The flaws of an increased GST might outweigh the benefits
Posted
Scepticism should rule when examining possible changes to the GST. The associated compensation package could mean the reform as a whole isn't worth doing, writes Michael Potter.
Australia, write this out 100 times: the GST is not a perfect tax. All taxes are flawed - it is just that the GST is less flawed than other taxes.
It is superficially appealing to cut a particularly flawed tax (such as the company tax) and fund this tax cut by increasing a less flawed tax (the GST). But it is never as simple as this.
Most people know the GST hits low income earners harder. So any increase in the GST will need compensation. And unfortunately, compensation has its own flaws. It will most likely be highly targeted compensation - as you work more, your compensation will decrease. And this, unsurprisingly, creates disincentives for work.
The result: reduced employment, particularly among second-income earners (usually women). There are already substantial disincentives for second income earners to work. Making these disincentives worse is an unwise idea.
And all this compensation means less money for cutting the more flawed taxes, such as company tax.
Of course, we could cancel compensation for low-income earners. But good luck getting that idea through Parliament. We should be reminded of the experience with the introduction of the GST in 2000: most Australians were substantially overcompensated, and yet the complaints were endemic.
There are even more issues with proposals to include food, education and health in the GST.
First, putting the GST on food (in particular) would require compensation to be even larger, exacerbating the problems raised earlier.
Second, parts of education and health spending are like saving for your future, and the whole point of a GST is that it applies to consumption and not saving. In simple terms, taxing health and education will result in some double taxation - which a GST is meant to avoid.
Third, health and education are heavily subsidised, so adding GST to these services would mean teachers, professors, doctors and nurses would all clamour for increased subsidies. It is hard to see any government ignoring these complaints. More tax on education and health combined with more spending on education and health doesn't sound like an improvement.
And of course, increased subsidies mean less money for cutting flawed taxes like the company tax (apologies for sounding like a broken record).
It might be easier for a government to resist the call for increased subsidies for private health and education. But this would aggravate other problems: both private health and education compete on a very un-level playing field with free public health and education, as subsidies for private providers are (usually) much less than the government spending on public providers. As an example, average government spending per student in public schools was $15,703 in 2012-13, while the average subsidy for each private school student was $8,812.
Therefore, adding the GST to private providers would further tilt the playing field against them. This might lead to a substantial exodus back into the public health and education systems, partly or fully eating up the tax revenue from the broader GST. While there is ongoing debate about the extent of this potential movement, the possibility of a large shift occurring cannot be ruled out.
There is another issue with GST on education. As the GST doesn't apply to exports, it would be added to the fees for domestic students only, not international students. It isn't clear that the Australian public would be keen on this different tax treatment.
Nevertheless, there are a few welcome signs in this debate. The Assistant Treasurer Kelly O'Dwyer has said the government does not want to increase the tax burden on Australians. We certainly don't need taxes to go up, not while the Australian tax burden is around the historical average and set to go above the average in coming years.
And it is good that many in the public debate recognise a priority should be on cutting the worst taxes - and company tax is considered to be one of the most flawed and inefficient taxes in Australia (along with stamp duties), in research from Treasury and from KPMG. Importantly, this research confirms the GST is less flawed than many other taxes, but it still isn't perfect.
As a result of these concerns, scepticism should rule when examining possible changes to the GST. Australia's most flawed taxes might be reduced, but the flaws of an increased GST and compensation package might mean the change as a whole isn't worth doing.
Michael Potter is a research fellow in the economics program at the Centre for Independent Studies.
Topics: tax
Comments (288)
Comments for this story are closed, but you can still have your say.
gerard oosterman:
02 Nov 2015 1:25:38pm
Most taxes are flawed? No, they are not. Tax is good, Manna from heaven.
It allows our kids to go to schools, help us with knee reconstructions, give the elderly a well earned income, pay for roads and airports.
We should march in the street and welcome GST increase. Most OECD countries have higher GST rates than us.
Alert moderator
Gary:
02 Nov 2015 1:47:31pm
The GST is less flawed than other taxes? Did I read that right?
The GST is MUCH MORE FLAWED than other taxes because it is horribly regressive and because it taxes consumption which is the basic driving force of the economy.
Alert moderator
Darren:
02 Nov 2015 3:32:21pm
Thats right Gary. If ever there was a "Great big tax on everything" it is the GST. After 6 years of the Liberals misleading everyone about the impact of the carbon tax (Wyalla anyone?) and then wasting every cent of the salaries paid to design and implement the tax by scrapping it the Liberals want a "serious" discussion (I presume that means without repetitive slogans as mentioned above) about raising the biggest tax you can put on an economy. The fact the Liberals are serious is utterly ridiculous and I urge every Australian to send the lazy Libs back to the drawing board.
Alert moderator
Claudius Pseudonymus:
02 Nov 2015 3:51:04pm
@Gary .... consumption which is the basic driving force of the economy???
Hahahahahaha... I'm screaming with laughter...!! Where did ya learn that? At the Labor Loony Toony School of Economics?
Where No ifs No Buts Surplus can magically transform into $48.5 billion DEFICIT and yet still be called a success?
Where $37.5 billion NBN budget can blow out to $80 billion and still be called an "infrastructure investment" success?
The Labor Party's Robin Hood Microeconomics 101 ... Tax the Rich, Over-spend ..err, over-invest in infrastructure... leave huge debts and let "working Aussies" pay for all their profligacy ...err, investment in infrastructure"
And if anyone ask any questions just say ...GFC! There u go.
If they persist...scream Misogynist!
Alert moderator
Rhino:
02 Nov 2015 4:14:50pm
Um, Claudius
It is a pretty basic tenet of Economics in an Advanced economy that consumption is a driving force of the economy. Lots of google scholar articles showing consumption and economic growth and development are a well studied field.
As for the deficit to surplus, Tony Abbott promised to cut taxes and reduce the deficit. He cut taxes, but didn't resolve the deficit, he increased it or owns the reality that it increased on his watch. Take your pick, but you can't cut deificits blithely cutting taxes, especially when they are not regressive taxes.
The blow out in the NBN has a lot more to do with changing from a sensible rebuild of the network to full fibre by the Labor NBN, to the bastard child created by Turnbull and Abbott, which is already dropping it's "cheaper" fibre to the node (note the expert opinon from British Telecom, who rolled this design of netowrk out themselves, that doing this was a massive mistake) for fibre to the curb as they are discovering how terrible the copper network is. Not to mention the billions spent buying the white elephant coaxial cable network off Optus. For evidence, refer to the NBN corporate report.
As for Robin Hood economics, what do you call Tony Abbotts Direct Action plan? I call that corporate socialism, from a liberal! The mind boggles.
As for the GFC, it happened and the government responce to it got Wayne Swan a tresurer of the year award. The only award a Liberal treasurer has got in the last 35 years is John Howards dubious effort in 1983 with rare triple fail of double digit unemployment, double digit wage growth and double digit government deficit.
As for misogyny, what policies did the former minister for women announce and champion?
Alert moderator
Nell:
02 Nov 2015 5:02:24pm
The Mining Rent Resource Tax could have funded a cut to company tax for smaller businesses-most run by women. It will not apply to the Uranium mining that this government wants to expand or the nuclear industry it wants ordinary Australians to pay for. The Mining Council will not tolerate paying a fair share of tax on the resources that are our common wealth. We get a disproportionately small share after you factor in the cost of rehabilitating our land(where that is possible) and our people (where that is possible). The GST is a tax that has disproportionately adverse effects on women. So yes, expect us to shout out about misogyny. This time we are dealing with both the greedy rampaging right-wing banksters and the left-wing mining unions who have done so well for themselves while the rest of the country has melted down because of the 'resources curse'.
Alert moderator
John51:
02 Nov 2015 5:24:27pm
CP, what happens when we have a downturn in the economy. Consumpton goes down and with it the revenue from GST goes down. The reverse is the same for when the economy is in a growth stage with consumption going up and with it the revenue from the GST going up. This understanding is so well established in economics that to argue differently is an absurdity.
It is also well established in economics that the GST is a regressive tax and it is not for only one reason. There are multiple reasons why a GST is a regressive tax, besides the fact that it hits the poor and lower incomes groups the hardest and there is no simple method of determining compensation for it.
One of the other reasons that the GST is regressive is that it adds to the cost of consumption. You put a 15% GST on everthing does not mean the economy, or if you like spending in the economy is going to go up by that 15%. Most people have a finite amount of money that they can spend in the economy, that is unless they borrow for that increase in spending and that only adds other long-term problems to the economy. We already have the highest level of private debt in the history of this country.
Alert moderator
pilotyoda:
02 Nov 2015 7:15:03pm
CP: you keep talking about the (alleged) blowout of the cost of the FTTP broadband. The Liberal version of Australia's internet infrastructure (dubbed, accurately, as "Fraudband") will end up costing more than the original FTTP all fibre proposal.
In addition, a completely fibre system is almost maintenance-free and has very low operating costs.
What we are about to get instead will wind up costing so much more and then there will be higher maintenance costs and substantially higher operating costs. Couple this with much slower speeds and even more costs to upgrade the last bit when they finally realise they have hit the wall means we will be saddled with a really poor and unreliable piece of infrastructure.
The really dumb thing is that now fibre is cheaper than copper. That is why Telstra was quite eager to decommision the old system for the FTTP fibre system: Not only were they going to be paid to shut it down, they would have been able to sell of the actual copper when it was ripped out.
Alert moderator
Chris L:
03 Nov 2015 2:02:14pm
You would expect Coalition supporters would actively try to avoid mentioning the NBN. It is yet another example where Mr Abbott pledged to do one thing (make it cheaper) and ended up doing the exact opposite (it's even going to cost more to install in the first place... for a far lesser capacity... with far higher maintenance costs).
Perhaps for some people the need to believe is stronger than the constraints of reality.
Alert moderator
John51:
03 Nov 2015 4:16:35pm
Pioltyoda, as you say FTTN of fibre to the node over FTTP of fibre to the premise was always a dumb idea and it was always going to cost more. That was obvious from the get go of when Turnbull and the LNP proposed replacing labor's FTTP with the Turnbull's LNP FTTN. The real dummies are the Australian voters who believed Turnbull and voted for this costly third rate version because we are the ones who are going to be paying for this costly mistake for a long time into the future.
The Turnbull LNP NBN of FTTN was always a political decision to attack the labor FTTP version of the NBN for the base political reason to attack labor's credibility. Well whose credibility is up on the choping board now? Oh that is right it is our now fearless leader Malcolm Turnbull. I wonder how long he will stay Mr Popularity if and when this costly failure gets out in the mainstream media as it should.
Alert moderator
electricrabbit:
02 Nov 2015 5:40:31pm
It's also one that encourages quite simple avoidance: the cash job.
Alert moderator
James In Footscray:
02 Nov 2015 6:48:44pm
If consumption is the 'driving force of the economy', why not just print lots of money and hand it out?
There seems to be something missing in your analysis Gary.
Alert moderator
Econ:
03 Nov 2015 7:14:51am
Consumption is the driving force of an economy, see what happens to an economy when people stop consuming.
Tony Abbott came into power a little over two years ago and in that time he made a heap of mistakes, the liberal party made one mistake, they didn't kick him out sooner.
As for NBN its all a matter of what you believe, we know the LNP was against it from the beginning and so they destroyed it. A system with the capacity of 100 mbs can only do 25 at best and has blown out massively ... the good money managers eh?
The carbon pricing is a good idea and Julia Gillard showed a lot of courage and good sense, neither of which we are likely to see again for at least a year.
