Abbott: GST is back on the table

Date
    May 18, 2013


Tony Abbott has revealed the goods and services tax could be included in a full review of the tax system if the Coalition is elected, raising the prospect the 10 per cent rate could be lifted or the tax broadened to include food, education and health services.      :o

The decision to review the controversial tax, which Labor ducked with its Henry tax review in 2008, will likely invite a ferocious scare campaign from the government in the run-up to the September 14 election.

Within hours of Mr Abbott revealing the scope of his proposed taxation white paper, the government went on the warpath, with Prime Minister Julia Gillard warning of an expanded GST and ''all of the cost of living problems that that would give Australian families''.

But Mr Abbott vowed any changes to the taxation system, including the GST, would be introduced only after they were taken to voters.


''Anything we might do arising from our white paper we would seek a mandate for, not at this election but at the election after,'' Mr Abbott told ABC radio.

The combined impact of exemptions from the GST negotiated at the time of its introduction is $22.85 billion a year in forgone revenue. The exemptions also make the tax more complex to administer, although they do make it less painful, especially for those on lower incomes.

Faced with a difficult fiscal situation made worse by unfunded promises, Mr Abbott has hosed down expectations of lower business taxes under a Coalition government to offset his paid parental leave scheme.

A previously promised 1.5 percentage point cut in company tax at the last election is now merely a pledge to ''strive for a modest company tax cut'' in the first term.

Undertaking his own version of the budget hard-sell after his official reply speech on Thursday evening, the Opposition Leader reaffirmed his commitment to slow the ramp-up to the 12 per cent superannuation guarantee by two years, and to commission a comprehensive white paper on taxation.      :(

''There will be a widespread chance to contribute,'' he said of the public-consultation approach to be followed. ''We certainly don't want to squib this process the way the government did with the Henry review.''

Asked subsequently to clarify if the GST was on the table or not, he said: ''We will have a comprehensive debate about tax reform [but] we haven't even won a first term, let alone a second term.

''Who knows what people might put up to us - then we will have a white paper, informed by the best expertise the Commonwealth can muster in the wake of that consultation, and if there were to be any changes in the second term, we'll seek a mandate for them.''

The government also argued the proposed two-year delay in the delivery of 12 per cent superannuation under a Coalition government was merely a forerunner to a complete abandonment of the shift up from 9 per cent, due to begin from this July.      :(

It says the effect of the slowdown would reduce the average 30-year-old worker's retirement pool by $20,000, but staying with the 9 per cent rate would cost the same worker $127,000.

The burgeoning hip-pocket debate comes as a new survey found Mr Abbott had surpassed Ms Gillard in overall mentions across electronic media as he casts off his ''Dr No'' tag by backing government decisions.

A nationwide analysis of talk-back radio and the micro-blog site Twitter has found there is a renewed public interest in policy since the election date was announced in February.

The iSentia survey suggests Mr Abbott's decision to fully back the national disability insurance scheme DisabilityCare, including an increase to the Medicare levy to help fund it, may have impressed voters.

John Chalmers, iSentia's group communications manager, said the Opposition Leader now appears to be getting as much credit for the landmark socio-economic program as the government.

''Overall, it seems likely that the NDIS is playing just as well for Abbott as Gillard … and any policy it makes from now on, unless it's strongly opposed by Abbott, will be seen just as much his as hers,'' Mr Chalmers told Fairfax Media.

Read more: http://www.smh.com.au/opinion/political-news/abbott-gst-is-back-on-the-table-20130517-2js0b.html#ixzz2TaNMFJ2K

imcrookonit

No idea why you bring up garbage like this, the theory of broad-based taxes is to simply taxation as pure revenue raising as opposed to the ALP trying to tax everything.

They are doing it by stealth with the medicare levy which is meant to be a short term measure.

As long as they removed the medicare levy and other taxes (more reform) I have no problem with the theory of ramping up and down the GST to ensure a more stable revenue base for the government. What we actually have right now is tax revenue growth so any argument for adjusting the GST is bogus.

I have a problem with the practical side and a government would need a solid argument, not just a panic measure in playing with the GST rate like a potential future ALP government would do if the idea was toyed around.

crook, do you just sit around your house all day thinking up questions for "mr abbott' 

its a saturday, go and earn some penalty rates at time and a half.

you might as well make the most of it for the next few months ;)

aquascoot wrote on May 18^th, 2013 at 7:14am:

crook, do you just sit around your house all day thinking up questions for "mr abbott'  its a saturday, go and earn some penalty rates at time and a half. you might as well make the most of it for the next few months ;)

aquascoot

What is obvious now is even the rusted ons have accepted that the ALP are going to lose the election and they are hatching together a large catalog of issues to say "I told you so BS" for when Abbott is in power. Build up a big enough catalog and they may win the "I told you so" lotto..... I think that is theory.

My observation so far is that everyone of his critics from retarded morons like Marr to even his softest critics and supporters ....... have all underestimated him.

