CANBERRA: The Federal Government is currently releasing discussion papers on the performance of our federal system of government and on our taxation system across the board.
There have been several attempts in the past to address these issues as Australia has changed quite dramatically since 1901 with a population of now some 23million and with population growth supplemented with 50 per cent immigration, mainly from Asia.
The GFC of a few years ago set the scene for the need to review the way we operate and the reasons for needing a review and it is at a time that other countries around the world are reviewing their processes.
Australia’s form of Federalism, which gives specific powers to the Federal Government and the residue to the states and which does not recognise Local Government, is today proving to be inefficient in the way it has evolved and operates.
The High Court of Australia has over a period of time broadened the Federal Government’s powers to cater for a changing world and this combined with the states handing over their taxation powers for income tax has led to an imbalance of control, responsibility, and funding for Australia generally.
There are no clear lines of responsibility between state and federal governments in some areas such as health, education, transport etc. and there is duplication of costs with both levels of government handling the same issues to the tune of about $9billion a year, which would be unnecessary if there were definite layers of responsibility without one level of government overseeing the other.
The Federal Government collects taxes in the form of customs and excise, personal income tax, company tax, GST, superannuation tax and other sundry taxes.
The State Governments supplement what they receive from the distribution of federal taxes with payroll tax, land tax, stamp duty, a partial rebate of GST, motor vehicle and insurance taxes and other sundry taxes.
