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.

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.

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

The problem is that Labor can't be trusted to spend every tax dollar and more.

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.

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.

Rhian

What I said was "The GST was also supposed to result in the abolition of some inefficient state taxes". This statement refers to the carrot put forward by those proposing a GST, when it was being sold to the public before the 1988 election.

I did NOT say that "state governments promised to abolish land tax and stamp duty but reneged on that commitment". You are both taking my statement out of context and also forgetting that the State Government commitments (made half a decade later in the mid-1990s) were only made after the more limited GST was negotiated with the Democrats. By then many of the originally floated "carrots" were well and truly pushed off the table through insufficient revenue.

Abolition of stamp duties certainly featured in the selling of the GST. There were fewer references to land tax. The federal and NSW governments in 2006 both engaged in advertising campaigns concerning claims that New South Wales had breached its contractual obligations under the 1999 GST Agreement by continuing to charge stamp duties and land taxes. The New South Wales State Government eventually announced in its budget that it would reduce stamp duty and land tax, but critics argued that the State Government did not go far enough.

See https://en.wikipedia.org/wiki/Goods_and_Services_Tax_%28Australia%29.

Trust? What? Trust me I'm politician? Pensioners who' s costs had risen when the GSt was introduced, received $450.00 per to cover an increased of on average $900.00!

Mr Hewson is on the public record advocating increasing the rate to 15%/broadening the base and compensating pensioners by simply doubling the pension rate?

Some intrinsically fair universal tax relief would be available to all, simply by increasing the tax free threshold?

In which case almost every taxpayer would get some relief!

Warren Buffett realised someone as rich and privileged as him shouldn't pay less tax than his secretary. Who was paying 30% of her earnings while billionaire Warren was allowed to pay just 15%?

Given my druthers I'd abolish the GST, Which would leave lazy state governments unable to avoid long overdue reform like a health system that requires outcomes in order to attract funding paradigms. Thereby eliminating most of the waste that effectively doubles the cost of public health care?

Regional autonomy would possibly cut the education budget by as much as 30%; albeit, with large public service redundancy?

And therefore resisted to the last drop of blood to those we the mugs out there in mugsville owe a living to!?

While lying in hospital recovering from a stroke, one of the nurses suggested if we just all paid 10% of our income as tax, The government would have all the money it really needed? Particularly if they just eliminated all the current waste!?

I'm not sure about that, but maybe if we abolished the GST and all paid a transactions tax say 1.1%? As money moved between and in and out of accounts. We could raise all the money we'd need just by making all the current avoidance impossible, via the unavoidable expenditure tax I've long advocated?

Some estimate we are bleeding in excess of 60 billions per in international avoidance/lost revenue?

A sum which would fix the structural deficit and deficits going out as far as the eye can see!?

The GST the only regressive tax in vogue!? A 5% increase guaranteed to kill discretionary spending!?
Rhrosty.

Unfortunately no one has mentioned the large grey elephant in the corner of the room, that being debt.

We are at peak debt, this is why commodity prices are falling, the hip pocket, whether industrial, commercial or domestic can no longer afford the ever increasing costs associated with our style of economy.

We have been on a debt binge since the end of World War Two, unfortunately mainstream economists, politicians and the banking fraternity either don't understand this concept, or don't want to.

Governments will continue to raise taxes, we walking stiffs will have to pay up, but over the long term deflationary forces that cannot be controlled will guarantee we all become poorer and poorer and governments will provide less and less services. This is inevitable in any society, particularly as resources, especially cheap energy, declines. This is a fact when dealing with any finite resources.

Household debt in Australia is at a point where consumers can no longer afford to keep going into further debt to enhance their lifestyles. This will lead to less spending, Vis less demand, Vis less employment, Vis higher individual taxes etc. it's a trap that was baked into the cake and the inevitable collapse of our consumer based way of life is guaranteed.

The timing is the only unknown but I would say we are on the wrong (downward) side of the curve already!

