Think HBR


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The passing of the legislation for the partial lease of New South Wales’ power network will provide a much needed boost to the $20 billion Rebuilding NSW fund to build infrastructure across the state.
This one-off opportunity will provide the opportunity to boost economic growth across NSW and help strengthen the nation’s largest state economy.
The NSW Government believes that the Rebuilding Fund will boost the state economy by almost $300 billion in just over 20 years and create more than 120,000 new jobs.
A number of Hunter projects have been earmarked for funding. It is hoped that future decisions will be based on economic rather than political bases and that the Hunter will continue to receive additional funding to help grow Australia’s leading regional economy.
The fact that we need to raise funding for vital infrastructure funding by one-off events also reflects on the complications of Federal-State funding and the necessity to push forward with tax reform.
It appears close to impossible to come up with a formula for state funding that will be accepted as fair by all the states. After all each state is battling to receive a bigger share of the pie.
Unfortunately the state funding falls far short of meeting the funds required by each state and the shortfall must be made up by a variety of state taxes that on the whole are much less efficient are arguably more detrimental to economic activity than the larger Federal taxes.
The last real major tax reform – the introduction of GST in 2000 – did not achieve the desired reduction of these state taxes.
The nation is crying out for real tax reform. We have simply too many taxes and many that are too inefficient.
Whilst successive Governments, including the current Government, have funded reports and discussions on tax reform the much needed actions have not followed.
The Federal Government released a tax discussion paper Re:think, better tax systems, better Australia on 31 March. All those that are concerned with this topic should be aware of the issues discussed and also provide their feedback to help real tax reform to occur.
In the end, we also need a Government that has the political bravery to push forward with actions. It is a very difficult task but one that is vital if we are to improve our global competitiveness and reach our full economic potential.