Whereas many state taxes have high economic costs, the GST has a low economic cost. By virtue of its broad base, it does not encourage consumers to buy one product over another. Business recognises this is a difficult issue and that it poses significant political challenges; but just as the Howard Government forged ahead in 1998 and 2000, the states and Commonwealth must now acknowledge that the GST is the next step in the ongoing tax reform journey. Research undertaken by Deloitte Access Economics for the Finance Industry Council of Australia shows that abolishing state taxes and replacing them with a higher GST would leave consumers $16 billion, or 1.7 per cent, better off each year. The finance industry is one of many voices making the call for reform of state taxes. The business sector is united in its demand for state taxes and the GST to be on the agenda for national tax reform. The list is long and growing and includes the Business Council of Australia; the Finance Industry Council of Australia; the OECD, in its 2010 Economic Survey of Australia; the International Monetary Fund, in its 2010 review of Australia; CPA Australia; and Independent MP Tony Windsor. Now is not the time for business to be timid. The Henry Review has measured the problem. The costs and benefits are known. The solution is clear.

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