Business SA wants GST changes

The federal government should restructure the GST to allow for the abolition of payroll tax and cuts to company and personal income tax, Business SA says.

In a response to the tax white paper, it recognises that governments need adequate funding to deliver essential services but says this revenue should be raised through taxes which least restrict economic growth, such as the GST.

"While replacing stamp duty with land tax can be achieved at a state level, the federal government must lead the states on GST reform to enable the additional revenue recovery required to abolish payroll tax," Business SA's director of policy Rick Cairney says.

Business SA says it supports in principle increasing the GST in two 2.5 per cent increments to 15 per cent.

It says the impact of extending the GST to include health, food and education should also be examined and has proposed reducing company tax to 25 per cent to ensure Australia remains an attractive destination for global investment.

"Considering the majority of businesses are actually leveraged off property, we need the tax system to support individuals who take risks to create jobs," Mr Cairney said.

"Tax reform was a once-in-a-generation opportunity and considering SA's current economic malaise and the challenges we face beyond auto-manufacturing, it is certainly not one we can afford to squander."