RightSadFred wrote on May 18^th, 2013 at 7:13am:

imcrookonit No idea why you bring up garbage like this, the theory of broad-based taxes is to simply taxation as pure revenue raising as opposed to the ALP trying to tax everything. They are doing it by stealth with the medicare levy which is meant to be a short term measure. As long as they removed the medicare levy and other taxes (more reform) I have no problem with the theory of ramping up and down the GST to ensure a more stable revenue base for the government. What we actually have right now is tax revenue growth so any argument for adjusting the GST is bogus. I have a problem with the practical side and a government would need a solid argument, not just a panic measure in playing with the GST rate like a potential future ALP government would do if the idea was toyed around.

the theory of broad-based taxes is to simply taxation as pure revenue raising as opposed to the ALP trying to tax everything.

I think we have a winner ????

A tax is revenue raising - who would have thought ????

Defending the GST - a tax on everything against other taxes because they are taxes on everything ???

I suspect that fred meant something by this comment but I have no idea about what it was.

RightSadFred wrote on May 18^th, 2013 at 7:19am:

aquascoot wrote on May 18th, 2013 at 7:14am: crook, do you just sit around your house all day thinking up questions for "mr abbott'  its a saturday, go and earn some penalty rates at time and a half. you might as well make the most of it for the next few months ;) aquascoot What is obvious now is even the rusted ons have accepted that the ALP are going to lose the election and they are hatching together a large catalog of issues to say "I told you so BS" for when Abbott is in power. Build up a big enough catalog and they may win the "I told you so" lotto..... I think that is theory. My observation so far is that everyone of his critics from retarded morons like Marr to even his softest critics and supporters ....... have all underestimated him.

actually even the mention of that guys name nearly made me bring my breakfast up.

if you want the EPITOME of everything that is wrong with australai today , just watch that smug, superior f wit talk.  makes my blood boil. >:( >:(

RightSadFred wrote on May 18^th, 2013 at 7:13am:

imcrookonit No idea why you bring up garbage like this, the theory of broad-based taxes is to simply taxation as pure revenue raising as opposed to the ALP trying to tax everything. They are doing it by stealth with the medicare levy which is meant to be a short term measure. As long as they removed the medicare levy and other taxes (more reform) I have no problem with the theory of ramping up and down the GST to ensure a more stable revenue base for the government. What we actually have right now is tax revenue growth so any argument for adjusting the GST is bogus. I have a problem with the practical side and a government would need a solid argument, not just a panic measure in playing with the GST rate like a potential future ALP government would do if the idea was toyed around.

I have a problem with the practical side and a government would need a solid argument, not just a panic measure in playing with the GST rate like a potential future ALP government would do if the idea was toyed around.

You know that the liberals have been the only group to talk about raising the GST? They already raised it by 10% you understand.

Dnarever

So is Beazley going to come back and roll back the GST ?

Your ignorance is stunning, Keating was the first PM to suggest the idea and the ALP have had 5 years to remove this tax reform.

aquascoot

They guy does not bother me at all, once I think your a retarded moron like Flannery I know everything you say is garbage.

Your wasting emotion on grubs like these.

Personally I think the GST should be increased to 15% and expanded to all goods and services including fresh food.
As it stands PAYE taxpayers carry a much greater tax burden than the rest of the population so their tax should be reduced in line with the GST increases and to bring house prices down which again would take a huge burden off the average working Aussie family negative gearing should be scrapped.
Sadly these days both major parties are gutless when it comes to real reform so all we will see is some tinkering around the edges.

Dnarever wrote on May 18^th, 2013 at 7:54am:

RightSadFred wrote on May 18th, 2013 at 7:13am: imcrookonit No idea why you bring up garbage like this, the theory of broad-based taxes is to simply taxation as pure revenue raising as opposed to the ALP trying to tax everything. They are doing it by stealth with the medicare levy which is meant to be a short term measure. As long as they removed the medicare levy and other taxes (more reform) I have no problem with the theory of ramping up and down the GST to ensure a more stable revenue base for the government. What we actually have right now is tax revenue growth so any argument for adjusting the GST is bogus. I have a problem with the practical side and a government would need a solid argument, not just a panic measure in playing with the GST rate like a potential future ALP government would do if the idea was toyed around. the theory of broad-based taxes is to simply taxation as pure revenue raising as opposed to the ALP trying to tax everything. I think we have a winner ???? A tax is revenue raising - who would have thought ???? Defending the GST - a tax on everything against other taxes because they are taxes on everything ??? I suspect that fred meant something by this comment but I have no idea about what it was.

Now your just being a plain grub, if your going quote me do it properly.

RightSadFred wrote on May 18^th, 2013 at 8:12am:

Dnarever So is Beazley going to come back and roll back the GST ? Your ignorance is stunning, Keating was the first PM to suggest the idea and the ALP have had 5 years to remove this tax reform.

Keating was the Treasurer when he suggested a goods and services tax and Howard who was in opposition said it would be the end of the civilised world if we implemented one. So all that proves is both parties will lie through their teeth when it suits them.

The GST is already on Food.