"It's a trap that was baked into the cake and the inevitable collapse of our consumer based way of life is guaranteed."

I'm starting to think this way too, but for other reasons.

No amount of GST increases can make up for consistent foolish spending.

So we're paying women to get pregnant, have kids and for the cost of maintaining both the mother and child/children for years...
And now I saw that Centrelink pays job seekers to get and keep a job.
$2500 for the first years employment and $4000 for the second - total $6500.
If they are assuming the job seekers are lazy, then why reward them for being lazy?
And if there aren't enough jobs to go around then how will this payment improve anything other than cost taxpayers?

...Throwing it away.
This is a nation run by idiots.

I already put my opinion forward weeks ago.

I won't support any increase in the GST until you make politicians accountable.
They make the laws for us, we should make the laws for them.
...And build a prison for them for when they screw up.

The wingers are in. Never mind Turnbull he is the coalitions best leader ever. We have stability, not lies on top of lies like the last fearless leader that was a fraud.

All this Turnbull hatred comes from Conservative voters that would like Australia turned into a one sided communist state. Leave the fat cats alone, and strangle the workers, that is all that mob can see.

More GST and less income tax, that makes good sense. It takes a proper Liberal govt to come up with that. More pension to cover the GST and everybody is happy.

All businesses must pay tax, cut all the deductable crap out. If it is not a direct advantage for a business, it is not a tax deduction. No one can claim 24 hours a day as deductable. Private costs must be separated from business.

More input from everybody must be spread right across community without exception.
Mal and Bill are the right mix of govt; to do just that.

It's 2015 the tax system is a farce
A tax system which is not automated which requires constant manual data entry which requires visits to accountants to navigate through a minefield of exemptions and minimisation strategies

The gst and our entire tax system is not even 20th century thinking it is straight from the 19th century

Why would not we just automate tax payments? Rather than millions of businesses manually processing and calculating and deducting and avoiding and reclaiming.

We implement an automated universal financial transaction tax and ditch the gst and a raft of other taxes

A universal financial transaction tax satisfies every criteria for a good tax - those who spend more pay more, those with little pay little. The collection point is automated at the bank financial institution level. the government would receive the tax immediately and would have up to the minute picture of our economy

A mere 1% financial transaction tax would collect more than the current gst and payg taxes because it would capture the big item transactions, the financial speculation the big deals - and this is the singular reason why it is not implemented - the very rich and powerful don't like to be trapped by simplicity they prefer to dodge and claim

So this whole discussion about increasing gst is simply an acceleration towards the current systems total collapse and the inevitable suffering that will entail

We can simplify taxation and welfare with reality and balance the budget problem . The following principles illustrate how:-

1.GST taxes the most those who have most income to spend. If it is not levied on food , rent, medical, education, and home loan interest it is NOT regressive.

2. Income tax should be levied on income left after the real costs of earning it.
Therefore, reasonable cost of getting to work should be deductible, along with cost of day care for children.

No subsidies for day care as deductibility should be enough and if it is not enough one parent should stay home.

3. A family unit should be defined as a group involving a couple who have registered as obligated to support one or more dependants.

That unit should be taxed as a unit at normal rates on combined income divided by 2 after deduction of a fixed amount per dependant and a fixed amount per child for children sent to non- government schools.

4. Rebates, as distinct from deductions should be abolished as complications resulting from the politics of envy.

5. THEN we should be able to adjust tax rates to ensure a balanced budget and avoid the huge accountancy and public service costs of "churn" i.e. administering rules to get money in only to pay it out, in day care, private school subsidies, and general gimmickry we see now. The savings should be enormous and we can still have an adequate welfare net.

Unemployment benefits can be maintained but coupled with an obligation to move to get employment where it is available with assistance on the moving costs.

We should not have fruit picked by labour imported from the Islands while people complain they cannot get a job.

Job applications should be videoed and the videos stored at Centrelink. A person who interviewed for a waiter's job with a ring in the and purple tufts of hair should learn to eat at a soup kitchen.

