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(Recast) Aust'n PM defends controversial proposed income tax changes

Xinhua, March 31, 2016 Adjust font size:

Australia's Prime Minister on Thursday defended proposed sweeping changes to the nation's income tax system, after concerns were raised that smaller states would be disadvantaged while larger states would get an "unfair" proportion of the tax money.

Talking to the Australian Broadcasting Corporation (ABC) a day after he announced the revolutionary plan to allow states to collect income tax instead of the federal government, Malcolm Turnbull said no state would be disadvantaged by the plan.

"A fundamental premise of any reform like this would be that the smaller states could not be disadvantaged," Turnbull said Thursday.

But Greens leader Richard Di Natale summed up the views of a number of concerned politicians when he said the natural progression of such reform would lead to states such as Tasmania, which has a population of fewer than 1 million people, raising income tax levels simply to pay for basic things such as infrastructure, schools and hospitals.

He said at the moment, the states all got a fair share of income tax for projects of most need in each state.

"It will lead to this competition between states to cut taxes and make the revenue problem worse," Di Natale said overnight.

"We'll get this dog breakfast of different tax scales.

"You will get smaller states like Tasmania and other states who will find it hard to simply raise the revenue they need to fund essential services."

The prime minister is set to further discuss the proposed income tax changes with state leaders at the Council of Australian Governments (COAG) meeting later on Thursday. Endit