RightSadFred wrote on May 18^th, 2013 at 8:16am:

Dnarever wrote on May 18th, 2013 at 7:54am: RightSadFred wrote on May 18th, 2013 at 7:13am: imcrookonit No idea why you bring up garbage like this, the theory of broad-based taxes is to simply taxation as pure revenue raising as opposed to the ALP trying to tax everything. They are doing it by stealth with the medicare levy which is meant to be a short term measure. As long as they removed the medicare levy and other taxes (more reform) I have no problem with the theory of ramping up and down the GST to ensure a more stable revenue base for the government. What we actually have right now is tax revenue growth so any argument for adjusting the GST is bogus. I have a problem with the practical side and a government would need a solid argument, not just a panic measure in playing with the GST rate like a potential future ALP government would do if the idea was toyed around. the theory of broad-based taxes is to simply taxation as pure revenue raising as opposed to the ALP trying to tax everything. I think we have a winner ???? A tax is revenue raising - who would have thought ???? Defending the GST - a tax on everything against other taxes because they are taxes on everything ??? I suspect that fred meant something by this comment but I have no idea about what it was. Now your just being a plain grub, if your going quote me do it properly.

Sorry but your whole post is included  - all of the context is there ?????

I isolated the statement that I was commenting about it wasn't meant to interfere with the meaning or context or to misrepresent it in any way, just bad luck that it made no sense.

adelcrow wrote on May 18^th, 2013 at 8:18am:

RightSadFred wrote on May 18th, 2013 at 8:12am: Dnarever So is Beazley going to come back and roll back the GST ? Your ignorance is stunning, Keating was the first PM to suggest the idea and the ALP have had 5 years to remove this tax reform. Keating was the Treasurer when he suggested a goods and services tax and Howard who was in opposition said it would be the end of the civilised world if we implemented one. So all that proves is both parties will lie through their teeth when it suits them.

Rewriting history again crow?


In 1985, Keating championed the introduction of a broad-based consumption tax, similar to the goods and services tax (GST) of the Howard government.[11][12] During the 1984 election campaign, Hawke had promised a policy paper on taxation reform to be discussed with all stakeholders at a tax summit. Three options - A, B and C - were presented in the Draft White Paper, with Keating and his Treasury colleagues fiercely advocating for Option C, which included a consumption tax of 15% on goods and services along with reductions in personal and company income tax, a fringe benefits tax and a capital gains tax. Although Keating was able to win the support of a reluctant cabinet, in the face of opposition from the public, the welfare lobby, the ACTU, and the business community, Hawke intervened to drop the consumption tax. Many of the remainder of the reforms were adopted in the September 1985 tax reform package, but the loss of the consumption tax was a bitter defeat for Keating. However, he joked about it at the press conference saying, "It's a bit like Ben Hur. We've crossed the line with one wheel off, but we have crossed the line."

http://en.wikipedia.org/wiki/Paul_Keating

In an interview with News Ltd, Mr Hawke, who was PM from 1983 to 1991, said he had no regrets about killing off Mr Keating's preferred tax plan, a move many view as a turning point in their relationship that later soured.
But he said the level of today's consumption tax - the 10 per cent GST - "should be open for discussion".

http://www.news.com.au/national-news/cabinet-papers-released-reveal-hawke-keating-gst-debate/story-fncynjr2-1226545856392#ixzz2TakGBTLq

warrigal wrote on May 18^th, 2013 at 8:23am:

The GST is already on Food.

Not fresh uncooked food

warrigal wrote on May 18^th, 2013 at 8:23am:

The GST is already on Food.

Not all food.

There should also be an alcohol/tobacco type excise on all junk food and that excise should be doubled so it could then be used to ease the burden these poisons put on our health system.
The AMA can give us their list of what they consider to be junk food so the definition is clear.

RightSadFred wrote on May 18^th, 2013 at 8:12am:

Dnarever So is Beazley going to come back and roll back the GST ? Your ignorance is stunning, Keating was the first PM to suggest the idea and the ALP have had 5 years to remove this tax reform.

As pointed out Keating was treasurer and also Howard as treasurer in the Fraser government had pushed hard for a GST in the 70's.

Doing anything to change the GST was removed from Labor policy in 2004.

I am not suggesting anything on the GST just stating some fact.

The Liberals did introduce it and they are the only party to talk about increasing it, they are the most likely to increase it.

I personally do not think that they will. Just a re-run of the scare campaign the Libs tried in 2007.

This is not needed the Libs will actually do enough terrible things that this sort of rubbish is counter productive, it muddies the water on the things really worth worrying about.

Australian GST should be increased to 15-20% with an offset reduction in direct taxation.

The economics of that argument have always stood up for me.

