This submission highlights that the current system of GST distribution involves an overwhelming level of effort and complexity for a relatively low national return. It supports a system that better equips the federation to deal with 21st-century challenges through incentives for efficiency, and reform that brings about strong economic growth while addressing equity issues.
A number of options for reform are set out in the submission ranging from moving to an equal per capita distribution, to a partial equalisation approach or more limited reforms to the existing methodology.
Fundamental reform of the system of GST distribution is likely to be best achieved as part of comprehensive long-term tax reform that includes the reconfiguration of state tax bases so that the states have access to more efficient and stable revenue streams.
Read or download the Business Council of Australia Submission to the Treasury GST Distribution Review here.