It all amounts to lining up our taxation system and welfare net with
reality.

Another thing to contemplate is productivity (efficiency) and substitution.

Governments bang on about raising productivity somehow forgetting that once you reach the top end it cannot continue. There are laws why efficiency cannot exceed 100%.

Likewise as you bring in substitution you automatically introduce lower quality into the equation, particularly when discussing resources like iron ore, coal, lithium etc, we always pick the best or low hanging fruit first, in our case these have already been exploited in the main.

Taxation is but one tool, unfortunately we are pushing against limits we have no control over, this guarantees the debt trap and the inevitable long-term decline in living standards.

We are all having the wrong argument or discussion, but as we all know, unpopular issues seldom get the mature discussion that is clearly needed.

Of course they can't. Slime ball Turnbull just wants some more money to buy votes from the stupid,

Hi doog & company!

Hi Bren

Whatever was said in the political bunfights of the 2000s, the actual agreement between the states and the Commonwealth makes no mention of land tax and refers only to some stamp duties:

https://www.coag.gov.au/node/75

Rhian

I agree this time

A parcel of money is goods, including by definition.
Armoured trucks take goods to banks, don't they?

Online transfer of money involves GST, or soon will.

A parcel of money leaving a country where GST applies and arriving in a country where that money is serviced in investment, surely should be subject to GST.

How much money have Australian politicians sent to the Cayman Islands tax haven for investment?
Should be some GST revenue out of that. LOL

No one addresses the debt money creation system. There would be no need for tax increases if new money for growth was created debt free.

James Rickards in 'The Death of Money' says our monetary system is in the final stages of collapse. Debt is compounding like interest and after 40 yrs exponentially more debt money must be created today to pay for the past debt.http://www.youtube.com/watch?v=7l84uHzRc50

The world debt is 3 times the GDP of the planet and can never be repaid. The banks have created more money since 2008 that was created from 1900 to 2008.We have exponential money growth that is temporally quarantined in the share market, derivatives, Govt Bonds and properties.

Money growth. LOL.
Don't forget the money being drained from from consumers due to trading in international currency.

Learn about the biggest money scam in history.http://www.youtube.com/watch?v=iFDe5kUUyT0&feature=share

mostly well said by everyone so far,

1, the monetary system is rubbish.

2, the tax spend system is very inefficient at the moment.

3, spending on junk is out of control.

4, nobody is talking enough about efficiencies in government.

iacm,

All true. Plus.

1. The money system is out of date, never was in date, and needs urgent structuring or re structuring at least.
2. The tax system suits the finance industry.
3. Spending on junk suits political spending because it's for cheap sample goods and token service.
4. Nobody in actual power in government is talking about innovative productivity and leading the way.

JF Aus, before 1972 our governments were picking winners & leading the way, very well, Snowy Mountains, farming innovation, etc.

iacm,
Yes.
What has happened to that type of leadership and spirit?
And on top of losing that we have lost the wool industry that used to involve Australia living off the sheep's back.

I made a suggestion in the supporting information to the Agricultural Competitiveness White Paper but all the talk about innovation and infrastructure seems forgotten, and now there is increase in GST instead, without any contact or apparent interest in productive export revenue generating opportunity.

Cash money has been drained out of pockets and purses of consumers to the point consumption is down and a lot of retail business is no longer viable.

There is need for government to encourage economic development instead of screwing consumers that presently remain.

JF Aus, once consumers have spent all their disposable income & gone into debt as well, the economy has nowhere to go but down. All this string & lever pulling in a desperate attempt to re-inflate a burst bubble is only delaying the eventual crash, deepening it.

ALL services industries are parasitic by nature & having only 3 UN-stable host or productive industries namely quarries, farming & tourism is suicidal. We need to accept the new normal, get consumers to spend even less, so that we can encourage more savings, more capital to invest in business.

More foreign investment is the last thing we need.

imacentristmoderate,

I agree with you there completely except for one point.