Dnarever wrote on May 18^th, 2013 at 8:51am:

RightSadFred wrote on May 18th, 2013 at 8:12am: Dnarever So is Beazley going to come back and roll back the GST ? Your ignorance is stunning, Keating was the first PM to suggest the idea and the ALP have had 5 years to remove this tax reform. As pointed out Keating was treasurer and also Howard as treasurer in the Fraser government had pushed hard for a GST in the 70's. Doing anything to change the GST was removed from Labor policy in 2004. I am not suggesting anything on the GST just stating some fact. The Liberals did introduce it and they are the only party to talk about increasing it, they are the most likely to increase it. I personally do not think that they will. Just a re-run of the scare campaign the Libs tried in 2007. This is not needed the Libs will actually do enough terrible things that this sort of rubbish is counter productive, it muddies the water on the things really worth worrying about.

Miss this bit dna?


Quote:

In an interview with News Ltd, Mr Hawke, who was PM from 1983 to 1991, said he had no regrets about killing off Mr Keating's preferred tax plan, a move many view as a turning point in their relationship that later soured. But he said the level of today's consumption tax - the 10 per cent GST - "should be open for discussion".

Andrei.Hicks wrote on May 18^th, 2013 at 8:53am:

Australian GST should be increased to 15-20% with an offset reduction in direct taxation. The economics of that argument have always stood up for me.

Andrei.Hicks

I think you also mean indirect tax too.

The GST is a broad based tax and the theory is about simplification.

Once the overall taxation is simplified, ratcheting up and down a GST will be far more effective.

Politically it was a huge sell getting the GST in in the first place, raising the GST will have a lot of political pain without a great deal of gain, can not see it happening in the near future.

KJT1981 wrote on May 18^th, 2013 at 8:55am:

Dnarever wrote on May 18th, 2013 at 8:51am: RightSadFred wrote on May 18th, 2013 at 8:12am: Dnarever So is Beazley going to come back and roll back the GST ? Your ignorance is stunning, Keating was the first PM to suggest the idea and the ALP have had 5 years to remove this tax reform. As pointed out Keating was treasurer and also Howard as treasurer in the Fraser government had pushed hard for a GST in the 70's. Doing anything to change the GST was removed from Labor policy in 2004. I am not suggesting anything on the GST just stating some fact. The Liberals did introduce it and they are the only party to talk about increasing it, they are the most likely to increase it. I personally do not think that they will. Just a re-run of the scare campaign the Libs tried in 2007. This is not needed the Libs will actually do enough terrible things that this sort of rubbish is counter productive, it muddies the water on the things really worth worrying about. Miss this bit dna? Quote: In an interview with News Ltd, Mr Hawke, who was PM from 1983 to 1991, said he had no regrets about killing off Mr Keating's preferred tax plan, a move many view as a turning point in their relationship that later soured. But he said the level of today's consumption tax - the 10 per cent GST - "should be open for discussion".

Is that meant to mean anything relivent. The thoughts of a man who has not been in government for 20 years?

This is nothing like Peter Costello saying it while he was the current Treasurer.

I personally do not have a solid position on if they should look at it or not. The balance is the worry about the dangers of making change in this area against the fact that the problem with our financial gearing created by Costello and Howard desperatly needs to be fixed.

Hawke.
Pisshead sellout prick.

RightSadFred wrote on May 18^th, 2013 at 9:01am:

Andrei.Hicks wrote on May 18th, 2013 at 8:53am: Australian GST should be increased to 15-20% with an offset reduction in direct taxation. The economics of that argument have always stood up for me. Andrei.Hicks I think you also mean indirect tax too. The GST is a broad based tax and the theory is about simplification. Once the overall taxation is simplified, ratcheting up and down a GST will be far more effective. Politically it was a huge sell getting the GST in in the first place, raising the GST will have a lot of political pain without a great deal of gain, can not see it happening in the near future.

I agree with some of this. The logistic problems are surmountable - like all the GST going to the states etc.

The bigger issue is probably that the GST is a regressive tax which has a significantly greater impact on the poor while removing taxes which impact the wealthier to a greater extent. In some ways the raft of taxes we have while a nightmare in many ways does provide a fairer balance for overall.

You can't have a 10% sales tax and a top rate of 47% of direct tax.

You need 20% sales tax and top rate of 40%.

Right now it's uncompetitive with other world markets on top tier employment.

I would never return to Australia under its current tax system.

Andrei.Hicks wrote on May 18^th, 2013 at 9:16am:

You can't have a 10% sales tax and a top rate of 47% of direct tax. You need 20% sales tax and top rate of 40%. Right now it's uncompetitive with other world markets on top tier employment. I would never return to Australia under its current tax system.

We don't have any sales tax in Australia.

I would never return to Australia under its current tax system

Good.

RightSadFred wrote on May 18^th, 2013 at 9:01am:

Andrei.Hicks wrote on May 18th, 2013 at 8:53am: Australian GST should be increased to 15-20% with an offset reduction in direct taxation. The economics of that argument have always stood up for me. Andrei.Hicks I think you also mean indirect tax too. The GST is a broad based tax and the theory is about simplification. Once the overall taxation is simplified, ratcheting up and down a GST will be far more effective. Politically it was a huge sell getting the GST in in the first place, raising the GST will have a lot of political pain without a great deal of gain, can not see it happening in the near future.

