"All of them have been failing monumentally," Mr
Smith said. "You have got 1.5 per cent of GDP, which is
gone from tax revenue collections over the last 15
years, which has actually put us back to an indirect tax
collection before the GST was introduced, we are back to
1997 in terms of what we are getting from our indirect
tax system … that's roughly $25 billion per annum."
NZ-STYLE GST MODEL SUPERIOR
A professor of economics at Melbourne University, John
Freebairn, said Australia should not only listen New
Zealand on how to play rugby but should follow their
model of the GST.
"The GST covers about half the potential base," he told
the conference. "Why do we distinguish between a
necessity called clothing and one called food? I have to
spend money on utilities, water, sewerage and
electricity but in Australia we give a break for water
but we don't for electricity, is there any logic in
that?" Professor Freebairn asked.
The Liberal MP who kicked off the current GST debate,
David Gillespie also stepped up his campaign to adopt a
New Zealand style GST, which uses a 15 per cent rate and
applies to 97 per cent of consumption, rather than 47
per cent in Australia. Mr Gillespie has obtained
modelling from the Parliamentary Budget Office that a
NZ-style GST would raise an extra $65.6 billion and
allow personal income tax to be reduced, state payroll
tax to be abolished and small business tax to be cut to
25 per cent.
"If we did go the full monty à la New Zealand, there
would be $65.6 billion extra in GST raised by 2017/18 …
it obviously generated significant interest and a
broader discussion about the GST, which up to now has
been a bit of a taboo subject, so I'm glad I've ignited
a debate we had to have."
Prime Minister Malcolm Turnbull has said any tax changes
need to be "fair" and Treasurer Scott Morrison has
labelled Mr Gillespie's plan at the "extreme end" of
possible changes.
Source:::
The Australian Financial Review, dated
06/11/2015.........