NSW Premier Dominic Perrottet ‘adds impetus to tax debate’, says Innes Willox

Australian Industry Group chief executive Innes Willox hopes Dominic Perrottet will provide ‘much-needed impetus’ to reopen the debate over tax reform.

Australian Industry Group chief executive Innes Willox.

Australian Industry Group chief executive Innes Willox hopes the elevation of Dominic Perrottet as NSW Premier will provide the “much-needed impetus” to reopen the national debate over tax reform and intergovernmental fin­ancial arrangements.

The former NSW treasurer foreshadowed a scrap over GST during his first press conference as Premier on Tuesday, calling on West Australian Premier Mark McGowan to renegotiate a GST deal that was “fair to the country”.

A keen advocate for reform of the country’s taxation system, Mr Perrottet has weighed up replacing property stamp duties with a recurrent land tax, which the Commonwealth Grants Commission has concluded could entitle NSW to GST compensation from other states.

Mr Willox threw his weight behind any push by Mr Perrottet for taxation reform, saying “it may well be a case of cometh the hour, cometh the man”.

“Premier Perrottet’s passion for rectifying the fundamental flaws in Australia’s tax systems and intergovernmental financial arrangements will provide a much-needed impetus to reopen areas of discussion that have long been relegated to the too-hard basket,” he said.

The pandemic had exacerbated two issues confronting policymakers, Mr Willox said.

One, the disparity between the revenue sources of Australian jurisdictions and their responsibilities for public expenditure; and, two, the inadequacy of the “flawed tax structure” to address the nat­ion’s deteriorating revenue base, which had been compounded by record fiscal stimulus spending during the pandemic.

“Our tax system needs to be more robust and more able to raise revenue without stifling our potential to improve living standards,” he said.

On Tuesday, Mr Perrottet flagged his willingness to tackle GST redistribution, which is up for review in 2025. “I’m not going to stand by and have NSW worse off because, whilst there might not be that much public interest in GST reform, it’s GST that pays for our schools and our hospitals and our nurses and our teachers and our police officers,” he said.

Scott Morrison moved quickly to allay WA concerns about changes to the current arrangements on Thursday, which he orchestrated as treasurer in 2018, saying “one person you can trust to keep a deal is the one who did the deal, and that’s me”.

“It’s not something I’m revisiting. I mean, I was serious. I believe WA wasn’t getting their fair share of the GST,” the Prime Minister told Perth radio station 6PR.

Mr McGowan, taking issue with Mr Perrottet’s comments, said his NSW counterpart’s financial performance as treasurer had been “appalling”, before claiming it was clear his “sights are set on undermining our revenue”.