Flat White

Labor’s Uber tax shows the West is closed for business

17 November 2017

4:20 PM

17 November 2017

4:20 PM

New technology has undoubtedly changed the way we get around our major cities. Since ridesharing first came on the scene three years ago, we’ve seen around half a million passengers choose to ride around Perth with apps like Uber, Shofer and GoCatch.

They’ve chosen to rideshare because that mode of transport best reflects their busy and digitally-connected lifestyles and because it gets them where they need to go, without any of the traditional hassles of catching a taxi.

State governments have played a big role in the popularity of ridesharing. There’s no doubt that the existing taxi industry has been hamstrung by needless red tape.

Red tape that created an industry focused on propping up the value of taxi licences and keeping out competition rather than improving customer service. And it looks like Mark McGowan’s Labor government is about to repeat the mistakes of the past.

Passengers in Perth will be slugged with a new 10 per cent tax on fares to fund taxi licence investors. This will be the highest tax of its kind in Australia and it will cost consumers around $2.00 dollars per ride.

The government is trying to spin the line that the industry can absorb the cost. This flies in the face of commercial reality, particularly when Western Australia has the highest costs of licensing for industry in Australia. It shows they just don’t understand how business works.

The government is asking you to pay for the repair of bad laws that it created and benefitted from. It is an unprincipled approach to reform that practically says Western Australia is closed to new ideas.

The Uber tax also raises unsettling questions about transparency. It’s the third time, by my count, that the Premier has broken his promise not to introduce or raise taxes.

Exactly who receives this compensation remains unknown. Some estimates say that as few as eight per cent per cent of taxi plate owners actually drive one.

And unlike other states, there is no plan to limit compensation to small operators, meaning companies who profit from the power of monopoly will likely get your money.

In its first innovation test, the McGowan government has caved to vested interests instead of supporting jobs, growth and opportunity. This sends a worrying message to businesses seeking to invest in Western Australia.

Taxify, a competitor to Uber from overseas, recently announced their intention to launch in Sydney before Christmas, followed by Melbourne and Brisbane in the New Year. Perth didn’t make the list, and it’s little wonder why. We’re turning investors off, and we’re missing out on new sources of revenue and jobs as a result.

Western Australia is at a critical point. Government should be fostering innovation instead of punishing it. This should be common sense for a government that has placed job creation and budget repair at the top of its agenda.

Aaron Stonehouse is the Member for South Metropolitan Region for Liberal Democrats WA.

Got something to add? Join the discussion and comment below.

Got something to add? Join the discussion and comment below.

Show comments