Alert moderator
Richard Danks:
03 Nov 2015 1:09:01am
If you earn $4,000 per week you'll not only spend ten times as much as the person earning only $400 per week, you're more likely to have private insurance and send your children to private school thereby paying even more GST. With the various proposed compensations the person on a lower income won't be any the worse off.
The point you make about the GST being regressive is nonsense as was demonstrated when the GST was first introduced. You don't stop buying goods and services if there is a small price differential especially if the other forms of tax are reduced by way of compensation.
GST benefits everyone and will be especially advantageous to the states health services.
Richard
Alert moderator
Greg:
03 Nov 2015 9:27:16am
Regressive as in the person with $400 spends a larger percentage of their money on gst than the person earning the $4000.
Alert moderator
Jane2:
03 Nov 2015 1:16:27pm
Not nessarily. Those on lower incomes spend more of their money (by percentage) on things that are GST free than those on higher incomes.
On a percentage bases, someone on a pension who eats only fresh food, owns their house, buys no "stuff" will pay less to GST than those on higher incomes. It is the "stuff" that kills us and it is mostly avoidable.
Alert moderator
tone:
03 Nov 2015 10:39:59am
Feel free to look up the differences between the terms "absolute" and "relative" :-)
Alert moderator
geggyg:
03 Nov 2015 1:40:08pm
There are a lot of studies online ( many from conservative economists) that show that people earning $4,000 a week don't spend 10 times the amount of someone earning $400 a week. This has been shown since Reagan's " trickle down economics" of big tax cuts for high income earners showed that they didn't spend the tax savings cut saved . However the smaller tax cuts that some lower income earners received were spent on consumption or paying down debt .
Also most workers on $4,000 a week are executives many of whom their companies pay or subsidise thing like private school fees, health insurance and in some cases rent / mortgages ( with company interest free or low interest loans) and they generally have better super/retirement packages that are paid in full even they have totally useless or unethical in their job
Alert moderator
Jane2:
03 Nov 2015 1:19:03pm
"Consumption which is the basic driving force of the economy", only if we were a manufacturer of everything we consume. As we dont manufacture we dont employ people who then earn and spend.
All we do is increase the gap between what we export and what we import to the negative.
Alert moderator
Tabanus:
02 Nov 2015 2:32:52pm
Dear gerard oosterman
It is very hard to design a tax that does not have some bad side effects. Possibly death taxes are the only ones that work.
But the GST, contrary to Mr Potter's article, has a major flaw. It is efficient (it raises a lot of money for little gov't expenditure) and effective (most of what is caught is actually collected). It is not however very fair, and it is open to abuse and corruption. As it is easy to avoid, it also encourages a mood that tax evasion is not only OK, but necessary.
The other problem it has is that it does not meet today's demands.
The GST is a tax devised 60 years ago for an economy very different than today. We should be looking for a replacement, not to simply ratchet it up.
PS Headlines stating "Increased GST to raise $X billion" are meaningless. Any increase of any tax would raise billions. Should we increase income tax by 50% it would raise even more. That our media repeat such claims shows how pathetic the "debate" and the level of knowledge are.
Alert moderator
macca:
02 Nov 2015 2:48:28pm
Last time the GST came around I had to employ a person to deal with the paper work - good for the government and the person getting the job but it had a very negative effect on my business.
never trust a government with more taxes.
I may not like Bill but on this one he will get my vote!
Alert moderator
Captain Jack:
02 Nov 2015 8:31:47pm
If you think Labor won't be trying on an increase in the GST if they were somehow elected your deamin'.
These mainstream governments just need more and more tax to run their bloated and inefficient bureaucracies.
And buy support with middle class welfare.
It is time to seek indeendent representaives that wil give us Citizenens Initiated Referendums on major issue like more Taxation.
All we have now is an illusion of democracy.
Alert moderator
peterwalker58:
03 Nov 2015 7:47:01am
bloated and inefficient? Really? I am certain everyone can point out a screamer in waste A couple of good ones I know of
Perth airport investigated a 3rd runway Estimated cost $500M BHP and RIO TINTO offered to do it for $50 million They both have the necessary experience after building a few It quietly faded away
The South West rail extension to Narellan takes out a Bunnings and ~100 houses Maybe $1B in compensation Just down the road 50 k away will be 4 tunneling machines sitting idle Cost? $500M
Alert moderator
RealReformForAustralia:
02 Nov 2015 2:42:25pm
Tax is not good, it is a much over-used evil. Tax does not allow our kids to go to school - it is a highly productive economy that allows us to be able to house, clothe, feed children and the teachers and others who provide services that enables kids to go to school. Knee constructions are made possible from the high technology that is developed through private enterprise. .... Australia should not blindly follow the actions of others!
Alert moderator
GreyBags:
02 Nov 2015 7:33:31pm
Realreform?
You spout the benefits of things funded by taxation yet claim taxation is bad. Where would the money come from otherwise? The munificence of the great and greedy? All those companies spending countless hundreds of thousands of dollars for clever tax accountants are suddenly going to fund schools and hospitals. Multi-millionaires that has structured their wealth so that they already pay zero tax are suddenly going to give two hoots for society?
Obviously more tax money needs to go into basic education if you can happily claim that black is white. Hope your parents didn't waste their money on a private education.
Alert moderator
pilotyoda:
03 Nov 2015 7:57:49am
I don't know where to start so I will go with knee replacement technology. While true that the prosthetics are manufactured by "private enterprise", these are large specialist companies and the bar to entrance to this industry is very high. But to exist the depend on medical teams specifying the requirements and doing trials, then training surgeons how to do this.
These trials and the training of surgeons occur in the public hospital system - paid for by tax.
Then the hospitals, supported by taxation incomes, purchase the device. Even private hospitals pay, using income from taxation - medicare and private insurance (subsidized by the taxation system) - for the devices.
If it wasn't for the bulk purchasing by hospitals around the world then the companies making such products would not have a market big enough to make their product affordable and profitable.
Without taxes, war would still be hand-to-hand fighting. Ah, I think I will stop there because this is something I would like to see. If we all stop paying tax most wars would disappear, or at least become so localized they would not affect the rest of the world. "Sigh".
Alert moderator
maddog:
02 Nov 2015 2:49:16pm
The increase in the GST is a tenth order issue. Sort all the other freebies first, family trust, CGT and negative gear is one issue not two, super concessions the list goes on. The only people how want an increase are not think to hard about it.
Alert moderator
Dazza:
02 Nov 2015 3:15:15pm
"We should march in the street and welcome GST increase. Most OECD countries have higher GST rates than us."
Don't really care what other countries have!
The GST was another little Jonny Howard brain snap that didn't achieve the objectives it was supposed to.
All it did was make everything more expensive while the "compensation" regressed because of inflation, unless you were one of Jonny's rich mates that benefitted from high income tax cuts!
"...march in the streets...."?
Jonny nearly lost the 1998 election for his GST election campaign!!
Alert moderator
Macca 9:
02 Nov 2015 6:05:19pm
Hey Dazza -The GST made" everything more expensive?" did it?. Sorry mate, but you are really showing either your ignorance or dishonesty with that statement. Am I the only person in Australia who is aware of or remembers the previous system of Wholesale Sales Tax which taxed goods at 12,22 and 32 percent depending on the item? Many items actually became much cheaper.
Alert moderator
Dazza:
03 Nov 2015 9:22:41am
"Sorry mate, but you are really showing either your ignorance or dishonesty with that statement. Am I the only person in Australia who is aware of or remembers the previous system of Wholesale Sales Tax which taxed goods at 12,22 and 32 percent depending on the item? Many items actually became much cheaper."
Which items became "cheaper"?
Only those that were non-essential! You know, the stuff that you wouldn't buy week after week!
The plasma TV, (being a good example of Liberal supporters and their whinge about the stimulus) actually became cheaper, but did you buy one every week?
Of course you didn't, but certain essential items became more expensive, even those that didn't attract a WST previously!
So my statement stands correct, even though my typo concerning "everything" was just that, a typo!!
Alert moderator
Greg:
03 Nov 2015 9:35:44am
A few things like luxury cars, caviar, and other assorted rubbish had high WST. The majority of normal, everyday items had less than 15%
Alert moderator
The Sandabgger:
03 Nov 2015 10:14:01am
So therefore the majority of normal everyday items be me cheaper.
Alert moderator
the yank:
02 Nov 2015 3:31:24pm
It all depends on what part of this elephant the blind person is touching.
Yes we need taxes to do the things we want government to do; educate, build infrastructure, health and so on but some taxes do it in a more balanced manner and some are harder to avoid and therefore bring in more money.
So I'd Michael is correct, over all. Whether or not changes to the GST will hurt or help depend on how it is constructed and which other taxes are altered to deal with those changes. And until we actually see what is on the table we are just blowing bubbles.
So Turnbull and Labor what are your tax changes going to look like?
Alert moderator
Old_Wombat:
02 Nov 2015 3:53:13pm
As I side issue... Every single time you start a sentence with something like "The Government should..." then you are always, always, always, asking to pay more tax. Even more importantly, that also goes for "The Council should" and rates. Always. Every single time. Truly a rule with no exceptions.
Alert moderator
Incognito:
02 Nov 2015 4:39:28pm
'The government should reduce taxes'.
How was that sentence?
Now we do not need increased tax rates or to raise the GST.
WE JUST NEED TO ENFORCE THE CURRENT TAX RULES AND STOP THE RORTS (close loopholes).
Sorry for shouting - but people keep missing the point.
Alert moderator
buckettea:
02 Nov 2015 6:11:01pm
+1
there is a reason the gap is getting wider, the taxation policy should ensure there are not the largesses we see today while people go hungry.
unfortunately, every politician is s%&t scared to go anywhere near it.
Alert moderator
Chubblo:
03 Nov 2015 11:50:39am
Which is of course is made more difficult by the LNP downsizing the ATO by what was the number...4,000 employees?
The ATO is the one department of the government we SHOULD be pouring more money into.
Alert moderator
the yank:
02 Nov 2015 5:21:03pm
I didn't use the word should in fact I also rankle when people use the word should though I suspect I fall victim to using it at times myself.
What tax money is used for is defined by those we vote for. The general assumption is that if you vote Labor you vote because social issues are important to you, voting the LNP supposedly benefits business and the wealthy.
It doesn't always work out that way but in general it holds true. Now my feeling is that Turnbull won't follow the LNP rule but like I've said I'll wait until I see the whites of his eyes.
Incognito no need to shout. Yes we know that getting people to pay their taxes by enforcing the current tax rate is the core issue. I think that is part of the reason the LNP is pushing for a GST, they think it will be easier to enforce. I am not too sure. I've seen too many cases of people avoiding that tax to believe in its benefits.
As for the wealthy, multinational companies and just about every other level of business they pay big money to avoid paying tax the question is always how does one close all loop holes and what is a fair level of taxation. I suspect if we didn't have so many ways of avoiding tax AND made the tax levels lower we'd collect just as much tax as we do now, but I am not an accountant.
Alert moderator
Dugong:
02 Nov 2015 3:55:13pm
Sigh.
OK, here we go: let's say that Australia implemented a tax that taxed only Dutch people living in Australia. After all, Dutch people are famous for being hard working and thrifty: they could certainly afford it.
A good tax, by your definition.
But it would take time and effort to identify those who are Dutch. The cost of doing so would reduce the eventual tax take. In the great scheme of things, there aren't that many Dutch people living here, so the amount you could collect would be limited. A percentage of Dutch people might take steps to hide their "Dutchness" (this is in no way a slur on the Dutch: it is merely a comment on human behaviour). Such behaviour would take time and resources to uncover - this comes at a cost, reducing the efficiency (how much $ collected divided how much $ spent in the collection of the tax). It might also somewhat annoy those who are Dutch (yourself excluded, of course) as they would be paying a tax that others would not.