The GST needs to be increased if Govt services are to be maintained or improved.

The burden of 'direct' taxation is falling upon fewer individual taxpayers due to the aging of the population.

One of the main reasons for introducing a broad based GST was to counter the aging of the population.

As the baby boomers retire and lots of them cease paying tax and start collecting welfare there will be less tax payers as a proportion of the population to pay the bills.

Simple, but any increase in the rate of GST will be howled down by the very people that want the unsustainable increases in spending for education health and disability care such as Mr Crook....

Swagman wrote on May 18^th, 2013 at 4:47pm:

RightSadFred wrote on May 18th, 2013 at 9:01am: Andrei.Hicks wrote on May 18th, 2013 at 8:53am: Australian GST should be increased to 15-20% with an offset reduction in direct taxation. The economics of that argument have always stood up for me. Andrei.Hicks I think you also mean indirect tax too. The GST is a broad based tax and the theory is about simplification. Once the overall taxation is simplified, ratcheting up and down a GST will be far more effective. Politically it was a huge sell getting the GST in in the first place, raising the GST will have a lot of political pain without a great deal of gain, can not see it happening in the near future. The GST needs to be increased if Govt services are to be maintained or improved. The burden of 'direct' taxation is falling upon fewer individual taxpayers due to the aging of the population. One of the main reasons for introducing a broad based GST was to counter the aging of the population. As the baby boomers retire and lots of them cease paying tax and start collecting welfare there will be less tax payers as a proportion of the population to pay the bills. Simple, but any increase in the rate of GST will be howled down by the very people that want the unsustainable increases in spending for education health and disability care such as Mr Crook....

The burden of 'direct' taxation is falling upon fewer individual taxpayers due to the aging of the population.

In other words we need to keep high wage earners and billion dollar business taxes low by taxing pensioners and the unemployed more.

Dnarever wrote on May 18^th, 2013 at 5:12pm:

In other words we need to keep high wage earners and billion dollar business taxes low by taxing pensioners and the unemployed more

No you tax everyone across the board a little bit instead of fleecing a shrinking minority to feed a growing majority.

No ones saying that personal tax will be abolished.

The difference here is that in good Liberal tradition, any changes to the GST will be taken to an election which is precisely how it should be done if the changes are anything other than minor.  I would prefer a 15% GSt with no exemptions and the removal of all state taxes and levies including payroll tax and stamp duty. there should be a reduction in personal income tax and a small reduction in company tax.

The more you earn the better something like the GST is for you - unless of course, you're blowing your entire pay packet each month on goods and services.

It's a tax that's felt more the less income you have.

Life_goes_on wrote on May 18^th, 2013 at 5:32pm:

The more you earn the better something like the GST is for you - unless of course, you're blowing your entire pay packet each month on goods and services. It's a tax that's felt more the less income you have.

even a cursory understanding of society would tell you that the more you earn, the more you spend. and the more you spend, the more GST you pay. bottom line: the GST is still paid predominantly by middle and upper income earners.

20% GST
40% top rate of tax

Cut social spending
Cut foreign aid
Slim down unemployment welfare

Would get my vote

Life_goes_on wrote on May 18^th, 2013 at 5:32pm:

The more you earn the better something like the GST is for you - unless of course, you're blowing your entire pay packet each month on goods and services. It's a tax that's felt more the less income you have.

That's the typical argument.  It's bad for the down trodden because (shock horror) they have to make a contribution to the cost of Government.

The more you earn the more you spend and the more GST you pay. 

It also collects tax from the cash economy, from tourists, from drug dealers etc etc.

More tax revenues means people on low incomes and welfare can enjoy better essential Government services such as health education and disability care.

The majority of economies effected by an aging population have some sort of GST.

Finland is a good comparison to Aust.  Cheap high quality universities and universal health care paid for with a VAT of around 24%  :o and comparable marginal personal tax rates as Australia.

That STUPID argument about regressiveness has bitten lefties on the arse big time in Australia.  We have forgone 50% additional GST reveues for the last 20 years because of stupid Keating's GST scare campaign in 1993.

What would the health and education and disability care sectors have done with 20 years of 50% more GST revenues huh?????? :( :(

Labor will not increase GST: Shorten.      :)

Date
    May 18, 2013


Bill Shorten has vowed that Labor will keep its hands off the goods and service tax, following revelations that Tony Abbott could include the GST in a review of the tax system if the Coalition is elected.    

The issue is looming as a major battleground in the lead up to September’s election.

Mr Shorten, the Minister for Financial Services and Superannuation, said on Saturday that Labor will not increase the GST.      

He said Labor favoured a mining tax rather than slugging ‘‘mums and dads’’ with a GST increase.      :)


‘‘If Tony Abbott was elected he would give money back to the world’s richest mining companies, but he is saying to the mums and dads doing their shopping on a Saturday, ‘I want you to pay more for tax’. These are crazy priorities.      :(

‘‘The Liberals are saying vote for us, give us a blank cheque, we’ll set up a number of committees and then we will work out different ways for mum and dad to pay more money ...

