Draft Report - Review of State Taxation - Report to Treasurer - 12 June 2008

The Commonwealth to raise more than 80 per cent of the total tax revenue collected in Australia – which is significantly more than it needs to meet its spending responsibilities.
In contrast, the States and Territories levy a greater number of taxes which have small and relatively narrow bases. Thus, States raise only a small portion of the total revenue they require to meet their expenditure responsibilities – which include funding essential public services such as health, education, policing, transport, welfare and environmental protection services. The Commonwealth shares some of the tax revenue it collects with the States, using a complex system of horizontal fiscal equalisation (HFE).
The Premier of NSW has asked the Independent Pricing and Regulatory Tribunal (IPART) to undertake a review of the impact of the current Commonwealth-State revenue sharing arrangements on NSW revenue, and the relative efficiency of the taxes NSW is able to levy.
This Draft Report discusses IPART’s findings and recommendations to the Treasurer on state government taxes and seeks feedback from interested parties in the form of written submissions.