"That's about $4500 for every man, woman and child
in the state."
Mr Pallas said lifting the GST from 10 to 15 per
cent would raise about $31.5 billion per year, but
the compensation package would cost around $17
billion, and cutting the corporate tax rate might
cost $11 billion.
"If you add in another $5 billion of income tax
cuts, a lift in the GST nets itself out, leaving the
states and their citizens still short-changed on
hospitals and schools.
"He will tell the Canberra meeting a better option
would be to lift the Medicare levy, which is at
present 2 per cent.
Australians earning $20,896 or less don't pay the
levy, meaning the increase would hit high earners
harder than low earners.
"We've done some numbers about what the increase
would look like: an increase of 0.5 per cent would
raise $3.8 billion nationally. An increase of 1 per
cent would raise $7.6 billion, all the way up to 3
per cent which would raise $22.8 billion," Mr Pallas
said.
"When you look at offsetting mechanisms a hike in
the GST would need, a lift in the Medicare levy
isn't even in the same ballpark."
Queensland's Treasurer Curtis Pitt is sympathetic to
Victoria's idea. South Australia's Treasurer Jack
Snelling is prepared to consider both the GST and
Medicare levy ideas.
Writing in Friday's Fairfax Media newspapers ahead
of the meeting, the Commonwealth Treasurer Joe
Hockey backed a cut in the rate of company tax paid
for by a shift to "more efficient taxes". He said a
cut of 5 percentage points could boost GDP by 1 per
cent.
Friday's meeting will also consider exempting
tampons and sanitary pads from the GST and all-but
eliminating the GST-free threshold on imported
parcels.
Victoria and each of the Labor states will argue for
an exemption.
"It seems incongruous that comparable products are
exempted, but sanitary products are not," Mr Pallas
said.
Mr Hockey told the Q&A program in May that he
thought sanitary products probably should be
exempted.
Ms Berejiklian is less keen. "We can't tinker with
the GST with one-offs - we need to address these
issues holistically," she said before flying to
Canberra for the pre-meeting dinner on Thursday.
Both NSW and Victoria are keen to cut the $1000 GST-free
threshold to as low as is possible.
Canada has a tax-free threshold of $20 for imported
parcels, the United Kingdom has 15 pounds and the
United States has no threshold at all, subjecting
all parcels to tax.
Mr Hockey has previously raised the prospect of a
zero threshold, with the tax collected from overseas
retailers before they post the goods.
The May budget introduced a zero-tax threshold on
digital deliveries of books, music, movies and
software, to apply from mid-2017.
Mr Pallas said he would support a threshold right
down to the point where the cost of collection
exceeded the amount collected.
"We will commit to the principle. We believe the
threshold should be low, he said.
Source:
The Sydney Morning Herald, dated 21/08/2015. |