Federalism is no doubt a wonderful thing in many respects except, that is, when it generates a complex web of State and Territory taxes which serve no useful purpose beyond enabling States and Territories to engage in some sort of fiscal competition, a sort of “mine is smaller than yours” mentality, while playing lip service to co-operation.

Consistent with its aims and areas of research, ELRI has identified two major problems in Australia’s tax system:

• the lack of standardisation of State and Territories tax laws; and
• the lack of a central administration of those laws.

These problems are:

• adding to the costs of doing business in Australia;
• making Australia less attractive to overseas investors;
• affecting Australia’s international competitiveness in trade;
• adversely affecting Australia’s GDP;
• undermining budget efficiencies for the States and Territories.

The solution lies in:

• implementing the formation of an entity similar to the Multistate Tax Commission (MTC) in the US to achieve a co-operative, shared responsibility for the administration of those taxes, particularly a one stop shop system;
• move to standard tax legislation under the guidance of that new entity.