Prime Minister Kevin Rudd’s commitment to cut red tape will be put to the test for the first time at a Council of Australian Government’s meeting to be held on Thursday.
State premiers are reportedly planning to lodge a submission with Rudd that argues they should not be forced to abolish stamp duty on business transactions. Stamp duty is the only tax remaining out of six taxes the states promised to review in exchange for a big slice of GST revenue in 1999.
But while the states argue it would be economically irresponsible to force them to abolish the lucrative tax on business transactions – residential property stamp duty would remain – there would be high red-tape costs from failing to do so because of the high cost of administering stamp duty and inconsistencies between regimes in different states.
Rudd plans to use Thursday’s COAG meeting to kick off a range of policy initiatives he promised during the election and which require the co-operation of the states to implement.
Labor promises to put computers in every school, create a single body responsible for infrastructure, and to provide payments to cut hospital optional surgery waiting lists will be high on the agenda.