Should the GST be increased/widened?

[Logique]

Increasing the GST seems like the easy way out to me. What about some structural reform, like making the international conglomerates pay their fair share of tax. What about reining in all the middle class welfare. Or politicians pay and expense accounts.

Let's not forget that if Labor gets back in, a carbon/emission control cost impost is coming.

This is why the Australian public should fight a GST increase all the way, and at the very least resist the broadening of the base to fresh food.

 

[Junior]

Increasing the GST seems like the easy way out to me. What about some structural reform, like making the international conglomerates pay their fair share of tax. What about reining in all the middle class welfare. Or politicians pay and expense accounts.

Let's not forget that if Labor gets back in, a carbon/emission control cost impost is coming.

This is why the Australian public should fight a GST increase all the way, and at the very least resist the broadening of the base to fresh food.

I agree with the above.

GST should not be a priority above reviewing Super, stamp duty, NG, Income and Corporate tax rates/structures.

As has been discussed previously, the cost of super tax concessions and NG has been going through the roof, while the effect of bracket creep on incomes is starting to hurt. We have a relatively high corporate tax rate too. All this while those over 65 can stuff millions and millions in super and pay no income tax at all!

GST should not be high on the list of priorities.

 

[sptrawler]

I agree with the above.

GST should not be a priority above reviewing Super, stamp duty, NG, Income and Corporate tax rates/structures.

As has been discussed previously, the cost of super tax concessions and NG has been going through the roof, while the effect of bracket creep on incomes is starting to hurt. We have a relatively high corporate tax rate too. All this while those over 65 can stuff millions and millions in super and pay no income tax at all!

GST should not be high on the list of priorities.

I agree with you junior, the only problem is, all the real tax reform appears to have been put in the too hard basket.

The GST is an easy hit, that isn't percieved as favouring any sector, whether that is fact or not doesn't matter.
It is the perception that matters, when your motivation is re election and keeping your nose in the trough.

 

[overhang]

Sorry Iuutzu, I'm wrong.

Your imaginary self on $200,000/ year doesn't pay $60,000, he pays $67,547 including medicare then ad $6,000 for private health.

Let's just round it off at $70,000, so instead of $200,000, you actually have $130,000.

Doesn't sound any ware near as romantic, as your example.

So, how much more do you want to take of him, and give to the person on $50k who isn't paying any tax?

Where are you getting this idea that someone on 50k receives concessions? If we're talking about an average person here then surely this person has no dependents and thus I believe not eligible for any handouts. I just ran the calculator and someone on 50k a year pays $8,547 in tax, so I'd hardly call that not paying any tax.

Iuutzu is spot on that when you compare the two they would be paying quite similar amounts on unavoidable services, the richer person may have a larger house but both need heating, still need water, still need a phone, still need car rego and the list goes on. Iuutzu also raises the good point that the rich person is far more likely to travel abroad anyway and thus contribute little consumption tax to the Australian economy for that big budgeted holiday while the poor person can't afford to leave.

You can't make the poor richer by making the rich poor but you shouldn't make the poor poorer either through regressive consumption taxes. I don't trust the compensation for low income earners either, it would be good short term but the government would slowly eat away at it by lowering the concession rates against CPI.

 

[Junior]

I have a problem with expanding the tax to cover fresh food. We have an obesity epidemic in this country. As it stands the cheapest/easiest way to eat is at McDonalds, we don't need to make it worse by increasing the cost of veggies.

Theoretically some GST on fresh food would be OK, on the condition that the rate is increased for junk food....but that would be difficult to define and administer. Not worth the hassle.

A rate of 15% is too much, too soon at a time where consumer confidence is already low. Maybe widen the net a little bit and increase to 12%. Extra revenue must go towards health and education.

 

[nioka]

Supposedly, Australia is a resource rich country. Other resource rich countries use that as the main source of revenue. Simple low cost way of getting revenue as opposed to a GST which is a burden for small business with the work involved in the record keeping etc. Resource tax increases, that's what is needed.

Of course the mining giants would use their might and influence to stop this being implemented. A smaller public service would result so the boffins behind government would be against it as well. it would take a lot of backbone for a government to get this enforced and operative. Is there such a thing?

 

[overhang]

I have a problem with expanding the tax to cover fresh food. We have an obesity epidemic in this country. As it stands the cheapest/easiest way to eat is at McDonalds, we don't need to make it worse by increasing the cost of veggies.

Theoretically some GST on fresh food would be OK, on the condition that the rate is increased for junk food....but that would be difficult to define and administer. Not worth the hassle.

