The unions representing state employees throughout Australia are working together to develop a tax policy better suited to the modern era.

“The Australian Government and state governments have a revenue problem after decades of tax cuts for both income tax and company taxes,” said Shay Deguara, National Industrial and Research Officer with the CPSU SPSF. “States and territories are now reliant upon Commonwealth funding for between 40 per cent to 80 per cent of their spending.

“Unless there are measures to broaden the taxation system, to reduce leaks such as loopholes and carve outs for particular industries, governments will continue to maintain austerity budgets cutting our members jobs, the services they deliver and also putting downward pressure on members’ wages and conditions.”

The CPSU had reviewed a number of policy documents from progressive think tanks and produced a Taxation Discussion Paper.

“The taxation system is broken,” said Mr Deguara. “We are not raising enough revenue to pay for our basic public services and public infrastructure. Loopholes, vested interest groups and corporate breaks are seeing the taxation burden increase on working people, whilst the owners of capital and wealth are able to use clever accounting methods to avoid contributing their fare-share of their increasing profits to contribute to the public services and public infrastructure that maintain our community.

“This depletion of tax revenue has led to state dependency on a range of poorly designed taxes that have poor socio-economic results. These include taxation on gambling, making states reluctant to take on reform of poker machines, as well as horse and greyhound racing.

“Taxation such as stamp duty remains on property transfers and building levies, increasing housing prices, and payroll tax makes direct employment of workers less preferable.”

Possible adjustments include increasing the level of Goods and Services Tax, increasing company taxes or introducing taxes on digital transaction and resources such as minerals and petroleum.

“There is global momentum on wealth taxes, which can be an important source of revenue,” said Mr Deguara. “More crucially, wealth taxes could help tackle growing financial and political inequality, concentration of economic power, and restore the integrity of the tax system.”

He said governments also need to look at negative gearing, which simultaneously reduces the tax base and increases property prices. “

‘Commonwealth Treasury and at least two states have been discussing a road user charge,” said Mr Deguara. “This is because with the growing electric car fleet, less fuel excise will be paid and therefore theoretically less money will be provided to pay for road improvements and maintenance.

“Ninety-seven per cent of the vehicle fleet is expected to be electric by 2050.”