Tax reform is the next big challenge. Everyone has an opinion. Business groups have been rallying hard to have their say, from the wine industry to start-ups. Whether you can please everyone is doubtful, but one thing is for sure: we need wide-ranging reforms and we need them now.

I’m reflecting on these issues as Adelaide celebrates our local entrepreneurs this week. How could we use tax reforms to help SA businesses flourish and to encourage more SMEs to want to set up here?

We’ve been promised tax reform at both a state and federal level but what should the objective be? To me, it’s easy: fairness, efficiency and competitiveness. We need a simple, competitive system that reduces the complexity of the tax system, making it easier to get on with running a successful business. Local government tax reform should also be put on the agenda as part of this process.

Most economists will tell you that broad-based taxes like the GST are efficient. They are argue that we would get more efficiency if GST was broadened, and exceptions were removed. We could have a very efficient and simple income tax system if every person in Australia paid, say, 20 per cent tax on their income. No marginal rates, no tax offsets or concessions. But is that fair?

It’s all a balancing act and a tax system needs to fair for both business and families.

This balancing act can scare people, especially politicians. But hard, unpopular choices sometimes need to be made. Tinkering round the edges by charging GST on $1,000 imports might satisfy Gerry Harvey, but is it really going to make a difference? People will still buy online and it’s arguably not going to make much difference to the budget.

We need to discuss which level of government provides which service. Reducing duplication will ensure that taxes are used more efficiently. The federal government has started to examine the reform of the Federation with a White Paper looking into these issues.

In South Australia, we desperately need to take a long, hard look at what is going to make us an economic powerhouse for the next 20 years.

Lots of people talk about industry incentives through tax breaks. Every group wants some concession or other. Perhaps we could consider a more uniform tax system including government grants and other mechanisms instead of tax concessions for key industries? For example, start up grants, low-interest loans and developing the crowd-sourced equity funding model that federal Small Business Minister Bruce Billson announced on Tuesday.

We need a system that finds a balance between fostering economic growth and caring for the community. We have to ensure we have money for our schools and hospitals and keep our infrastructure in good working order.

Having just started a business myself, I understand how hard all the paperwork is. Reducing complexity and making SA an easier and more competitive place to do business will go a long way toward encouraging a new wave of entrepreneurs to choose this state to set up shop.

Real tax reform is not going to be quick or easy.

Here in South Australia we should be looking at the mix of where our taxes should come from. Is it land-based, payroll-based, transaction-based or even income-based? Then within each type of tax that we decide to rely on, what is the simplest, fairest and most efficient way to collect that tax? Should Jack be paying the same land tax on an empty block worth $400,000 that he couldn’t yet afford to develop, while Jill pays the same on her block that she developed, making it now worth $2 million? Why is it that land tax is based on site value and not capital value? And if we changed that, couldn’t we reduce the land tax rate across the board? There are a thousand questions like that. Things that we can decide to do something about. If we want to …

We can do things better and that’s going to be a plus for all South Australians in coming years. We just need to sort it out and now is the right time to do it.

Andrea Michaels (formerly Melillo) is the Managing Partner of NDA Law and a specialist in tax law, family business and estate planning. She is chairman of the Commercial Law Committee of the Law Society of SA and chairman of the FBA State Advisor Committee. Andrea is also a member of the Tax Institute’s national Tax Reform Committee.