An ideal tax (I'm not saying there is one) would be easy to implement and cost little to maintain, while having no adverse (ie unintended) consequences.
The GST is not perfect, and politics has made it less so. But I am unconvinced by the argument of the author that replacing bad taxes with less-bad taxes is itself a bad thing.
Alert moderator
Martin:
02 Nov 2015 4:14:49pm
Voluntary donations tied to ring-fenced spending - that is the 'perfect' tax. If you want the leach (large=federal, medium=state or small=shire) to spend money on x (insert hospitals/refugees/wars/mps super etc) then feel free to donate to it. If they abuse it then you stop donating. If you want more spending you donate further funds. There really are very few downsides; especially as we already have a huge 'free rider' problem with the current system.
Alert moderator
No Time Like The Future:
02 Nov 2015 5:57:11pm
Good one Martin. That sounds like it would work.
People won't even pay when it's compulsory. That's the freerider problem you mentioned.
Would you volunteer? right.
Alert moderator
JohnnoH:
02 Nov 2015 6:22:52pm
Surely you jest? The GST is less flawed than other taxes? The one tax that hits the less well off than more any other tax and you say it is less flawed. It is typical tory to slug the poor to pay for political misdeeds. There is plenty of scope to cut unfettered spending, such as the F35, before attacking the low income earners and pensioners. Then there are those socialist taxpayer funded subsidies such as the diesel fuel subsidy for the miners, and the subsidy for high income superannuation.
Alert moderator
Jethro:
03 Nov 2015 8:50:02am
What planet are you from? Certainly not one with hopeless pollies whose only mantra is "what's in it for me"/
Alert moderator
James in Brisbane:
03 Nov 2015 9:53:38am
The author is from the 'Centre for Independent Studies', which is a right-wing think tank (travelling partner to the IPA), so you need to read the article through that particular lens - which is why he bangs on about company tax, but not income taxes.
Alert moderator
whogoesthere:
02 Nov 2015 1:26:45pm
Australians seem to want Governments to do pretty much everything for them. Provide a first class health system, education system, welfare system, child care system. Fix the drug problem, fix domestic violence, cut the road toll, build better roads. Build more/better public transport. Stop terrorism, stop crime, promote good health build infrastructure, and on and on and on.
Yet, no-one wants to pay for it, they want it all for free, with 'someone else' paying. Well life don't work like that. The 'rich' are not an endless supply of free money. So sure, try and rein in some of the scams the mega rich use to pay less tax, but that won't pay for everything.
You want all the good stuff, we all have to pay more tax, simple as that.
Alert moderator
RealReformForAustralia:
02 Nov 2015 2:44:51pm
No! It is not that simple!
If we want more stuff, then production and productivity need to increase. That means we need more efficient businesses, and less government interference. Clean out the shonky business people and their associated parasites. But no more taxes!
Alert moderator
Crow:
02 Nov 2015 3:23:04pm
"But no more taxes!"
even though we are a low taxing nation?
You are welcome to your Libertarian ideas, but Ive yet to see a nation provide services the people want without the revenue taxes provide. Perhaps you know of a country that taxes less and does it better (without the poverty and crime that come from the Govt not providing).
Alert moderator
Crow:
02 Nov 2015 3:23:05pm
"But no more taxes!"
even though we are a low taxing nation?
You are welcome to your Libertarian ideas, but Ive yet to see a nation provide services the people want without the revenue taxes provide. Perhaps you know of a country that taxes less and does it better (without the poverty and crime that come from the Govt not providing).
Alert moderator
Morestone:
02 Nov 2015 4:49:48pm
RRFA
Its nice to see some comedy on The Drum in addition to Ben Pobjie. Most posts are far too serious.
Alert moderator
mary:
02 Nov 2015 2:50:24pm
Speak for yourselv!
I would love the government step back and let me do things the way I could in the past. Tried to build a house? tried to start a food business?
Alert moderator
the yank:
02 Nov 2015 3:37:25pm
Yep and buy your own fighter jets, subs, mega data collecting, black shirted secret police and overseas travel for our pollies so they can spruik their achievements etc..
The reality is nothing comes without a cost. To help determine where the money is spent and how much is collected we have elections. so right now we are commenting on an issue that is only sitting out there on the sidelines. Personally I have no idea if I would support a rejigging of the tax system until I actually see what is on offer.
Alert moderator
billyBoB:
02 Nov 2015 6:12:36pm
ahh the common short sighted desire fore minimalist government,
All that pesky government intervention
Have you recently....
been killed by a stratcual failure,
or died from food poisoning?
No? Darn government interference in our freedom
But But but with the free market
and the delusion of perfect information
demand for companies taht kill people will go down
and the magical market will allocate resources away from dodgy operators...
so only the unlucky first few will die
or perhaps being forced off your proerty and gunpoint?
having the bank suddenly steal or your savings?
without pesky government interventions,
the red tape of law and order these could be real possibilities
Alert moderator
Mark of SA:
03 Nov 2015 7:18:41am
"tried to start a food business?" No, but I have been poisoned by two over the years. Does that count?
Regulations are a pain when we are trying to do what we want, but they are good when they protect us from others who are doing what they want.
Alert moderator
buderimboy:
02 Nov 2015 2:56:01pm
yep the great gravy train we all aspire to be on
This is what I would like our tax dollars to go to
- World class health care FREE
-Quality FREE state Education to year 12
-Subsidised University and trade schools for school leavers
-a good DEFENCE force
-enough police and prisons to make a safe society
-FREE vital medication
And what I don't want it to go to
-overseas wars
-overseas AID to dictators
-politicians
-dole bludgers
-bloated civil service
-waste
Alert moderator
Gordon:
02 Nov 2015 3:37:22pm
But, old buderimboy boy, everything you listed above is what produces everything you listed below - with the possible exception of the overseas wars and the dictators, which frankly are small beer in the scheme of things.
Alert moderator
nrh:
03 Nov 2015 8:51:15am
you forgot tax avoiding wealthy leaches and unscrupulous organisations who shift their profits overseas, wealthy superannuants to name just afew!
Alert moderator
lazarus:
03 Nov 2015 10:24:43am
As Howard found you actually need public servants if you want to provide public services. The size of the public service went from 110000 when he pruned it in 1996 to 165000 when he left office in 2007.
You can get rid of the dole but you may need a lot more police because you have done so, the "dole bludgers" are still going to need to live somewhere and feed and clothe themselves. Without Government support some of your possessions may be needed to help accommodate, feed and clothe these bludgers.
Alert moderator
GregL:
02 Nov 2015 3:14:39pm
You have hit the nail on the head. We are continually being told by those involved in the political world and the media that we pay too much tax. You would think that we are the most highly taxed nation on earth sometimes but by international standards we are mid ranking at worst and this is rarely explained as it hits the narrative of the ruling elites who by the way can structure their affairs to reduce their tax whenever they choose.
GST 's are more efficient form a Government perspective and they do catch a lot of revenue. But they are regressive when applied to food and the basics of life as well as education and health. They are open to exploitation and are exploited particularly by those people that can. Anyone who owns a business has no trouble in reducing their GST simply by claiming many personal bills as an input. Again those that can and willing will and here are a lot of those people around. Simply accepting a tradie to do a job for cash at a lower rate than an invoiced job implicates everyone in the transaction in tax avoidance.
Rest assured the GST will increase. But any increase should only be used to pay for services not tax cuts.
Alert moderator
Dazza:
02 Nov 2015 3:21:46pm
"You want all the good stuff, we all have to pay more tax, simple as that."
No we don't!
You can get around that problem by making everyone pay their fair share of tax.
All this talk lately of tax evasion by corporations?
Why should we, the common taxpayer, pay more tax to compensate for their dodgy dealings?
Alert moderator
whogoesthere:
02 Nov 2015 4:06:51pm
Tax wise, the big multi nats can beat Governments. Until all the myriad of Governments in the world can work together (ie never), the multi nats will pay little tax in countries like ours.
Completely unfair, but that's the reality.
Alert moderator
Mulky:
02 Nov 2015 5:57:10pm
What we need is sharing of corporate tax information between countries. Flat taxes on gross earnings for transfers to known tax havens. Really, all developed countries want to get this resolved so it shouldn't be hard, citizens are happy to see their governments to after this stuff so there is even votes in it.
Putting something so manifestly unfair into the too hard basket is self defeatist. We need to push for business to pay its way. Australia provides a safe and educated country to operate with reliable infrastructure and a relatively wealthy consumer base. Companies need to pay to a access what we have.
Alert moderator
Dazza:
02 Nov 2015 6:58:24pm
"Completely unfair, but that's the reality."
So, how does that answer my obvious question?
I'll say it again:
"Why should we, the common taxpayer, pay more tax to compensate for their dodgy dealings?"
If anyone has an answer, then I'm willing to listen to a commonsense solution!!
Alert moderator
should be working:
02 Nov 2015 3:31:09pm
well in fairness, if they increase the GST to 15% and put it on pretty much everything, the government might have to do everything for us because nobody will be able to do anything for themselves!
it is counter productive to increase tax so much that people feel poor because of it. Poor people don't spend money and the GST only makes money if people spend money!
Alert moderator
aka Alias:
02 Nov 2015 5:53:29pm
What rubbish!!
Average Australians pay income tax and GST on most goods and services. We also pay tax at almost every turn whether it is to receive or update a drivers licence, register a car, take a toll road, apply for a passport. We have more taxes in this country than politicians which is a big call.
GST is given to the states which is the crux of most of the problems with it.
To fix the tax system in this country does not mean to raise more tax it means:
- fixing up the distribution
- closing the loop holes for tax avoidance; everything from negative gearing to off shoring assets generating income
- get serious about the big end of town and stop the rorts
Government after government after government have failed to deliver anything other than a band-aid fix without going after "real" reform.
We can have everything you mention whogoesthere it just needs to be funded fairly and that means the big end of town changing their attitudes for a start.
I am sick if hearing people like having a go at your countrymen and neighbours as wanting it all but not wanting to pay for it. Rubbish.
PS defence and immigration spending are two
Alert moderator
Dugong:
03 Nov 2015 9:50:33am
"Average Australians pay income tax and GST on most goods and services"
aka Alia, I can guarantee that you pay absolutely no income tax on goods and services.
You pay income tax on taxable income.
You pay Goods and Services Tax on good and services.
Alert moderator
aka Alias:
03 Nov 2015 11:45:13am
I missed a comma after tax. Aplogies.
Alert moderator
GreyBags:
02 Nov 2015 7:42:59pm
"The 'rich' are not an endless supply of free money"
No they are not. They can afford expensive accountants and as such do not pay their fair share. A large number of multi-millionaires have so structured their funds as to be able to claim an income below the tax free threshold.
The rich are not an endless supply of free money or of a supply of their fair share of tax. The rich suck money out of the productive economy. Parasites and rentiers. Trickle down is a right wing lie (amongst their many and varied lies that substitute for evidence based policies).
I want to know what right wing governments are going to do for money when there are no more public assets to flog off to their corporate mates and all workers have to spend their entire pay packet to just keep a roof over their heads and food on the table and have no discretionary spending. Howard sold off $74 billion in assets and left stuff all in the kitty. Most profligate government in Australia's history. The current mob make him look good.
