An increase to the GST? :O

[i-need-a-martini]

It was bad enough to scrap the wholesale tax in favour of the GST, but now top of the list for LNP tax reforms will be increasing the GST and taxing those things that weren't taxed before like food, education and health.

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

And he has already broken his first promise and he hasn't even landed in the job yet - the tax cut to company tax is gone. Aren't 'broken promises' what the opposition have based their entire campaign on? ?:|

[cherry*135]

What policy reasons are there to reform the GST?

The two errors made at the time of introduction were exemptions and a “fixed rate”, whereby the government put strict conditions on any altering of the rate. These both reduced the simplicity and the revenue-raising potential of the tax and made it difficult to use as a policy weapon.

As a tax, the GST has the advantage of taxing (to some degree) parasitic industries such as tourism, by at least extracting some revenue directly from tourists. Used properly, it can reduce the cash economy, spread the incidence of tax and give some tax relief to PAYE taxpayers.

The immediate issue to face would be the inflation effect on food prices and any distorting effect this would have on interest rates.

 AUTHOR

John Mangan
Professor and Associate Dean, Faculty of Business, Economics and Law at University of Queensland

DISCLOSURE STATEMENT

John Mangan does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations

[just_me_karen]

I was hoping cat would answer but she mightn't be here at the moment

[nero_bolt]

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

i-need-a-martini said in the post below 

I've just put the Liberal spammers on ignore and...

http://community.ebay.com.au/topic/Community-Spirit/Ive-Just-Liberal/600159101

Seems that the Labor spammers are OK and that the children dont like anyone else having an opinion.... 

It was bad enough to scrap the wholesale tax in favour of the GST,

At least Howard had the back bone and ethics to take it to an election (unlike Julia), an election he WON, the Australian people have spoken, time that you moved on and accepted that.

[catsnknots]

Hi cat, in your opinion, would a rise in GST, or its inclusion of food, have any impact on the economy? If so, what would the impact be?

Including items that have been exempt are not the way to go. a slight increase of the GST will be fine, something that the economy can handle as it will not be burdened on just one industry but spread over many. 

People that pay more GST are people on higher incomes that buy more goods that are more expensive.... (in general) 

I think if it is taken to the people at the election in 2016 and the people vote it in there should be no problem... If the CO2 tax was taken to the people and voted on I would not agree with it but I would not think it needs to be reversed... 

If it is lumped on us without an election I would be cheesed off. 

[just_me_karen]

Hi Cat, 10% on top of everything is a lot of money for people on very low incomes. That's 10% less disposable income across the board. The problem arises when this missing 10% impacts on small business, because they're the first to feel the tightening of wallets.... and they're already feeling it. That means less money for employment. I agree with you about higher incomes paying more, because they have more spending power.

For the economy, bad... but personally, I'm agreeing with you that it wouldn't matter that much. I'd rather see 10% for all purchases, instead of increasing it to 15%. 

However, I would much rather spend my 10% on the carbon tax because it is proving a successful scheme. 

haha maybe tony plans to save us 10% on the carbon tax, by replacing it with 10% on other taxes?

[sandypas]

It doesn't matter which party is elected, we all have to be prepared to get our country back on it's feet and I think a small increase in the GST would be the fairest way as everyone would contribute.

[wareubin]

would much rather spend my 10% on the carbon tax because it is proving a successful scheme. 

If you mean successful because its one of the main reasons  this government is being dumped, then yes it is successful.

[cherry*135]

haha maybe tony plans to save us 10% on the carbon tax, by replacing it with 10% on other taxes?

People on Govt pensions/benefits get a twice yearly extra payment to compensate for the carbon tax at present, I think?

None of that for an inc in GST.

[silverfaun]

If Australians want NDIS, Gonski, Roads, Hospitals & all other massive services they have to be prepared for a GST rise. It's been used as a whipping toy by both sides of Government to scare voters.

Get rid of all the other taxes that should have been done when the GST was first introduced & have a fair dinkum tax review.

Abbott said he will have a tax review in the 2nd term of his government & if the GST is to be a serious play in reform he will take it to the people, just like Howard did.

There will be no lies to usher oneself into office, he's seen what bare faced lying did to Gillard. The Australian people will forgive pollies just about anything if they are truly sorry but they will never forgive a liar who lied to them just days out from the vote.

The Henry tax review suggested a raise or broadening base for the GSt but Labor lost their bottle, took no notice of him & then shunted him off to a cushy consultancy job. He sold out & so did Labor on real tax reform.

[silverfaun]

would much rather spend my 10% on the carbon tax because it is proving a successful scheme. 

If you mean successful because its one of the main reasons  this government is being dumped, then yes it is successful.

.

It's been as successful as the Mining Tax.

Raised a miniscule amount of money & Labor spent the billions it THOUGHT it was going to get from them.

Successful? no, it wasn't a success, in fact it was a massive fail, a huge embarrassment for the Labor party & has been the architect of their failure as a government.