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.

20% GST
40% top rate of tax

Cut social spending
Cut foreign aid
Slim down unemployment welfare

Would get my vote

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

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.

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



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)

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



excellent post and a good read   cheers.

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

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


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.