Alert moderator
Alpo:
02 Nov 2015 1:26:56pm
When somebody from a right-wing (Neoliberal/Libertarian) think-tank argues against a raise and expansion of the GST.... then the idea is dead, buried and cremated.
Given that the Coalition Government has no other policy to increase government revenues, then it's time to change Government!
Pretty simple and straightforward...
Alert moderator
padawan:
02 Nov 2015 2:33:21pm
So what is your answer to increasing revenues?
Alert moderator
may:
02 Nov 2015 2:51:33pm
How about less generosity for Super, no tax incentives for speculators, tax churches and unions...
Alert moderator
Alpo:
02 Nov 2015 3:14:03pm
Some ideas:
- Shut down loopholes that allow Multinational companies to shift profits overseas. This will increase Government revenues by not less than $1.9 billion. A new legislation prepared by the ALP specifically plans to tackle the arrangements that currently allow Multinationals to claim tax deductions.
- Give more powers to ATO to pursue such Multinationals.
- Tackle the issue of hybrid structures used to reduce taxes.
- Stop such Multinationals from double-dipping on opportunities for tax exemptions and also deductions. This includes new limits on the amount of company debt that can be claimed as a tax deduction.
- Introduce a "Buffett tax", involving a minimum tax rate beyond which individuals cannot reduce their exposure with tax deductions.
- Boost resources for the Australian Taxation Office to ensure it has enough staff to do their job.
..... and this is just the tip of the iceberg!
Alert moderator
Biggles:
02 Nov 2015 3:57:57pm
1.9 billion is a drop in the ocean. A raise in the GST is required as we are not collecting enough tax for our western European lifestyles.
Alert moderator
OUB :
02 Nov 2015 4:18:35pm
No use changing governments when Labor had the chance to follow your prescription and passed on the opportunity Alpo.
How about a prohibitive tax on bloggers that outstay their welcome? Should be big bucks in that. Of course I may never post again.
Alert moderator
Alpo:
02 Nov 2015 5:00:31pm
"How about a prohibitive tax on bloggers that outstay their welcome?".... Can you afford that tax, OUB? I would hate losing you from the Drum.
Oh, BTW, when in Government last time the ALP introduced the revenue-raising MRRT and everybody on the right-wing of the spectrum went completely nuts, following the lead of Tony Abbott..... Now it's time that they sober up, don't you think?
Alert moderator
OUB :
02 Nov 2015 7:17:43pm
The revenue raising MRRT? Stop it Alpo, my sides are aching. If only they hadn't assumed the supercycle would last forever and promised to spend the money on long-term programs. And if only they had actually raised some money.
Alert moderator
SilentCastaway:
02 Nov 2015 9:03:23pm
'the revenue-raising MRRT'. Surely you are not referring to the greatest joke of a tax in history - the MRRT that cost more to administer than it ever raised?
Alert moderator
Mossman Mal:
03 Nov 2015 2:38:03pm
when the grab steal and take was introduced the government of the time [liberal]was supposed to remove or reduce pay roll and income tax but their avarice got the better of them. the mrrt was no good as the people that pay for the liberal party told them so
Alert moderator
GreyBags:
02 Nov 2015 7:51:08pm
Also a Tobin tax on all financial transactions including share trading etc. As a side bonus, it would stop the insanity of most trades being performed by computer programs chasing tiny rates of arbitrage.
Imagine people investing in companies because they have researched them and believe they will provide a reasonable rate of return on your investment? What a radical concept, investment not speculation. Should appeal to the right wingers.
Negative gearing only increases speculation in second hand goods such as existing shares and real estate. What sort of idiot wants to artificially inflate the price of second hand goods? How is that 'productive'?
Alert moderator
Alphamikefoxtrot:
02 Nov 2015 3:31:06pm
Labor's answer? Carbon tax...nope that didn't work. Mining tax....nope. Try taxing business to death and stealing everyone's superannuation! Yes, that's it!
Alert moderator
Terry:
02 Nov 2015 3:50:07pm
They would of been working wonderfully if they weren't stopped by Abbott.
We would be using an emissions trading scheme right now, and with the mining boom ended, we would of had some funds for the non mining economy going ahead.
$8 tax paid for every $600 earned in Australia by the big multinationals, but the current government would rather shake down the people that can least afford it, those who cant pay $20k to get the Treasurers ear, those who cant make rather large donations to the LNP to get their own way.
Seeing as The Liberals want to tax individuals to death, and Labor wanted the superannuation increased to 12%, its a wonder how you can draw conclusions that Labor want to steal everyone's super, when the Liberals refused to support a rise in super!
Alert moderator
Tom1:
02 Nov 2015 4:12:42pm
Foxy: They did work. The hit the Coalition's constituency and that is why Abbott and Hockey were dead against them. The mining tax worked even though it raised little. That was the idea, it was a tax for times of excess.
To be against the carbon tax you had to be a global warming denialist. To be a knifed leader of the opposition you had to believe in man made global warming, and want to do something about it.
Labor does not want to steal someone's superannuation. It only wants the good life these privileged people are living not to be at the expense of the poor. (An exaggeration on your part, counteracted by an exaggeration on my part.)
Alert moderator
GreyBags:
02 Nov 2015 8:02:38pm
The changes from taxing polluters to paying polluters is costing $7 billion a year. Not enormous compared to the entire GDP but better than slugging the poor. Unfortunately kicking the poor in the guts is a right wing sport. They do it purely for the entertainment value.
The MRRT had accelerated depreciation as part of the agreement. Not much tax was collected as the companies were depreciating all their equipment. Just when the tax was about to reap rewards because everything had been written off, the Coalition axed the tax. This is either blind stupidity or calculated bastardry to continue to help make their rich mates richer. The original RSPT was better.
The ignorance of right wing supporters of the Coalition in matters economic is astounding. Their creative rewriting of history would suggest most of them took an arts degree and not a business degree, except that most people who took an arts degree are actually rational and can tell fact from fiction.
Alert moderator
bettysteve:
03 Nov 2015 8:57:31am
7 billion? that is less than the annual profits from Telstra before jackboot johnnie sold it to his mates.
Alert moderator
a happy little debunker:
02 Nov 2015 4:04:16pm
Alpo's solution is to 'soak' the rich. As generally defined as everyone that earns more than him.
My solution is to spend less - employ less bureaucrats, middle men & public servants - pay less for pollies, figure out what you must afford society and only collect as much as needed.
The easiest 'savings' to find - is the money you do not actually have too spend.
Tax reform is now the simpleton's code for increased taxes - & who here thinks governments spend our money so well - that we should allow them to take more?
Take nice Mr Scott - fearless leader at their ABC. He had a minor budget cut supposedly to come out of back-office reforms.
What did nice Mr Scott do? He cut regional services & further setup a 'hunger games' amongst Journalists and then publicly blamed the government for forcing it to cut the services.
Months later he enjoyed an international spendathon (tens of millions of dollars) in launching a portal into China (for expat Aussies already making a mozza there).
Had Nice Mr Scott turned his mind to only spending what he could afford, services in SA (pop est 1.6 million) and other regional areas would not have been cut - in favour of spending on expats in mainland China (pop est 13800).
Alert moderator
Alpo:
02 Nov 2015 4:48:59pm
a happy little debunker's solution is to bleed the poor and the middle class to the limits of their endurance... in the expectation that somehow they will find a way to survive and adapt to the new conditions of increased costs of life (due to a raise and broadening of the GST) and decreased public services.
Alert moderator
a happy little debunker:
02 Nov 2015 6:51:36pm
I have always been opposed to a broad-based consumption tax - for it's inequity in application.
I always strongly supported Brian Harradine, voting not just because of his inherent conservatism - but that he was a principled man of his own conscience.
For shame he (from the grave) is still being subjected to ridicule and intolerance from the left of politics - despite his displayed humanitarianism in relation to the GST.
Alert moderator
Tom1:
03 Nov 2015 9:12:41am
Brian Harradine voted in accordance with the dictates of his church. We will see if Turkey is a better country now that the PM has been reinstated, and is free to to deliver policies in accordance with the dictates of a different religion, as has been his wont.
Alert moderator
SilentCastaway:
02 Nov 2015 9:04:47pm
'bleed the poor and the middle class to the limits of their endurance'. Mate, that's the ACTU motto!
Alert moderator
Alpo:
03 Nov 2015 9:11:31am
Silent, what would you know about the ACTU?....
Alert moderator
Optimist:
02 Nov 2015 1:26:58pm
I agree. The compensations will eat up the extra revenue.
Alert moderator
JoshRCole:
02 Nov 2015 2:06:41pm
Then don't provide them, the whole concept of revenue raising is just that. People expect a magic fix where they always get more but only ever pay less, it's childish and oddly the kind of childish you see pedalled by conservatives claiming to have the mature high ground on matters of finance.
Alert moderator
spacey 101:
02 Nov 2015 7:40:53pm
Ok. So we already have people living beneath the poverty line. Fact.
Lifting GST will then make the problem worse. Fact.
The consequences of people not having enough to eat and unable to put a roof over their heads is an increase in lawlessness. Fact. Just look at the US and every single 2nd and 3rd world country.
I find it amazing that in one of THE wealthiest nations on earth we have people living on the streets and people hell bent on opposing closing down tax loopholes that benefit in the main those who do not have to go without a single damn thing.
Alert moderator
Tator:
03 Nov 2015 11:20:45am
Spacey,
Because of the way the poverty line is calculated, there will always be people below the poverty line as it is all relative to average incomes.
Alert moderator
Son of Zaky:
02 Nov 2015 1:31:40pm
"And of course, increased subsidies mean less money for cutting flawed taxes like the company tax (apologies for sounding like a broken record)"
Apology accepted - although that in no way changes the fact that you ARE a broken record.
If nothing else, I'm sure many will take what's written here as proof that your closing "scepticism" line is a good one - possibly even regarding the 11 times you've used the terms "flawed" and "flaws" without bothering to supply any justification.
Perhaps also even regarding the fact that a "research fellow" contribution like this one appears to be little more than a long whinge about things not being to your liking, and yet contains no input has to what you'd like otherwise. Some article - reads suspiciously more like a water-muddying exercise to me.
Alert moderator
GreyBags:
02 Nov 2015 8:13:36pm
The CIS are financed by the rich and powerful to produce propaganda that benefits the rich and powerful. They are an advertising and PR agency, not a think tank.
Alert moderator
ben:
02 Nov 2015 1:48:23pm
"The Assistant Treasurer Kelly O'Dwyer has said the government does not want to increase the tax burden on Australians."
So, NOT INCREASING the tax burden will be achieved by INCREASING GST.
Am I missing something, or is increasing GST increasing the tax burden?
Maybe Asst Treasurers have a different way of processing data.
Alert moderator
Tom1:
03 Nov 2015 9:27:31am
To be fair ben she still has her training wheels, and probably cannot see the inconsistency in her statement.
Why not tackle the obvious inequities in the tax system, like the superannuation concessions that have nothing to do with a reasonable living standard in retirement, multi nationals etc. and then perhaps look at a very small increase in the GST of one or two percent, with a correspondingly smaller compensation package?
A 5% increase is going to be very difficult to compensate for, particularly if it is on food, medical services education etc.
I do not think that the Government for all its talk has the "Courage" (The Yes Minister type) to raise the GST to 15% and include everything.
Alert moderator
Dove:
02 Nov 2015 1:51:00pm
Tax what I earn or tax what I spend. Please don't do both. Watt Tyler rose up for less than this
Alert moderator
NGP:
02 Nov 2015 1:51:30pm
"Assistant Treasurer Kelly O'Dwyer has said the government does not want to increase the tax burden on Australians." What then is the point of raising the GST?
