Abbott Government to deliver message that tax reform imminent — either higher GST or hike in income tax
Renee Viellaris
The Courier-Mail
July 04, 2014
AUSTRALIANS will be softened up in the coming months to accept changes to the GST or face paying more income tax.
The Federal Treasury Department has exclusively told The Courier-Mail that if Australians wanted to keep receiving government services they needed to make a choice – pay more income and company tax or take more pain at the bowser and supermarkets.
“If Australians continue to demand/expect the same or a greater level of services from government, revenue to fund these services will need to be found from somewhere,’’ a Treasury spokesman said.
“If we do not change our tax mix, Australians will need to pay more income tax. That is, given we are seeing a decline in the proportion of indirect taxes (such as) excises and the GST, and absent any other tax changes, income taxation will need to be larger.’’
The comments have gone further than the speech by Treasury Secretary Martin Parkinson to the Association of Mining and Exploration Companies on Wednesday.
Dr Parkinson urged for tax reform, signalling without change the system could have dire consequences for the states and the public. Speculation is mounting the Abbott Government’s white papers on tax and federation reform, due by the end of next year, will include broadening the GST, and encouraging the states to dump inefficient taxes such as stamp duty.
Finance Minister Mathias Cormann told The Courier-Mail yesterday revenue had to be raised the most efficient way.
“We are also committed to a review of our tax system to ensure government revenue is raised in the most efficient way possible,’’ he said.
A spokeswoman for the Newman Government said, “The Premier has made it clear he believes Australians pay enough tax”.
“His push is to ensure a fair share of the tax Queenslanders pay comes back to the state to fund the infrastructure and services a growing state needs.’’
Dr Parkinson hinted in his speech on Wednesday that the public would be regularly massaged about the need for broader-based taxes.
He said without conscious change the economic cost of raising tax from the current tax mix would increase.
“For the community to embrace change in this area, the case for reform has to be compelling and well understood.
“Reform proposals should highlight medium-term economic pay-offs (such as) the positive impacts they will have on individual effort, investment and growth.’’
Originally published as Higher GST or income tax hike — you choose