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The Forum > Article Comments > Our politicians can't be trusted with a 15 per cent GST > Comments

Our politicians can't be trusted with a 15 per cent GST : Comments

By Brendan O'Reilly, published 6/11/2015

Any new income tax cuts funded by a higher GST will likely only be temporary, and all we will end up with is higher taxes overall.

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Any increase in the GST would prove beyond all doubt that our politicians are lazy, stupid and gutless. Spending, not revenue, is the problem. The Treasurer recognised this when he took up the job but, suddenly, he and the idiot PM are looking for the easy way out and thinking about ripping more off the people so that they can continue the wild spending on Labor schemes like NDIS, Gonski, foreign aid, disability pensions and total welfare packages for Muslims who won't work. With Turnbull, much loved by the Left, and of the Left himself, we are heading back to the waste and big spending days of Rudd and Gillard.
Posted by ttbn, Friday, 6 November 2015 9:49:06 AM
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Any talk of offsetting any potential GST increase by a reduction in income taxes has to be an insanity. A deficit problem can surely not be solved by such a sleight of hand.

It also appears no easy task to reduce, or even contain, expenditures.

Only one solution comes to mind, and that is to increase employment - even if this would require our governments to increase 'appropriate' expenditure on productive infrastructure projects, or in supporting industrial and manufacturing development projects, or in tax 'incentives' for industries to expand, and particularly to expand their 'exporting' capabilities.

'Tightening the belt' (by constraining, or even reducing, such as childcare, pensions, welfare, health, education, R&D, etc, etc) may be the worst possible approach, but some such containment in the short term may well be an unavoidable component of an expenditure strategy aimed at the long term good, at long term employment expansion.

What we certainly don't need is a 'soft sell' when what is really needed is truth and honesty and the guts to make the necessary 'hard' choices in the long term national wellbeing.
Posted by Saltpetre, Friday, 6 November 2015 1:00:55 PM
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Brendan says

“The GST was also supposed to result in the abolition of some inefficient state taxes, such as stamp duty and land tax, but this never happened.”

This is wrong. The GST was never intended to replace land tax (which is actually quite efficient) and only parts of stamp duty were scheduled for abolition. Of the 10 taxes the States agreed to abolish, only one - stamp duty on non-residential property conveyances – was not abolished in accordance with the agreed timetable.

http://www.budget.gov.au/2007-08/bp3/html/bp3_main-12.htm
Posted by Rhian, Friday, 6 November 2015 2:08:58 PM
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The problem is that Labor can't be trusted to spend every tax dollar and more.
Posted by Shadow Minister, Friday, 6 November 2015 4:38:28 PM
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Rhian

We are talking about different GST scenarios and different times.

I was talking about the GST as it was originally sold to the Australian public. You are talking about what was eventually signed off after the Democrats trimmed back Howard's proposal and there was much less money in the kitty than originally anticipated.

Paul Keating first raised the idea of a broad based consumption tax at the 1985 Tax Summit but the idea went nowhere. John Hewson proposed a GST at the 1993 election but lost. Howard resurrected the idea in 1998 but only a trimmed back version got through the Senate in the end.

The agreement with the States you refer to was made around 2006 and had to reflect a big hole in GST collections resulting from the Democrats insisting that no GST be applied to food and a number of other areas of spending.

The original Howard Government plan for a GST envisaged the States abolishing a raft of taxes. The list was somewhat fluid initially, then firmed up in a deal announced by Howard in May 1999,and later narrowed further. The removal of all stamp duties was originally planned. Under the 1999 deal this was limited to stamp duty on business property and land tax was off the agenda. In the end the removal of even stamp duty on business property ended up being deferred indefinitely.
Posted by Bren, Friday, 6 November 2015 5:50:02 PM
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Hi Bren

Your article implies that state governments promised to abolish land tax and stamp duty but reneged on that commitment. That’s wrong.

Yes, there were several proposals for GST over the years. However, none I am aware of proposed to abolish land tax or to completely abolish stamp duty. The Howard Government’s original proposal would have seen nine state taxes abolished:

Financial Institutions Duty;
¨ debits tax;
¨ stamp duty on marketable securities;
¨ conveyancing duties on business property;
¨ stamp duties on credit arrangements, instalment purchase arrangements and rental (hiring) agreements;
¨ stamp duties on leases;
¨ stamp duties on mortgages, bonds, debentures and other loan securities;
¨ stamp duties on cheques, bills of exchange and promissory notes; and
¨ ‘bed taxes’.

So the “GST as it was originally sold to the Australian public” never included abolishing land tax, even before the Democrats go to it.

http://archive.treasury.gov.au/documents/167/PDF/Whitepaper.pdf

Even at the 1996 WACOSS/ACCI tax summit, which probably spurred Howard to propose the GST, I don’t recall abolition of land tax being on the table.
Posted by Rhian, Friday, 6 November 2015 6:29:12 PM
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