Unless it is revenue neutral someone is going to have to pay more. As the article demonstrates, because lower-income groups pay a higher percentage of their income on goods and services they will again shoulder the burden.
I'm particularly concerned about single income families hit by disability and illness who earn just enough not to be entitled to welfare. Families earning less than $50k per year will be devastated by higher GST unless measures like splitting incomes for tax purposes are introduced in parallel. Averaging incomes might also work as an incentive for second-wage families up to say $100k.
Alert moderator
Billt:
02 Nov 2015 1:52:52pm
I cannot see any change to the GST. It needs just one state government to disagree with any increase, to stymie it. Reactionary governments will always try and increase taxes on the lower income persons, which is what a GST does, so that they can make the already wealthy, wealthier. Marx is correct in regard to taxation: "from those according to their means, to those according to their needs". A great egalitarian equaliser.
Alert moderator
Yorker:
02 Nov 2015 3:37:00pm
No, the states don't have to agree, just both houses of (federal) parliament.
Alert moderator
Alfie:
02 Nov 2015 1:52:58pm
The answer is simple, cut the compensation.
The GST is a fair tax - everyone pays according to their spending.
Alert moderator
Son of Zaky:
02 Nov 2015 3:01:22pm
I suspect you typed "answer" when what you meant to type was "answerer".
Alert moderator
Crow:
02 Nov 2015 3:24:11pm
and it hits the poorest hardest. the very definition of regression. hardly a 'fair' tax.
Alert moderator
Gordon:
02 Nov 2015 3:49:49pm
Actually, the poorest pay no other tax, spend a lot of their income on GST exempt food and rent and are funded through significant chunks of other expenditure via heathcare cards, transport concessions etc, and along with the rest of us stand to benefit hugely from better funding of public schools and hospitals. Welfare payments were specifically increased last time to cover the GST impost, and every indication is that they would be again. The entire point of a GST is that is spread evenly. This whole "find someone else to pay" mentality is the reason we are in this mess in the first place. Yes there are tax fiddles to be cleaned up first, but they don't add up to enough.
Alert moderator
Son of Zaky:
02 Nov 2015 4:14:03pm
I don't actually disagree with anything you've written, but you haven't addressed Crow's point - namely that the HARDEST impact amongst all those impacted is felt by the poor. A question of degrees in other words, not a yes/no question.
And seeing as poverty is something we already pour money into to try and alleviate and/or mitigate, I'm struggling to see how making poor people poorer in order to satisfy some sort of "spread it evenly" notion, and then throwing dosh at the subsequent problems created, makes any sort of holistic sense.
"The poor" aren't simply another cohort who need to be integrated into a societal mix of taxpayers, they're actually "poor" (that's why the term was coined). There's something just a little bit wrong (in my view at least) with lining-up corporations, millionaires and "the poor" on the same page and divvying-up the responsibilities - if the object is supposed to be that societally we don't want to have "the poor" in the first place.
Alert moderator
spacey 101:
02 Nov 2015 7:44:01pm
I have to agree with you Zaky.
It seems amazing to me that we have families in Australia who struggle to put food on the table.
We have other families who can provide their families with every human need (and want) several times over.
Yet we arguing about the fact that some pay more than others in tax.
It boggles the mind.
Alert moderator
the yank:
02 Nov 2015 7:59:21pm
"poorest pay no other tax," ... is that like the poor don't own cars so an increase in the petrol tax doesn't impact on them?
Alert moderator
Tator:
03 Nov 2015 11:23:42am
If the poor receive more in cash benefits than they expend in GST, then they pay no net taxes. Simple mathematics, as taxpayer funded benefits cannot be treated the same as earned income by a wage earner or passive income by an investor.
Alert moderator
anurse:
03 Nov 2015 12:19:15pm
Wage earners can be poor. Not everyone who is poor is on Centrelink.
Alert moderator
Tator:
03 Nov 2015 2:30:51pm
Not too many wage earners are poor. Single on minimum wage earns more than the Henderson Poverty line requirements. Nearly everyone else who earns less than that receives Centrelink benefits in one form or another.
Alert moderator
anurse:
03 Nov 2015 5:47:17pm
I suppose the view of who is poor depends on one's experience. I see quite a few wage earners, single & families who are poor-serious illness tends to have an adverse impact on wealth of lower end wage earners. And also middle income earners come to think of it. Serious illness can drive people into poverty.
Alert moderator
ThingFish:
02 Nov 2015 4:14:20pm
"The GST is a fair tax"
The GST is a regressive tax.
The GST is a hopelessly inefficient tax, unless you are the ATO.
The GST has been a drag on Australia's productivity since it was introduced.
Increasing the GST will directly decrease GDP and flow of real money through the wider economy.
Alert moderator
rusty cairns:
02 Nov 2015 7:02:53pm
Gday ThingFish
Can I just add that Any increases in the GST will mean years of calculations to work out the compensation needed and when it is worked out properly there will be another call to increases the GST.
I don't understand the argument that we have to provide the same services with the same tax to GDP ratio when it is well known that "more" people are going to be getting old age pensions for a "longer period" because we are living longer.
I ask what is wrong with letting our tax to GDP go above the average level if the average level of government spending to support our old aged is rising ?
Alert moderator
ThingFish:
03 Nov 2015 7:16:41am
"I ask what is wrong with letting our tax to GDP go above the average level if the average level of government spending to support our old aged is rising ?"
There is actually a very cogent argument that says that our tax to GDP SHOULD go above the average level if the average level of government spending to support our old aged is rising
Alert moderator
Mossman Mal:
03 Nov 2015 2:52:34pm
If the liberal party had let the super go to 15% like originaly proposed we would not have to support the older population so much but they had to stop the poor being able to look after themselvesas the big end of town was losing gross profit
Alert moderator
Desert Woman:
02 Nov 2015 2:00:46pm
One of the major flaws in all tax and income arguments is that money, or more of it, is required to provide an incentive to work.
The facts from years of empirical data are these:
- people need money in order to eat, live and get ahead
- once people have a job which provides comfort, more money will not make them work harder. i.e. it is not really a source of intrinsic motivation, only an extrinsic motivator
- if people are paid inequitably or not enough, they will be dissatisfied and lose whatever motivation they have
- there is a known set of intrinsic motivators which keep people working regardless of whether income is increasing
- if this set of motivators is lacking, more money will not compensate for it.
This picture is matched by the complementary picture concerning money and 'happiness'. It is about time our policy makers looked at the data instead of pushing empty theories.
Alert moderator
sleepykarly:
02 Nov 2015 4:09:05pm
You are absolutely correct, DW. Experimental work in the Social Sciences has proved your case repeatedly over the last fifty years.
But economics, specially neo-con economics, doesn't bother itself with empirical data. It works off assumptions first imagined three centuries ago by bean-counters who thought that what motivated their attitudes were 'universal'. So we ares till stuck with assumptions about 'incentives' and 'marginal utility' that bear no relationship with what really makes people happy and socially cohesive. Otherwise, there would be no-one going into Science, Engineering or Teaching, and an over-supply of economists, lawyers and doctors.
The 'Dismal Science' indeed, except that it is 200 % Dismal and 0% Science.
Alert moderator
darthseditious:
02 Nov 2015 11:55:18pm
Actually sleepykarly, the economic theories followed by most of the neocons is called modern economic theory or supply side economics and is, in itself, only about 100 years old, prior to that we had classical economics of which Keynes was a proponent thereof and is also known as demand side economics and is a better system to work under.
Alert moderator
Tator:
03 Nov 2015 2:33:38pm
Keynes is not a classical economist. Keynes wasn't even a formally trained economist. He had a degree in mathematics and did some post graduate classes in economics.
Classical economics predate Keynes as they include the work of Adam Smith, John Stuart Mill and Jean-Baptiste Say.
Keynes published his General Theory in 1936. The Classical economists were all 18th and 19th century works.
Alert moderator
darthseditious:
03 Nov 2015 6:57:27pm
I probably should have said that Keyne's theories were based on classical economic theory rather than modern economic theory rather than him being one. But really who cares if he was a mathematician with a masters in economics rather than a straight economist? Ross Gittins is an accountant but writes on economic matters and makes more sense than most economists.
Alert moderator
GreyBags:
02 Nov 2015 8:22:38pm
Yet right wingers tell us the wealthy will stop working if you tax them one cent more as they need more money as an incentive but the poor must have money taken off them as an incentive to work. Such cognitive dissonance.
After a certain level of income, any more dollars does not translate to more happiness, just look at how sour, bitter and aggressive Gina is to her children and towards most Australian workers. A caring society would tax them back to reality so they can start to enjoy the little things in life.
Alert moderator
nrh:
03 Nov 2015 9:10:31am
yeah like scandinavians pay more tax, have better social benefits and are generally happier than non-scandinavian countries.
- I forget the source but it is repeated time after time..
Alert moderator
Mossman Mal:
03 Nov 2015 2:58:17pm
Scandinavian counties also sold the mineral in the ground for a lot better price than we give it away for they also got the mining companies to build infrastrucor. we let the multis come take what they want at very little cost to them
Alert moderator
LongMemory:
02 Nov 2015 2:03:19pm
The GST at 10 percent, as it is, should automatically raise the justifiable increases in revenue to government, since it is a 'percentage' of money spent.
As the economy rises, the spending power of those in it rises, and the tax collected rises, because 10% is, after all, a percentage.
Australians certainly aren't spending less money per annum, so GST collected is already going up each and every year.
This is the way PM John Howard sold the GST to Voters, as a 10% flat rate tax - one that should raise extra money each year for the government, because it was a percentage based Tax.
It gives governments (States and Federal) extra incentive to keep economic growth going, as their share of tax would be based on the growth of consumer and business spending, WITHOUT them changing the 10% rate.
Alert moderator
a happy little debunker:
02 Nov 2015 4:22:48pm
Ah, but ten years ago the GST on a big flat screen TV was a heck of a lot more money to the government than it is now.
So too 10 years ago, household credit was climbing as percentage income - we were going further into debt providing governments with their GST.
So governments would argue that because we are not consuming as much at this part of the cycle, as perhaps we were - at another part of the cycle - then they will have to increase taxes to compensate.
But I can guarantee you that should our consumption increase - they will never, ever consider lowering these taxes.
Alert moderator
LongMemory:
02 Nov 2015 6:17:40pm
But my top of the range iMac computer now gets the government more GST then it did 10 years ago (I don't watch TV). I.e. People collectively are now spending more money with a GST component than they were 10 years ago, overall.
In fact, the Australian government, more than any other OECD government has had a continual climb from such revenue since the GST was introduced here, as this is 'the 24th year of continuous economic growth, of the Australian economy' - remember?
Alert moderator
a happy little debunker:
02 Nov 2015 7:06:55pm
With successive interest rates cuts to now absurdly described 'emergency levels' - we have not seen a corresponding increase in consumption.
Since the GFC we have actually seen private debt paid down. Marginal Economic growth has not translated into increasing consumption.
Nonetheless the economic cycle is resulting in marginally lower GST revenues for the states at a time of increased state government spending.
Hence we have governments wanting more slice of the pie.
Alert moderator
spacey 101:
02 Nov 2015 7:47:28pm
'With successive interest rates cuts to now absurdly described 'emergency levels' - we have not seen a corresponding increase in consumption.'
Well yes Alfie but that has nothing to do with the GST.
What you describe is the results of the mind-numbingly stupid policies of the current LNP government which has deliberately sucked money OUT of the economy.
Then we have numpties like you wondering where consumption has disappeared to and why government revenue is falling.
