2012-13 Government Mid-year Financial Projections Statement

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2012-13 Government Mid-year Financial Projections StatementTax Competitiveness: Provide a Fair and Efficient Tax System that isCompetitive with Other StatesThe Government seeks to provide a fair and efficient taxation system that is competitivewith other States and raises sufficient revenue to meet the infrastructure and servicedelivery needs of the Western Australian community. The competitiveness ofWestern Australia’s tax system can be assessed against a variety of criteria, including:tax revenue as a share of Gross State Product (GSP);tax revenue on a per capita basis; andtax ‘effort’ calculated from Commonwealth Grants Commission (CGC) data.TAX COMPETITIVENESSVarious MeasuresFigure 5TAX AS A SHARE OF GSP2012-13 (est)TAX PER CAPITA2012-13 (est)TAX EFFORT2010-11 (a)5Per cent3,500$120Index43213,0002,5002,0001,5001,000500100806040200WAOther States0WAOther States0WAOther States(a) Source: CGC. Tax effort refers to the level of tax actually raised in a State, divided by a State’s ‘standardised’ tax revenue(i.e. the level of tax revenue that the CGC estimates the State would have raised had it applied national average State taxrates). 2010-11 is the latest year for which data is available.Tax as a proportion of the economy (i.e. GSP) is an internationally recognised measure oftax competitiveness, which, unlike tax per capita, accounts for differences in the size andcomposition of the economic and revenue base in each jurisdiction. According to thismeasure, the tax burden in Western Australia is expected to be lower than the average ofother States in 2012-13 (3.3% compared to an average of 4.2% estimated for other States).52
Financial StrategyIn contrast, per capita tax revenue in Western Australia is expected to exceed the averageof other States in 2012-13. This mainly reflects the relative strength of the State’seconomic base (and hence its revenue raising capacity), rather than higher average taxrates.In this regard, and based on the latest available data compiled by the CGC,Western Australia’s tax ‘effort’ (i.e. its average tax rate) was 3.4% lower than the nationalaverage in 2010-11.Taken in aggregate, these outcomes are consistent with competitive tax policy settings inWestern Australia.53
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2012‐13GovernmentMid‐year Finan
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2012-13 Government Mid-year Financi
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ForewordThis Government Mid-year Fi
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2012-13 Government Mid-year Financial Projections Statement

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