A rate of 15% is too much, too soon at a time where consumer confidence is already low. Maybe widen the net a little bit and increase to 12%. Extra revenue must go towards health and education.

I support a junk food tax, is is quite expensive to eat healthy as opposed to a takeaway meal or processed food from the supermarket. A junk food tax could be administered by taxing any food that has greater than X% of calories derived from fats. We should never broaden GST to include fresh food.

 

[SirRumpole]

Increasing the GST seems like the easy way out to me. What about some structural reform, like making the international conglomerates pay their fair share of tax. What about reining in all the middle class welfare. Or politicians pay and expense accounts.

Let's not forget that if Labor gets back in, a carbon/emission control cost impost is coming.

This is why the Australian public should fight a GST increase all the way, and at the very least resist the broadening of the base to fresh food.

My sentiments exactly. The Federal government is forcing a GST increase by starving the States of funds untill they scream in submission. All because Hockey is too lazy to chase the corporate tax dodgers and upper income welfare bludgers.

 

[drsmith]

I have a problem with expanding the tax to cover fresh food. We have an obesity epidemic in this country. As it stands the cheapest/easiest way to eat is at McDonalds, we don't need to make it worse by increasing the cost of veggies.

Theoretically some GST on fresh food would be OK, on the condition that the rate is increased for junk food....but that would be difficult to define and administer. Not worth the hassle.

A rate of 15% is too much, too soon at a time where consumer confidence is already low. Maybe widen the net a little bit and increase to 12%. Extra revenue must go towards health and education.

As it is it's difficult to administer. As an example there's 5-pages worth GST/GST free listings for bread/bread products alone.

https://expertsystems.ato.gov.au/sc...cSearchableFoodList.aspx?PID=68&ms=Businesses

As for fast food and the like, the tax system is not the place to influence lifestyle choices. It doesn't work for alcohol and the excise on that is not intended to. Its purpose is to raise revenue.

Colin Barnett seems to have offered the most sensible commentary so far but it's still largely a discussion about how to increase the overall tax take rather than reform tax.

Ahead of the meeting, Mr Baird said lifting the current 10 per cent GST to 15 per cent, without extending its reach, would bring funding certainty to cash-strapped States.

Mr Barnett, describing it as a “lazy option”, said increasing the GST to 15 per cent would be too big to be acceptable for most Australians. He thought 12.5 per cent was a better rate.

“But a change to the rate should be the last thing considered,” he said. Instead, extending the GST to online goods, axing the exclusion of fresh food and addressing issues around health and education — currently both GST-free — would deliver a more stable revenue flow to the States and Territories. The GST-free status of financial services should also be examined.

Mr Barnett said a floor of 50 per cent, below which no State’s GST could fall, was necessary as was a shift towards a per-capita carve-up of the GST across the Commonwealth.

https://au.news.yahoo.com/thewest/a/28934061/barnett-backs-gst-increase/

 

[Junior]

As for fast food and the like, the tax system is not the place to influence lifestyle choices. It doesn't work for alcohol and the excise on that is not intended to. Its purpose is to raise revenue.

The tax system serves many purposes. Raising revenue is the primary purpose.

Maybe it hasn't worked for alcohol, maybe it has. It has helped reduce consumption of tobacco products.

 

[drsmith]

The tax system serves many purposes. Raising revenue is the primary purpose.

Maybe it hasn't worked for alcohol, maybe it has. It has helped reduce consumption of tobacco products.

With tax there's a fundamental conflict between trying to use it to drive lifestyle choices and system complexity. Individual cases may have merit but need to be considered in that broader context and also through the prism that education should be the primary driver of lifestyle choice. In other words, the case needs to be compelling.

When something as broad as fresh food is exempted on the basis of lifestyle choice, it's making that a primary purpose at considerable expense to the stated primary purpose.

 

[Handofnod]

Increasing the tax is always the easiest way out, because everything is too hard or there is some sort or vested interest to go down this path, instead of fixing the barriers of the economy (which includes, social disadvantage, lack of jobs, lack of housing etc).

If you increased tax on food, then there will be more disadvantage places like what is happening here:
http://www.abc.net.au/news/2015-07-...vantage-entrenched-in-certain-suburbs/6631580

 

[SirRumpole]

The tax system serves many purposes. Raising revenue is the primary purpose.

Maybe it hasn't worked for alcohol, maybe it has. It has helped reduce consumption of tobacco products.

Even if taxes haven't reduced the consumption of alcohol, they help pay for the damage done by those products.

 

[pixel]

Even if taxes haven't reduced the consumption of alcohol, they help pay for the damage done by those products.