Alert moderator
a happy little debunker:
02 Nov 2015 8:40:06pm
Yes, Numpties like me - that forewarned that excessive federal stimulus spending would lead to higher interest rates than we needed to pay at a time of falling demand.
That has subsequently lead to a collapse of demand and subsequently failing interest rates.
Now all the monies have now been spent - debt and deficit disasters are the order of the day!
Alert moderator
LongMemory:
02 Nov 2015 7:48:12pm
'Private debt paid down' doesn't reduce the tax take - indeed the 4 pillar banks are making record profits, and, given their special place in our economy, they can't hide/shift those profits overseas like many other companies can. Hence, neither Party has any real desire to kept the bank fees and charges, consumer-friendly.
Why wouldn't a consumer pay off their credit card debt, when it continues to attract over a 20% interest rate, not exactly an 'emergency (low) level'.
Furthermore, 'marginally lower GST revenue' is not 'lower GST revenue'.
The Government can't gloss over the bare facts:
1. GST at 10 percent, increases the tax take with a growing economy, since it is a percentage-based tax.
2. The Australian economy has grown for 24 years straight, and so has the overall GST for each of the years since its introduction.
3. Since we have out-performed all other OECD countries with that record long stretch of growth, its no good comparing our rate of GST with the other OECD countries, and saying that we need to tax like them.
Alert moderator
a happy little debunker:
02 Nov 2015 8:47:49pm
You surely cannot deny that every dollar of private debt paid down is around 10 cents less consumption tax collected.
But this does not alter that the states are wanting more of our monies to spend - whilst claiming that their slice of the pie is insufficient for their ever-increasing spending programs.
Personally I deeply distrustful that any additional GST claimed will ever make it to it's intended target - state funding.
Alert moderator
Mossman Mal:
03 Nov 2015 3:05:21pm
Just ignore the fact that most Australians have less desposable income no spending what you have not got. pay down debt so you do not have to support the bank making there record profits
Alert moderator
Steve Mount:
02 Nov 2015 2:05:41pm
It's mostly smoke and mirrors, with a good pinch of deceptive waffle.
Cutting one or more taxes and raising others must still come down to a simple sum of more or less tax paid by the people, one way or the other.
To suggest that a rise in the GST, offset by income tax cuts, will reap a huge gain in revenue without any negative impacts is simple nonsense.
Alert moderator
Genghis Marx:
02 Nov 2015 2:09:55pm
"All taxes are flawed "
That's the point of view of the proponents of greed who consider all taxation to be unjustified. they do not want to contribute to society and are happiest to live in gated communities with private armies to shoot at the underclasses as they pass by.
It's a dream which had already faded (in England) by the end of the 12thC but still lives on at the CIS.
Alert moderator
Dugong:
03 Nov 2015 10:39:12am
No, Genghis.
"All taxes are flawed" is simply stating that some taxes are more efficient at raising money than others, or have unintended consequences, while recognising that there is no perfect solution.
A classis example is payroll tax - a tax which disincentives employing people is flawed.
Alert moderator
jonmarks:
02 Nov 2015 2:17:34pm
Well I for one cannot comprehend how our esteemed Coalition government could possibly countenance a hike in the GST.
It is a tax.
And they keep on banging on and on about their side of the political divide being the low tax one. The one that stands for lower taxation, for fairer taxation - whereas the other side, the socialist income re-distributers, are addicted to raising existing taxes and starting new ones.
Added to this is the continued stance from the Coalition of the lower, fairer tax system that the GST is entirely a State tax, has nothing to do with federal Canberra, that any decision about GST is a State one and that all funds from it go the States anyway.
So we have a Coalition that really, really wants to raise the GST by 50% and widen the base, pay as little compensation to low income and fixed income people as they possibly can, hand all the funds garnered over to the states with the obvious accompanying caveats that they now have to fund rather more services directly without any other help from Canberra and bank the savings in reduced direct federal State funding as a 'budget recovery' initiative. And of course they want the States to ask for this change so that they can forever more blame them.
Something called a tax (the 'T' in GST stands for tax) is a tax and a raise in this tax is a raise in taxation. Now I know that our brand new and shiny Coalition is not like the nasty old one but does anyone reading this forum really think that the purpose to any 'reform' of GST and the taxation system in general is going to result in a lower, less predictable tax take for government. Does anyone really believe that their purpose is to have less revenue for federal government to spend? Does anyone actually believe that they will go through this whole process of changing rates of tax, compensating various groups, perhaps even scrapping some existing taxes and changing the legislation behind others so that they can have less money to spend?
Of course not, what they want is a more predictable tax base and nothing is more predicable than basic consumption. No problems with variables in employment, wages or company profits - just tax the everyday necessities of life.
And GST has a couple of other huge bonuses - it is gathered by completely unpaid collectors (businesses) and roles in every month with no waiting for last year's company profit and loss or personal tax statements.
Alert moderator
Nova4avr:
02 Nov 2015 4:20:50pm
"And GST has a couple of other huge bonuses - it is gathered by completely unpaid collectors (businesses) and roles in every month with no waiting for last year's company profit and loss or personal tax statements."
But it misses out on the ever growing black economy.
Alert moderator
jonmarks:
02 Nov 2015 6:14:48pm
Unlike PAYE you mean?
ALL tax misses the black economy - it wasn't invented for GST.
Alert moderator
Mossman Mal:
03 Nov 2015 3:09:18pm
Legalise all drugs and you would rake in more money and stop children being invovled with criminal figures lot of money to make by getting rid of the black market but as to many people in the top end of town make money this way it will never happen
Alert moderator
tomtoot:
02 Nov 2015 4:47:40pm
@jonmarks:- Well stated
Alert moderator
maccca32:
02 Nov 2015 2:25:34pm
I find it interesting that the first thing the left mention is how an increase in the GST will hurt the worst off because it is a regressive tax, which in isolation is true. Although when the GST was first introduced the worst were over compensated. Do they disagree with that statement?
They also complain that the rich always find a way to not pay their fair share of tax. However you can't avoid paying GST (i have heard the building industry is notorious for agreeing to not charge GST in lieu of cash in hand payment).
If both the above is true (worst off will be compensated and rich can't aviod paying GST), why wouldn't you want to increase the GST?
Obviously I am missing something.
Alert moderator
Terence:
02 Nov 2015 2:59:43pm
The compensation is long gone but the gst keeps taking my money forever. The gst on electricity alone is more than the compensation was in total.
Lazy governments love the idea of increasing the gst.
Alert moderator
Miccy:
02 Nov 2015 3:59:01pm
I've got to agree with Macca. It is a gross oversimplification to say that GST hits the lowest income earners the hardest. Many of these people are already receiving a benefit from the government. They now seem to expect the supposed rich people (anyone who earns more than them) to pay more tax to continue providing the services they want to use but contribute nothing towards it themselves.
Alert moderator
Chris L:
02 Nov 2015 7:57:42pm
They're receiving benefits because they need them. If we make life more expensive for them, well... then they'll need more.
Also, it was true last time that the compensation evaporated due to inflation while the extra expense stayed. Does anyone think that won't happen again next time?
Alert moderator
nrh:
03 Nov 2015 9:35:01am
the poor want the rich to pay more tax.......... not so, we just want them to pay their fair share and no longer to be able to arrange their affairs so they are paying less than their minions!
Alert moderator
Mossman Mal:
03 Nov 2015 3:14:31pm
A poor person go out to dinner might spend $30:00 paying gst of 3:00 wher as a rich person might spend $500:00 paying gst of $50:00 the amount of gst is relative to what you spend so the more you spend the more you pay
Alert moderator
Yorker:
02 Nov 2015 3:41:10pm
You answered your own question - the rich (or anyone) can offer cash payments to avoid paying it.
Regarding compensation payments to the poor,income tax relief is gradually reeled in by bracket creep, but GST is indexed to inflation. So even if we accept that they were initially over-compensated they won't be 15 years (and forever) later.
Alert moderator
buderimboy:
02 Nov 2015 3:45:25pm
you earn $25000 (Income tax about $1000) you spend $24000 (no way to save) assuming 85% of what you buy has GST then GST = $1854, total tax $2854 about 11.4%
you earn $100000 (income tax about $24947) you spend $60000 (save $15000) assuming 85% of what you buy has GST then GST = $4636, total tax $29583 about 29.5%
if you change it to GST on everything at 15% then assuming The "compensation" is to increase the tax threshold to $37000 then at $25000 ($0 tax) then GST = $3273 total tax $3273 (a 14% increase in tax paid)
and on $100000 (income tax about $22147) GST = $8181 total tax $30328 just 2.5% increase
off course the person on $100000 pays $30328 for the same services that the $25000 earner pays $3273 for the same
Alert moderator
maccca32:
02 Nov 2015 8:03:29pm
That is based on your assumptions, so if instead they increased the tax free threshold to above 25k then the first person would actually be better off while the second person would be worse off as a % of tax paid.
Note to mention only 47% of all goods purchased in Australia are eligible to be charged GST with eduction and health and some food items currently excluded. Therefore I am confident both parties would not have the same (80%) percantage of items purchased charged GST.
Your point however is taken that the part-time or lower income earners are at more risk and will probably be the hardest to compensate vs welfare receipients (which should be tied to inflation like GST will be).
Alert moderator
GreyBags:
02 Nov 2015 8:31:01pm
I also remember the compensation for the carbon pricing was also an over compensation. That did not stop the Coalition going into an insane song and dance about 'great big new taxes' and sobbing about how pensioners could not longer put on the one bar heater in the middle of winter. End of the world, destruction of the economy, the end of civilisation as we know it, dogs and cats sleeping together etc, etc, etc..
So what you are claiming is that the intentional dishonesty of the argument against carbon pricing is only unfair if aimed at the Coalition instead of being created by the Coalition. Yes you are missing something, a memory longer than five minutes.
Alert moderator
Dugong:
03 Nov 2015 10:47:30am
This "GST is a regressive tax" is nonsense.
Clearly, at face value, it is a flat tax (same tax rate applied to all).
Looking deeper, it is skewed in favour of the poor.
No GST on rent - poor people are more likely to rent
No GST on fresh food - poor people can eat tax free, if they choose
No GST on some education courses - poor people can educate themselves out of poverty, tax free
No GST on some medication, medical aids and appliances
I am greatly humoured by those that moan about the GST being regressive, but then moan at the lavish spending of the rich. The problem is with them, not the rich.
Alert moderator
Chris L:
03 Nov 2015 2:50:00pm
"poor people are more likely to rent" - they also don't drive... apparently. So... how does that work in favour of the poor? Rich people can rent homes too.
"poor people can eat tax free, if they choose" - Fresh food still being more expensive than fast food... but it's a fair call to suggest they do themselves a favour there. Again, don't see how poor people are better off than rich here.
"poor people can educate themselves out of poverty, tax free" - it still costs money to do a course and a fair amount of luck for the qualifications to lead to gainful employment. A bit of research before choosing a course would help... if one happens to be skilled in such research. Again, how does this favour the poor over the rich?
"No GST on some medication, medical aids and appliances" - Great. I'm pleased. How does this favour the poor over the rich? Do rich people need more medication?
None of those points support your claim. The fact remains that poor people spend a far greater portion of their income than rich people... therefore a flat tax on expenditure is regressive. Not that hard.
Alert moderator
Suzy:
02 Nov 2015 2:27:17pm
The trouble with GST increases is that it is not an equal opportunity tax. People who do not pay tax i.e those receiving their superannuation in retirement do not get assistance. I am a retired teacher not a millionaire. GST increases hit people like me hard. A medicare levy increase would be farer.