From my point of view involving world food sustainability, I think the best focus on solutions should be to encourage productivity involving good business and employment and prosperity and peace.
One way could be to create a whole new industry to engineer rehabilitation of the ocean and atmospheric ecosystems of this planet.

Evidence I see indicates productive solutions are required, to develop business and industry and properly paid employment, not unproductive new business such as school batts or costly non viable - reinvented tram systems. Viability is essential.

I think the world economy requires stimulus to put cash money in pockets and purses of all people, especially at the bottom of the economy where there are many potential and willing customers.

In other words, instead of giving in and looking downhill, look for opportunities that may arise from innovative solutions.

I think every money system in every country would welcome sensible economic stimulus and updating, to their benefit.

You really should stop posting on financial topics, Arjay. You have proven time and again that you don't understand even the most basic of concepts.

>>The world debt is 3 times the GDP of the planet and can never be repaid.<<

There is absolutely no logic behind that statement.

GDP is a figure calculated annually. Think of it in the same way as you see your annual salary. And then consider what happens when you borrow money to buy a house.

The backing behind the money you owe on your house is not your salary - that is simply a measure of your ability to repay on a regular basis. What actually backs up your loan is... your house.

If you default, the debt is repaid with your house, not your salary.

On a national level, the total value of Australia's residential property alone, let alone all the other assets such as our businesses, farmland etc. is three times the size of our GDP.

So you can relax on the default idea.

You also choose to ignore the fact that it is in the creditor's best interest to keep you solvent. Same goes for countries. There is little point in, say, China calling in its markers from all over the world, if that kills the market for its products. Which it would.

Your most tired mantra is, of course, this one:

>>There would be no need for tax increases if new money for growth was created debt free.<<

You have consistently failed, over many years, to explain how money - for any reason, let alone "growth" - can be created debt-free.

And I doubt you can today.

Give it up. You are an embarrassment to yourself.

You are an absolute joke Pericles. If what I say is false, why do you spend so much time trying to refuting it?

It times of universal deception, the truth becomes a conspiracy theory in your mind, but self evident to those of sound judgement.

Jim Rickards is a CIA and US Federal Reserve insider and even he knows this will end in disaster

Pericles for President!
A voice of sanity, in the wilderness of bluster and babel.

As the U.S. exempts its industries from virtually all environmental and public health constraints (including particularly the petrochemical industry) in search of growth and glory, could little AUS shine a light on a better way to sustain the happiness of its constituents and the wellbeing of the Blue Globe and all its superb inhabitants?
To see, to encapsulate, to live, the ultimate Dream?

Price Check! A temporary tightening of belts, a focus on essentials, the evolution of a 'vision', and no-one left behind or left idle?
Not a level playing field, but a field for all players!

A modest shave for the top-end, a scaling-back of 'benefits' (in childcare, etc) for the $100,000+ brigade, elimination of 'offshore' tax-haven 'perks' for business and for individuals, and a dedicated focus on sustainable long-term development, on jobs, jobs, jobs.
Now there's a team I could barrack for!

Increase GST? Mere tinkering with unclaimed baggage on the wharf, while the good ship Lollipop steams determinedly into a dying sunset!

Think of it as a selfless act of kindness towards a fellow-citizen, who needs help to understand the world around him.

>>You are an absolute joke Pericles. If what I say is false, why do you spend so much time trying to refuting it?<<

But let's be clear. I have ignored your interminable displays of complete and undiluted nonsense on at least five times more occasions than I have commented on them.

Just try, for a moment, to find one single inaccuracy in my last post.

Fact is, you know you can't, so you simply resort to bluff and bluster. As you have here:

>>It times of universal deception, the truth becomes a conspiracy theory in your mind, but self evident to those of sound judgement.<<

I didn't even mention conspiracy this time around. But it is both interesting and informative that you have.

You will understand, one day. If you did some genuine research on the topic, that day will come all the sooner.