Sounds good in theory, but alcohol taxes go into consolidated revenue, thus helping pay for Bronnie's chopper rides and other "entitlements" our Canberra Overlords find necessary.
Conceded, some may be spent on advertising campaigns, e.g. "Alcohol, think again" and such. But those benefit primarily the advertising and media industry; their effect on kids' binge drinking and alleged adults DUI is debatable.

 

[SirRumpole]

Sounds good in theory, but alcohol taxes go into consolidated revenue, thus helping pay for Bronnie's chopper rides and other "entitlements" our Canberra Overlords find necessary.
Conceded, some may be spent on advertising campaigns, e.g. "Alcohol, think again" and such. But those benefit primarily the advertising and media industry; their effect on kids' binge drinking and alleged adults DUI is debatable.

Someone has to pay for hospitalisation caused by road accidents, drunken brawls and alcohol induced domestic violence, so the coffers would be worse off if not for those taxes.

 

[sptrawler]

Where are you getting this idea that someone on 50k receives concessions?

There you go, my apologies, I thought someone on $50k was still eligible for some low income tax offset.

 

[drsmith]

GST reform should focus on tax simplification both in terms of the GST itself and the inefficient state taxes it could replace. Broadening the base addresses the first and the extra revenue can address the second.

The removal of inefficient state taxes in itself would provide an element of compensation however where more is required, the opportunity for broader reform of tax transfer is also an option for some of the extra revenue, in particular at the lower end of the income scale.

Direct reform of the income tax base by reducing income deductibility options and CGT reform could be the direct approach to reducing marginal income tax rates higher up the income scale.

I'm not in favour of increasing the GST tax take or the income tax take through the Medicare levy (or otherwise) simply to increase the proportion of tax in the economy. Governments first need to spend the taxes they currently get more wisely.

 

[MrBurns]

I have lost complete faith in most politicians State and Federal, they wont be changing anything unless it benefits themselves.

They live in a world where they believe no one has money problems and they certainly haven't they take money from the taxpayer for every little thing they do , from lunch at Parliament house to chauffer driven cars.

If they need more money, easy, just hit the taxpayer, have an enquiry and plenty of "discussion" and lets not forget having a "conversation" to make it look like they're actually thinking about it but in the end, they take, we give, end of story.

 

[sptrawler]

GST reform should focus on tax simplification both in terms of the GST itself and the inefficient state taxes it could replace. Broadening the base addresses the first and the extra revenue can address the second.

The removal of inefficient state taxes in itself would provide an element of compensation however where more is required, the opportunity for broader reform of tax transfer is also an option for some of the extra revenue, in particular at the lower end of the income scale.

Direct reform of the income tax base by reducing income deductibility options and CGT reform could be the direct approach to reducing marginal income tax rates higher up the income scale.

I'm not in favour of increasing the GST tax take or the income tax take through the Medicare levy (or otherwise) simply to increase the proportion of tax in the economy. Governments first need to spend the taxes they currently get more wisely.

As per what Kerry Packer said 20 or 30 years ago, nothing changes.

The squeakiest wheel, gets the most oil. There is no accountability, for any spending, at any level.:1zhelp:

Be that the welfare recipient, on the tax payers back, or the politicians on the taxpayers back.

The age of entitlement is alive and well, at all levels of society in Australia, and it will not change easily.lol

 

[pixel]

I have lost complete faith in most politicians State and Federal, they wont be changing anything unless it benefits themselves.

They live in a world where they believe no one has money problems and they certainly haven't they take money from the taxpayer for every little thing they do , from lunch at Parliament house to chauffer driven cars.

If they need more money, easy, just hit the taxpayer, have an enquiry and plenty of "discussion" and lets not forget having a "conversation" to make it look like they're actually thinking about it but in the end, they take, we give, end of story.

As per what Kerry Packer said 20 or 30 years ago, nothing changes.

The squeakiest wheel, gets the most oil. There is no accountability, for any spending, at any level.:1zhelp:

Be that the welfare recipient, on the tax payers back, or the politicians on the taxpayers back.

The age of entitlement is alive and well, at all levels of society in Australia, and it will not change easily.lol

I agree with both of you.
But what's the solution?
Do we conclude that the Westminster System has reached a dead end? Do we have to seek a new way of electing a new breed of representatives? Can we return to the principle of effectiveseparation of powers that really works? Where it's not the politicians that determine what they're entitled to, but where the electorate sets the boundaries - maybe even in hindsight, when it is evident, how each has performed?

But never mind - it'll never happen because the current crop of lawyers and megalomaniacs have entrenched themselves to such an extent that it would take a Putsch or a Revolution to get rid of them. And I wouldn't want to wish that on Australia - not just yet...