Alert moderator
maxi:
02 Nov 2015 2:53:44pm
Yes, and we try to manage with lower and lower income from investments. It is not easy to be a self-funded pensioner.
The government has stuffed up and will again
Alert moderator
Christine:
02 Nov 2015 2:37:30pm
The goods and services, especially goods and maybe I am targeting goods only are already over priced. Where do you think the clothing brands are made and how? Overpriced. Overpriced. Overpriced. Make the rich bleed through income tax. They will still have a choice what to buy at end of day.
Alert moderator
Eric Quang:
02 Nov 2015 2:37:30pm
If Turnbull increases the GST without having dealt with tax avoidance, he should be thrown out of office asp. It's time for the people to demand it . Government needs to investigate tax avoidance by big business and wealthy individuals with the same vigour it has pursued union corruption.
Alert moderator
saline:
02 Nov 2015 3:34:29pm
You have a good point Eric.
Gaming the taxes related to companies and big business has become a sport.
The better your company does it, the more respected they are.
The trouble is that the game they've devised is part of their business plan and they will run to the government whaling "You're sending me broke!"
Alert moderator
ThingFish:
02 Nov 2015 4:58:23pm
"If Turnbull increases the GST without having dealt with tax avoidance, he should be thrown out of office"
He won't.
But he should be!
Alert moderator
LeftOfCentre:
02 Nov 2015 2:42:17pm
The premise that company tax is a flawed tax is a flawed premise.
Payroll tax may be a flawed tax, but that is a different argument.
The argument that money paid in tax is not reinvested in Australia is flawed - Capital investment is expensed out over a number of years and non-Capital investment is expensed immediately both which reduce taxable profit.
Dividends paid to Australian investors as Franked Dividends give an advantage as for every 70 dollars paid in cash to investors, they effectively get 100 dollars (30 pre-paid tax to govt). Non-Australian investors get the shaft - but since they are not paying Australian tax on their profit made from Australians, the ATO gets it via the company tax.
Sounds overall like a pretty effective tax.
Alert moderator
Alison Cann:
02 Nov 2015 2:44:11pm
Michael,
Here is the floor price.
The rich know any alteration to the GST will hurt the poor the most and they also know the old saying "Never give a sucker an even break".
So that is the reason the rich want to increase the GST. They want to kick the stuffing out of the poor and the lower classes, smash their low living standards and make sure they never get up off the floor again.
Why else would they want an increase in the Goods and Services Tax. To buy any goods or services you pay extra tax in a capitalist country. The rich can pay it easily but the poor are surviving from hand to mouth. And for anything called a "compensation" well pull the other leg as it may be a word called "compensation" but it will never compensate when the increase is designed to kick the poor and the homeless down the stairs.
Have any of the lower classes or the poor got any money in the Cayman Islands? All they have got is a 100 bucks in their back pocket or purse and five dollars that was put through the wash, and is on the line, drying.
Alert moderator
Cassandra:
02 Nov 2015 2:44:55pm
As Martin Luther King famously said "I have a dream...."
Unfortunately real reform is vital but highly unlikely as vested interest groups do well out of the current complicated, loop hole ridden tax system. Some of which is due to just adding on and not removing out of date laws but some of it is due to complexity and sheer volume of laws creating jobs for accountants and lawyers to ensure that some clients pay little or no tax and thus a myriad of government employees are needed to police it. In view of current trend to downsize the ATO then real intent to save the budget by increasing revenue is doubtful. A tinker around the edges and the Status Quo wins out again as it has with every review since Paul Keating's tax summit.
I dream a dream of real reform bringing a simpler tax system with real compliance achievement by lowering effective tax rates whilst eliminating exemptions, rebates and deductions. I may dream but I have no real hopes of real vision and courage from our politicians who are every bit as self interested as other vested interest groups.
For those who are interested I elaborated more in a comment on the previous article " GST Reform: Bill Shorten has a tough decision to make".
A PM and Treasurer who were this daring would be, to quote Sir Humphrey "Courageous"!
Alert moderator
Zoltar:
02 Nov 2015 2:45:46pm
An increase in the GST does not hit people on low incomes hardest.
The hardest hit are those who: find that the purchasing power of their assets has suddenly decreased; are too old to accumulate more wealth; and are too wealthy to receive government compensation for an increase in the GST. The hardest hit by an increase in the GST will be self funded retirees.
Alert moderator
Paul R :
02 Nov 2015 3:06:38pm
Zoltar,
You are right on the money with your comment . A lot of retirees are only just self funding and certainly have no big back up funds to carry the 50% increase in the GST.
In fact any one on a restricted income will cop it in the neck.
My view is that the government should use the rule of everybody contributing according to their means which means they start at the top and work down.
Alert moderator
Terry:
02 Nov 2015 3:09:23pm
a poor person with $100 a week to spend on groceries, is now paying $105, what items do you suggest that they cut out of their already meager existence to justify this grab.
And when inflation puts up prices, its suddenly $120, with the governments initial $5 tax break for low income earner eaten up overnight.
Not to mention all the other kicks to the guts the Liberals expect these low income earners to take lying down, GP co payments, higher education cuts - family tax benefits A and B, the list goes on - all designed to keep the poor poor and under educated, these things haven't gone away, you can be sure that these ideas weren't dreamed up solely from Abbot and Hockey.
Meanwhile Google and their ilk are paying $8 for every $600 they earn in Oz, less then 2% tax on their earnings.
Alert moderator
Zoltar:
02 Nov 2015 3:43:25pm
Terry, the reality of Australian politics, is that the only way an increase in the GST will be passed, is if those on low incomes are not just compensated for it, but over compensated. Ken Henry on 730 last month, estimated that this over compensation would need to be around $8 billion a year, forever.
Alert moderator
Terry:
02 Nov 2015 3:54:56pm
yeah, and it will then be rolled back in the form of cutting other payments to the poor such as family tax A and B, and don't forget those on newstart wont receive any help. That money has to come from somewhere, perhaps from health and education. instead of cutting $130 billion in federal money to the states, they cut $138 billion.
The States will then be required to make up for the shortfall, and we will have the gst increase conversation all over again
Alert moderator
RealReformForAustralia:
02 Nov 2015 2:49:49pm
We need Real Reform In Australia:
Australia needs:
1)Abolition of the minimum wage (despite what the PC reports);
2)Privatise all schools and universities;
3)Privatise all hospitals;
4)Privatise all libraries;
5)Reduce all government supplied (taxpayer supplied) welfare by 0.05% per annum in nominal terms;
6)Encourage private charities to take up the slack in welfare provision;
7)Drastically reduce all levels of taxation...
Alert moderator
buderimboy:
02 Nov 2015 3:07:54pm
1, Already have this it's called the student visa 100's thousands of "students" working under the table
2.-4, I take it the reason for privatisation is too gain efficiiencys? Why can't our overpaid Leaders run services efficiently? get rid of the leaders not the public systems
5. no reduce all fake welfare by 50% a year (800000 disabled Australians on a pension yeah sure)
6. Encourage private people to look after themselves
7.Drastically increase Big Corporations tax
Alert moderator
Ian:
02 Nov 2015 3:44:28pm
Is that like in the USA?
I was in Europe recently on a Tour looking down at Prague or Budapest. Most were Americans on the Tour. I heard one say to another
"I don't understand. I cannot see where the poor live. Where is the ghetto?"
The Tour guide said to me that they would need to look at an American city to see one of those.
Now tell me again what 'Real Reform' Australia needs!
Alert moderator
darthseditious:
03 Nov 2015 7:11:07pm
realreformforaustralia has posted this list of ultra rightwing nonsense before on the drum. I tend to ignore him most of the time because I think when he does post he's actually off his medication.
Alert moderator
saline:
02 Nov 2015 4:06:14pm
I love the boy.
RRiA, you missed out a fair bit.
Point 3. Privatise hospitals and write into the conditions that Higher income persons have priority, even if the poorer bloke is dying.
Point 4. Close all Libraries, the wealthy don't read.
Point 5. You're only reducing wellfare by 0.05%! Hey man, cut it out altogether, they'll starve to death in a year or two, problem over.
Mate, you don't get real reform at all, do you?
Alert moderator
buderimboy:
02 Nov 2015 4:47:19pm
6 years of no reform under Rudd and co
so all of a sudden reform is urgent?
3. we sadly already have this go see the specialist and wait 3 years to get him to operate at the public hospital or go private and in the same public hospital you see the same specialist next week, people die on the waiting list every day.
4. They read BMW catalogs?
5. Welfare use to be a safety net now its a way of life (for some) get rid of the abusers not the abused
Real reform and needed reform, are they the same thing?
Real reform and just reform, are they the same thing?
lets have another white paper (at $50 million ) that we ignore
Fairness works both ways those who can afford to pay should those who can afford to pay and then some more should, those who cant pay should not be excluded from these services BUT they who CHOOSE not to pay not to contribute but to bludge are stealing from EVERY Australian that is a reform that is vital
Alert moderator
Zathras:
02 Nov 2015 2:53:55pm
How would self-funded retirees be compensated for what is effectively a reduction in the value of their superannuation and retirement savings?
For those people the GST is a tax that is imposed retrospectively.
Alert moderator
Waterloo Sunset 2016 DD:
02 Nov 2015 2:54:16pm
It's unbelievable that 24% isn't being touted. A paltry increase of 5%, isn't enough!
Alert moderator
ThingFish:
02 Nov 2015 6:00:19pm
Increasing the GST from 10% to 25% would suck 20% out of the economy on the spot!
Alert moderator
Zoltar:
02 Nov 2015 7:07:31pm
Huhh?
Increasing the GST is the equivalent of a one off increase in inflation, that pushes up prices, necessitating people to spend more money, thereby increasing the size of the economy.
Alert moderator
darthseditious:
03 Nov 2015 7:14:28pm
Years ago before the GST was first introduced, a friend of mine who worked in the ATO said that ideally the GST should have been 25% with 10% going to the states with other incentives for them to get rid of or reform their more inefficient taxes such as stamp duty etc and 15% going to the federal government with income tax either drastically reduced or eliminated.
Alert moderator
Greg:
02 Nov 2015 2:56:26pm
Tax the rich?
Alert moderator
Billy Bob Hall:
02 Nov 2015 4:59:30pm
What about giving tax money to the rich. They tend to know what to do with it. Money makes more money.
Alert moderator
ThingFish:
02 Nov 2015 6:14:32pm
"What about giving tax money to the rich. They tend to know what to do with it. Money makes more money."
Only for the Rich!
Alert moderator
Alfie:
02 Nov 2015 6:09:04pm
Most are paying 45c in the dollar tax already.
Alert moderator
anurse:
03 Nov 2015 8:16:31am
They/we are paying 47 cents in the dollar on taxable income over $180,000. There is a way of paying significantly less, ask your accountant.
Alert moderator
rusty cairns:
03 Nov 2015 10:09:33am
Really Alfie are you sure they are paying that in tax ?
A recent senate inquiry found that although the company tax rate was 30 cents in the dollar one of the biggest miners was paying about 22 cents per dollar tax.
There is every possibility that the "most" you mention whom should be paying 45 cents in the dollar are paying a lot less than that by using tax minimisation schemes.
Alert moderator
Tator:
03 Nov 2015 2:50:27pm
Rusty,
people do not pay company tax. People pay income tax at their marginal rates on their dividend income minus the franking credit which is the company tax rate.
Rich people like Gina and Jamie do not pay taxes as a corporation. They receive their income via dividends provided by their shareholdings in their corporations, so any income tax they pay is on their dividend income and thus taxed at normal marginal income tax rates.