‘‘I think a mining tax makes more sense than a GST (increase) and I think putting a price on carbon pollution makes more sense than GST.

‘‘Tony Abbott, you do not need to increase the GST, just make sure mining companies pay their fair share. It’s fairly simple.’’

Mr Abbott has said that any changes to the taxation system, including the GST, would be taken to voters before being implemented.

Mr Shorten also attacked the Liberal proposal to delay superannuation increases.

‘‘Superannuation should be a political no go zone, it should be a safe haven and not subject to new taxes.’’

He said that under the Liberal proposal 8.5 million Australians would have less money in their super when they retire.      :(

Read more: http://www.theage.com.au/opinion/political-news/labor-will-not-increase-gst-shorten-20130518-2jszk.html#ixzz2TdCdSpRX

wrote on May 18^th, 2013 at 6:39pm:

Labor will not increase GST: Shorten.      :) Date     May 18, 2013 Bill Shorten has vowed that Labor will keep its hands off the goods and service tax, following revelations that Tony Abbott could include the GST in a review of the tax system if the Coalition is elected.     The issue is looming as a major battleground in the lead up to September’s election. Mr Shorten, the Minister for Financial Services and Superannuation, said on Saturday that Labor will not increase the GST.       He said Labor favoured a mining tax rather than slugging ‘‘mums and dads’’ with a GST increase.      :) ‘‘If Tony Abbott was elected he would give money back to the world’s richest mining companies, but he is saying to the mums and dads doing their shopping on a Saturday, ‘I want you to pay more for tax’. These are crazy priorities.      :( ‘‘The Liberals are saying vote for us, give us a blank cheque, we’ll set up a number of committees and then we will work out different ways for mum and dad to pay more money ... ‘‘I think a mining tax makes more sense than a GST (increase) and I think putting a price on carbon pollution makes more sense than GST. ‘‘Tony Abbott, you do not need to increase the GST, just make sure mining companies pay their fair share. It’s fairly simple.’’ Mr Abbott has said that any changes to the taxation system, including the GST, would be taken to voters before being implemented. Mr Shorten also attacked the Liberal proposal to delay superannuation increases. ‘‘Superannuation should be a political no go zone, it should be a safe haven and not subject to new taxes.’’ He said that under the Liberal proposal 8.5 million Australians would have less money in their super when they retire.      :( Read more: http://www.theage.com.au/opinion/political-news/labor-will-not-increase-gst-shorten-20130518-2jszk.html#ixzz2TdCdSpRX

Yes Labor won't increase the GST but they will overspend (indeed have overspent by about $290 Billion dollars in their last 5 budgets)

GST revenues in 2012/13 were $46 billion.

Labor have overspent by 6.3 times the total GST revenue of the 2011/12 financial year.

Australia would have to increase GST by 630% just to repay the debt....... :exclamation   :-?

Justify this Mr Shorten? >:(

As someone who has worked in taxation and knows a little bit about tax policy, let me share some thoughts.

GST is the most efficient tax that Australia has. What does this mean? For every $1 of GST collected, there is a minimal detriment to GDP. In addition to this, and due to the coverage of GST (being very broad), GST is capable of raising as much if not more than income tax.

Australian Income tax and Company tax rates are roughly the average of the Top20 countries (by GDP) per OECD. We are slightly higher than average, but not by much. These taxes are not horribly inefficient, but could warrant some reduction.

The major problem with GST is that it is a regressive tax. People, rich and poor are affected equally by GST, which essentially makes it less fair on poor people.

This issue can be resolved by affording increases in welfare to the people on the lowest rung of the socioeconomic scale.

The Henry tax review (a few years back) was ultimately a pointless process, because Dr Ken Henry could not investigate GST policy in his analysis. So basically, the largest ever tax review in the last 10+ years ignored the elephant in the room.

The general idea that has been floating around tax circles since circa 2002 has been as follows:

Raise GST to 15-20% over a 5 year period in increments, eliminate inefficient taxes like customs duty and stamp duty completely (these are insanely inefficient and do not provide much revenue anyway), reduce the company tax down to approx.  25-27% and income tax threshold rates down, while creating a new income tax threshold for very high earners.

To address further inequity, increase welfare to soften the blow to working class people. While this might seem like taking away any benefit the GST might have, the point is not to raise more revenue, but rather, to make the revenue raised efficient for GDP.

On top of all this, GST prevents alot of tax avoidance as it is an indirect tax.

So to conclude, less tax schemes, less corporate/individual tax/stamp duty/customs = more economic activity. Welfare offsets regressiveness of increased GST, and increased GST offsets lost revenue from reductions/abolitions of other taxes, and (in theory, a short term hit to revenue and long term balance (once the GDP benefit kicks in).

So basically, this policy is LONG overdue. There is also another tax simplification policy which was an overhaul of the tax system called tax-value method which had consultation in 2006 and was stupidly dumped. That would be another great thing to re-consider.

