STATES SPLIT ON GST REVENUE
So far state and territory treasurers have failed to
agree on broader GST reform.
But NSW Liberal premier Mike Baird and South Australia
Premier Jay Weatherill have called for the GST rate to
be increased from 10 per cent to 15 per cent and for the
extra revenue to be spent on the growing cost to state
governments of public health.
While Mr Baird has said a GST increase could be
accompanied by targeted tax cuts, Mr Weatherill said the
NSW premier's own modelling showed all the extra GST
revenue would be needed for health and the Commonwealth
should fund the compensation.
NSW Treasurer Gladys Berejiklian said NSW's proposal to
increase the GST to pay for state health and education
spending is "not inconsistent" with the Federal proposal
for income tax cuts.
"The NSW government recommends increasing the GST to 15
percent but also ensuring there is a compensation
package for households earning up to $100,00. In
addition to that there is still room for income tax
cuts.," Ms Berejikilian told a budget estimates hearing
on Thursday.
She said NSW proposal "is not inconsistent with comments
by the Federal government." Ms Berejiklian defended the
plan NSW put to the Council of Australian Governments
which involves giving households earning up to $100,000
compensation for the rise in prices as a result of the
proposed 5 percent rise in the GST.
"I appreciate that in many states $100,000 is an extreme
amount of money. It is in NSW as well but our living
conditions and cost of living are much higher, which is
why we believe a compensation package up to $100,000 is
a fair amount."
Ms Berejiklian said NSW had opposed proposals to exempt
tampons or anything else from the GST base or to extend
the GST to health and education. "It has been around for
some time. People are used to it. People accept the
existing GST base."
GST ADVOCATES WANT 'HIGHER TAX'
Mr Abbott slammed some
advocates of a GST hike saying they were calling for a
rise in government spending and higher taxes.
"The problem with a lot
of the people who are saying just whack up the GST is
that they want the overall burden of tax to go up, they
want government spending to go up," he said.
In late August,
Treasurer Joe Hockey flagged using spending cuts to
combat bracket creep in preparation for the release in
the coming months of the initial response to the tax
white paper process.
Business, union,
welfare and community groups at the National Reform
Summit agreed that all options for tax reform should be
left on the table and none ruled out. A Coalition
backbencher has raised concerns about the government
taking a GST rise to the election, however.
"I'm just observing
it's an incredibly complicated front to take on as a
government," Queensland MP, Andrew Laming, said. He said
he was "more optimistic" about leading a campaign with
job creation policies rather than tax reform.
ELECTION AN
'EXTRAORDINARY FIGHT'
Ahead of September's
key byelection in Canning in Western Australia, Mr
Abbott has also acknowledged his party's continued lag
in the polls saying the next election will be tough.
"The next election is
going to be an extraordinary fight," he said.
Source:
The Australian Financial Review, dated 03/09/2015. |