Call for tax on family home

Call for tax on family home

The family home would be subject to land tax and motorists should be charged to enter Perth's CBD during peak hours under recommendations of the Economic Regulation Authority's landmark report into microeconomic reform.

The 476-page report, released by the State Government yesterday, advocates tax reforms that could lead to stamp duty on residential property being abolished.

The ERA says exemptions and concessions on land tax could be axed and the rate increased to raise enough revenue to replace stamp duty, which it argues is a drag on the economy.

It also argues for ending the payroll tax exemption for businesses with a payroll of less than $800,000.

Or, the base for land tax, payroll tax and stamp duty could be broadened and their rates lowered.

Under WA's tax law, principal places of residence, aged-care facilities, agricultural land, crown land and land owned by religious, charitable or education institutions are exempt from tax.

The report advocates user-pay principles in a range of policy areas, including roads and electricity, and calls for sweeping deregulation of retail trading hours, taxis and potato-growing.

The ERA says the Government should test a congestion charge for vehicles entering the CBD during the morning and afternoon peak.

Households and small business should pay electricity tariffs that reflect the cost of production and distribution and the Government should investigate time-of-use and variable peak power pricing, which would have consumers paying higher prices during high demand, such as on hot summer days.

The report calls for more involvement of the private sector in taxpayer-funded infrastructure projects, which it says should be subject to rigorous and public cost-benefit analyses.

The report also says there must be tighter scrutiny of Royalties for Regions spending, including "proactive" management of the program's $1 billion annual spending limit.

The ERA says retail trading hours restrictions should be removed except for Christmas Day, Good Friday and Anzac Day morning.

Restrictions on the number of taxi plates should go, as should regulations - such as the $60 minimum fare - stopping small charter vehicles from competing with taxis. And the Potato Marketing Board should be scrapped.

Finance Minister Dean Nalder ruled out changes to Royalties for Regions.

He said the Government would not follow the report's recommendations to divest housing lender Keystart and abolish the State's domestic gas reservation policy, which requires proponents of new gas projects to set aside 15 per cent of reserves to supply the WA domestic market.