Well put Tsfen


Tsfen wrote on May 18^th, 2013 at 7:04pm:

The major problem with GST is that it is a regressive tax. People, rich and poor are affected equally by GST, which essentially makes it less fair on poor people.

This is the main dissenting point of those that oppose it.  They've got to get over that us and them attitude.

The problem is that those that are viewed as being "the poor" are also the majority and therefore carry lots of political clout.  Politicians want to keep them happy.  They are also the members of society that pay the least amount of tax.

Convincing them to (maybe) pay more is selling ice to the Eskimos stuff.

They can't see past their nose to the benefits that Tsfen has pointed out..... :(

Swagman wrote on May 18^th, 2013 at 4:47pm:

RightSadFred wrote on May 18th, 2013 at 9:01am: Andrei.Hicks wrote on May 18th, 2013 at 8:53am: Australian GST should be increased to 15-20% with an offset reduction in direct taxation. The economics of that argument have always stood up for me. Andrei.Hicks I think you also mean indirect tax too. The GST is a broad based tax and the theory is about simplification. Once the overall taxation is simplified, ratcheting up and down a GST will be far more effective. Politically it was a huge sell getting the GST in in the first place, raising the GST will have a lot of political pain without a great deal of gain, can not see it happening in the near future. The GST needs to be increased if Govt services are to be maintained or improved. The burden of 'direct' taxation is falling upon fewer individual taxpayers due to the aging of the population. One of the main reasons for introducing a broad based GST was to counter the aging of the population. As the baby boomers retire and lots of them cease paying tax and start collecting welfare there will be less tax payers as a proportion of the population to pay the bills. Simple, but any increase in the rate of GST will be howled down by the very people that want the unsustainable increases in spending for education health and disability care such as Mr Crook....

yes,  correct.

i'm not sure what mr crook wants.
he sure would be a negative influence on any small business.  probably better the public sector employ him either as a public servant (where he can go on stress leave on full pay for being asked to do 10 minutes overtime)or the public purse can just pay his bills through keeping him on welfare.  a lot of the whinger bludger me me me types are better just being paid to stay right away from the productive parts of society (we cant risk the good workers being poluted) ;)

Andrei.Hicks wrote on May 18^th, 2013 at 5:41pm:

20% GST 40% top rate of tax Cut social spending Cut foreign aid Slim down unemployment welfare Would get my vote

quite a good formula andrei, might stave off the asian takeover for a few extra years.
still , i think we really need the asian businessman to come in and sort out the awful unproductive mess we have let ourselves become.
learn an asian language and their may be a place for you at the table. 
the asian overlords might spill a few scraps from the table for the bludger welfare class to fight over.
might solve the terrible obesity problem in our poorer suburbs, could be a good thing ;)

Tsfen wrote on May 18^th, 2013 at 7:04pm:

As someone who has worked in taxation and knows a little bit about tax policy, let me share some thoughts. GST is the most efficient tax that Australia has. What does this mean? For every $1 of GST collected, there is a minimal detriment to GDP. In addition to this, and due to the coverage of GST (being very broad), GST is capable of raising as much if not more than income tax. Australian Income tax and Company tax rates are roughly the average of the Top20 countries (by GDP) per OECD. We are slightly higher than average, but not by much. These taxes are not horribly inefficient, but could warrant some reduction. The major problem with GST is that it is a regressive tax. People, rich and poor are affected equally by GST, which essentially makes it less fair on poor people. This issue can be resolved by affording increases in welfare to the people on the lowest rung of the socioeconomic scale. The Henry tax review (a few years back) was ultimately a pointless process, because Dr Ken Henry could not investigate GST policy in his analysis. So basically, the largest ever tax review in the last 10+ years ignored the elephant in the room. The general idea that has been floating around tax circles since circa 2002 has been as follows: Raise GST to 15-20% over a 5 year period in increments, eliminate inefficient taxes like customs duty and stamp duty completely (these are insanely inefficient and do not provide much revenue anyway), reduce the company tax down to approx.  25-27% and income tax threshold rates down, while creating a new income tax threshold for very high earners. To address further inequity, increase welfare to soften the blow to working class people. While this might seem like taking away any benefit the GST might have, the point is not to raise more revenue, but rather, to make the revenue raised efficient for GDP. On top of all this, GST prevents alot of tax avoidance as it is an indirect tax. So to conclude, less tax schemes, less corporate/individual tax/stamp duty/customs = more economic activity. Welfare offsets regressiveness of increased GST, and increased GST offsets lost revenue from reductions/abolitions of other taxes, and (in theory, a short term hit to revenue and long term balance (once the GDP benefit kicks in). So basically, this policy is LONG overdue. There is also another tax simplification policy which was an overhaul of the tax system called tax-value method which had consultation in 2006 and was stupidly dumped. That would be another great thing to re-consider.

excellent post and a good read   cheers.

you seem to have a good brain.
any recommendations on cat extermination?

