taxes, which amount to $1 billion revenue every year, as part of the five-year review of the GST agreement with the states.

All states except NSW and WA have agreed to sign a new deal.

The NSW Government, which subsidises other states in the carve up of the GST pool, claims it will leave the state $700 million worse off.

Premier Bob Carr said he was prepared to abolish the taxes, but only in return for a better deal from Canberra.

"The bottom line is we can't afford what they are demanding we do," said a spokesman for Mr Carr.

"And it has got nothing to with NSW taxpayers. It's to do with business.

"They are obscure taxes that won't provide NSW families with any benefits.

"In fact NSW families will be worse off, not better off."

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