Swagman wrote on May 18^th, 2013 at 5:47pm:

Life_goes_on wrote on May 18th, 2013 at 5:32pm: The more you earn the better something like the GST is for you - unless of course, you're blowing your entire pay packet each month on goods and services. It's a tax that's felt more the less income you have. That's the typical argument.  It's bad for the down trodden because (shock horror) they have to make a contribution to the cost of Government. The more you earn the more you spend and the more GST you pay.  It also collects tax from the cash economy, from tourists, from drug dealers etc etc. More tax revenues means people on low incomes and welfare can enjoy better essential Government services such as health education and disability care. The majority of economies effected by an aging population have some sort of GST. Finland is a good comparison to Aust.  Cheap high quality universities and universal health care paid for with a VAT of around 24%  :o and comparable marginal personal tax rates as Australia. That STUPID argument about regressiveness has bitten lefties on the arse big time in Australia.  We have forgone 50% additional GST reveues for the last 20 years because of stupid Keating's GST scare campaign in 1993. What would the health and education and disability care sectors have done with 20 years of 50% more GST revenues huh??

Quote:

The more you earn the more you spend and the more GST you pay.

Not necessarily.

The more you earn also the more choice you have on how you spend.

Certainly the more you invest - GST free and the more you save GST free - the more contract work you are likely to have done (cash in hand) GST free. etc.

While someone on a low wage has no option but to expose almost all their wage to GST people on high wages are exposed to the GST to a lesser extent.

Dnarever wrote on May 18^th, 2013 at 9:37pm:

Certainly the more you invest - GST free and the more you save GST free - the more contract work you are likely to have done (cash in hand) GST free. etc. .

Contract cashies are not GST free.  Even if you do a job for cash in hand when you spend that cash you pay GST.  It will be collected one way or another.

Swagman wrote on May 19^th, 2013 at 11:19am:

Dnarever wrote on May 18th, 2013 at 9:37pm: Certainly the more you invest - GST free and the more you save GST free - the more contract work you are likely to have done (cash in hand) GST free. etc. . Contract cashies are not GST free.  Even if you do a job for cash in hand when you spend that cash you pay GST.  It will be collected one way or another.

So I can tell the government I am not paying any income tax and thay can just take it out of my GST payments????

Same thing, stupid argument.

The government get the GST on the service and they also get the GST on the money spent by the contractor on top.

Dnarever wrote on May 19^th, 2013 at 3:23pm:

Swagman wrote on May 19th, 2013 at 11:19am: Dnarever wrote on May 18th, 2013 at 9:37pm: Certainly the more you invest - GST free and the more you save GST free - the more contract work you are likely to have done (cash in hand) GST free. etc. . Contract cashies are not GST free.  Even if you do a job for cash in hand when you spend that cash you pay GST.  It will be collected one way or another. So I can tell the government I am not paying any income tax and thay can just take it out of my GST payments???? Same thing, stupid argument. The government get the GST on the service and they also get the GST on the money spent by the contractor on top.

It's up to you what you tell the taxman as it was pre-GST but the difference is post GST that when you spend your black cash you will inevitably pay GST and the Govt collects where it didn't before.

As Tsfen posted


Tsfen wrote on May 18^th, 2013 at 7:04pm:

GST is the most efficient tax that Australia has

Swagman wrote on May 21^st, 2013 at 3:49pm:

Dnarever wrote on May 19th, 2013 at 3:23pm: Swagman wrote on May 19th, 2013 at 11:19am: Dnarever wrote on May 18th, 2013 at 9:37pm: Certainly the more you invest - GST free and the more you save GST free - the more contract work you are likely to have done (cash in hand) GST free. etc. . Contract cashies are not GST free.  Even if you do a job for cash in hand when you spend that cash you pay GST.  It will be collected one way or another. So I can tell the government I am not paying any income tax and thay can just take it out of my GST payments???? Same thing, stupid argument. The government get the GST on the service and they also get the GST on the money spent by the contractor on top. It's up to you what you tell the taxman as it was pre-GST but the difference is post GST that when you spend your black cash you will inevitably pay GST and the Govt collects where it didn't before. As Tsfen posted Tsfen wrote on May 18th, 2013 at 7:04pm: GST is the most efficient tax that Australia has

ACT Chief Minister Katy Gallagher says she is not trying to undermine her federal Labor colleagues by supporting Coalition moves to review the GST as part of a wider tax assessment.

If elected in September, the Coalition will commission a white paper on tax which could include the GST.

But federal Labor opposes raising the tax rate and has accused the Opposition of wanting to lift it.

Ms Gallagher says the tax needs another look.

"I understand it's difficult to have a conversation about it particularly in the lead-up to an election but any rational look at this, and look at the Australian taxation system, would at least have the discussion around the GST not necessarily whether you increase it or change it but have it as part of that discussion," she said.

But Ms Gallagher concedes she is out of step with federal Labor.

"I'm not trying to undermine anything and you know I'll leave those matters for the Federal Government and the Federal Opposition," she said.

"I'm coming from it from the point of the Chief Minister of the ACT and I think it's fair and reasonable that at times we will have different opinions to that of a federal government."

Topics: tax, states