Alert moderator
rusty cairns:
03 Nov 2015 6:31:42pm
Gday Tator
Doesn't this mean that although their wealth may increase by more than is required to pay the maximum income tax rate they don't necessarily pay that maximum rate on all wealth earned ?
Can the company jet be used to fly a person to India for a wedding ( business ??? ) but the actual cost to that person to fly to India and back is paid with before tax earnings ?
Alert moderator
Jungle Boy:
02 Nov 2015 2:56:30pm
"There are a few welcome signs in this debate. The Assistant Treasurer Kelly O'Dwyer has said the government does not want to increase the tax burden on Australians. "
Dearie me, Mr Potter, you seem to be fooled by politicians' weasel words. There's a vast gulf between "we don't want to" and "we're not going to".
And was this the same MP who tried to deflect talk about the GST rising, using the lame excuse that the money would go to the states and not the federal government? Either the federal government is involved, or it isn't (and if not then it and the said silly MP should butt out altogether). They can't have their cake and eat it.
Alert moderator
fred2:
02 Nov 2015 2:58:41pm
Come on explain why company tax is flawed.
perhaps you mean companies can avoid the tax.
GST is regressive.
Only the wealthy ( and wealthy companies like KPMG) would prefer higher GST.
we are a small population so I believe the answer is more people.
The same government overhead( which we seem unwilling to reduce) will be more bearable when the population is higher.
Alert moderator
JMJ:
02 Nov 2015 2:59:30pm
Nice piece Michael. And if I might add anyone that has studied the VAT in the early 1980s would have reached the same conclusions in relation to the proposed increase in GST. Even if low income earners are compensated today $25 per week they are no better off than before the GST is raised from 10-15%. However, if the Commonwealth provides a half-yearly bonus on top of the $25 per week increase for all low income earners (& that includes the unemployed) then it might be a bit more equitable given the top income earners are the real winners from any future lowering of the tax rate.
Alert moderator
blueballs:
02 Nov 2015 3:07:19pm
Stop giving $60 billion in super concessions to millionaires.
How does a govt double the deficit, cut $80 billion from health and education and billions more from other programs, then increase spending to GFC levels, and want to increase the GST.
What a joke, all the GST does is make average people to pay more to support a millionaires retirement fund or a banks $7 billion profit.
Alert moderator
Charles NSW:
02 Nov 2015 3:18:02pm
Here we go again, take from the poor and give it to the rich!
This Coalition Government has been taking funds out of Health and Education why?
So they can force the States to take up the GST which is an regressive tax
Blackmail at its best with this lot running this country
Why not fix the tax system so everyone pays their share fairly
Alert moderator
Alpo:
02 Nov 2015 4:04:15pm
Is Turnbull going to return the money taken from the states, for health and education, by Tony Abbott?
Turnbull is ready to correct the nonsensical policies of Tony Abbott (= dames and knights).... but not those that really matter! Who is he trying to fool?
Alert moderator
Sarah:
02 Nov 2015 5:56:38pm
'Who is he trying to fool" fool? you may ask Alpo. Obviously its the electorate- and so far he is doing pretty well.
When will Bill Shorten start his with his brand of foolishness to match Malcolm's.
Alert moderator
Alfie:
02 Nov 2015 5:01:47pm
"Here we go again, take from the poor and give it to the rich!"
Try paying 45c in the dollar tax. Then you might have something to whine about.
Alert moderator
ThingFish:
02 Nov 2015 6:13:26pm
"Try paying 45c in the dollar tax. Then you might have something to whine about."
If you are paying 45 cents in the dollar then you, like me, have absolutely nothing to whine about because you have already cleared more than $125,000 in order to make the threshold.
Alert moderator
Tator:
03 Nov 2015 2:52:29pm
What money has been taken out?? According to Budget figures, both health and education have had their funding increased in real terms. Or are you just talking out of your hat about the unfunded projected increases that the ALP announced that were beyond the Forward Estimates period and not funded in any way.
Alert moderator
PG:
02 Nov 2015 3:27:37pm
So you need to apply various compensations for a GST increase because it harms poorer people? What a dog's breakfast.
What about simply raising the company tax rate to 39% which it is in USA?
Alert moderator
ThingFish:
02 Nov 2015 5:52:36pm
"What about simply raising the company tax rate to 39% which it is in USA?"
That would simply send a price signal to the miners and Google that they need to shift even more profits to Singapore and Ireland!
Alert moderator
Mike:
02 Nov 2015 3:29:07pm
The solution is NOT to raise the GST, the solution is to simplify the tax system. According to Treasury, Australians pay 125 different taxes and levies, of which 99 of them are federal. 97% of tax revenue comes from just 6 taxes. On the other hand, there are 67 agricultural levies which raise just 0.2% of tax revenue. The cost of administration of these small fry is disproportionately high and in some cases they cost more to administer than they raise in revenue. The cost of compliance to business is also very high, with some agricultural businesses reporting they spend around 10-15% of their administration time on compliance paperwork for around 1% of the tax they pay.
The simple solution would be to concentrate the top 6 taxes, remove some of the deductions and abolish ALL other taxes and levies. There would be a huge saving in government administration costs and a huge saving to business compliance costs. Overall the government, individuals and business would all be better off.
Alert moderator
Jungle Boy:
02 Nov 2015 5:37:36pm
Well said.
Alert moderator
ThingFish:
02 Nov 2015 5:50:35pm
"The simple solution would be to concentrate the top 6 taxes, remove some of the deductions and abolish ALL other taxes and levies."
Actually, the REALLY simple solution would be to get the Miners and the Multinationals to actually pay the proper amount of tax on the profits they actually earned in Australia.
Alert moderator
Zathras:
02 Nov 2015 3:36:01pm
Not so long ago, the Government was trumpeting about how they cut 1.7% from the cost of our electricity bills by dumping the Carbon Tax.
Now they think it's a great idea to increase the cost of ALL our bills by 5% (so far).
Something else they mentioned recently was the massive amount of tax avoided by large transnational companies but are now strangely quiet about it.
As laudable as potential cuts to Payroll Tax and Stamp Duty may be, they are not the typical day-to-day costs of the average consumer, so where's the benefit?
Alert moderator
Captain Jack:
02 Nov 2015 8:38:17pm
It's a50% increase in GST not 5%.
The 10 to 15 percent mooted increase in GST is a 50% increase
On most necessies like power, phone, rates, insurance , retail purchases except fresh food. They are looking at the food , education.exemptions
Make no mistke this increase would hurt.
Particularly self funded retirees, pensioners, low income earners.
And hundreds of thosands of small businesses just hanging on after the Labor disaster.
it's time for Governments to show some budget resposibility and cut spending.
Plling out of the crazy wars in the Middle east would be a big start.
it's not our problem .
Alert moderator
GreyBags:
02 Nov 2015 11:43:22pm
Would that 'Labor disaster' the one that took our economy to the position of best performing in the OECD?
Give me more disasters.
Alert moderator
Garfield:
02 Nov 2015 3:41:30pm
The only common sense way to change the GST is to increase it. Anything else, adding or subtracting items to the list is only going to create work (for lawyers and accountants), and confusion for everyone else. The system is in place and the change would be costless to all involved except of course the person buying the goods or services.
Unfortunately, lawyers and accountants will be making the decision and the money.
Alert moderator
Alpo:
02 Nov 2015 4:02:05pm
"and the change would be costless to all involved except of course the person buying the goods or services.".... and that worries me far more than the issue of lawyers and accountants.
Alert moderator
Gordon:
02 Nov 2015 4:25:49pm
Nope, put in on everything, including priv school fees, priv medicine, fin services, the lot. It is a broad-based tax across the whole economy, it is not meant to be a sin and virtue tax nor social engineering. stuff has to be paid for and if the people don't want tyo pay the tax they will think twice about demanding the service (ho ho)
Alert moderator
phil:
02 Nov 2015 3:45:01pm
AHEM....get rid of the states....GET RID OF THE STATES
over 40 billion a year so a bunch of underachieving losers
can argue with another bunch of losers about how to spend
our tax dollars. One education,police everything system
25 million people 8 state and territory governments, federal,
councils ,public servants etc etc etc. No wonder we're broke.
Alert moderator
ThingFish:
02 Nov 2015 5:44:04pm
"No wonder we're broke."
We are not broke, but we are handing over the money we DO have to the miners and the multinationals.
Alert moderator
Tator:
03 Nov 2015 2:55:01pm
South Australia is broke with debts over $15 billion. All due to a long term ALP government.
Alert moderator
Deb:
02 Nov 2015 6:24:46pm
I agree Phil- get rid of State governments. Federal Government and local councils are all we need. State government taxes on insurance add another third to the cost, stamp duty discourages young house buyers, stamp duty on every car no matter how many times it is sold, new duties on car registration apparently to help victims of car accidents I naively thought that was the entire point of car registration ( personal rather than property insurance which you cover yourself,) but now we have an additional charge for this, 10% on every purchase and their responsibilities such as education etc. are funded with Federal grants anyway.
Alert moderator
nrh:
03 Nov 2015 9:52:06am
also add the unrepresentative swill known, as Keating described them, the Senate
Alert moderator
Tim:
02 Nov 2015 3:56:17pm
Kelly O'Liar you mean.
What a disappointment she's proving to be.
Alert moderator
Captain Jack:
02 Nov 2015 8:47:26pm
Amen brother.
lie after lie.
and she is supposed to be representing small Business, where all the real jobs are created.
The 50% increase in GST would put a lot of marginal businesses under pressure. and prevent employers from looking at the extra apenticeship, the extra full time job.
The increase would be forever. Remember that.
Until the next time there is a big increase in the deficit. what then .
Shove the GST to 20% . 22-5% like in socalicist Europe.
It's a bout time politicains started to get their policies right. Pull in their own belts and cut the 3 levels of over-government.
You cannot put all the burden for taxation on local privare enterprise and the farmers.
When are the Treasurer and the ATO going to "get real" and tax Multi-National corporations and the top end of town ?
Any GST increase is morally and fiscally dishonest whie the big companies and high worth individuals pay little or no tax.
Alert moderator
Biggles:
02 Nov 2015 4:00:32pm
A raise in the GST is required as we are not collecting enough tax for our Western European lifestyles.
A modest increase will provide extra for hospitals, infrastructure and education, whilst not stifling the economy.
If you don't believe me, have a look at the GST rates of other countries, which are far higher than ours.
Alert moderator
Jack:
02 Nov 2015 4:41:20pm
'A modest increase will provide extra for hospitals, infrastructure and education, whilst not stifling the economy.'
On the other hand getting rid of schemes such as negative gearing discounted capital tax etc., and ALL companies paying the correct tax etc. would be far better.
Alert moderator
ThingFish:
02 Nov 2015 5:42:43pm
"A modest increase will provide extra for hospitals, infrastructure and education, whilst not stifling the economy.
If you don't believe me, have a look at the GST rates of other countries, which are far higher than ours."
I don't believe you because I don't believe the other countries you refer to are traveling very well in economic terms.
Alert moderator
GreyBags:
02 Nov 2015 11:33:10pm
Cracking down on the legion of tax lurks and perks for the rich and the corporations will more than cover the shortfalls in revenue.
Alert moderator
Bluestone:
02 Nov 2015 4:07:41pm
As I recall, Simon Crean predicted that the "income tax breaks" to compensate for the Howard 10% GST would be swallowed by bracket creep in two years. He was wrong, it took eighteen months. I am also confused about how this helps the Federal government. The GST goes (eventually) back to the states, whereas the compensation package will come from federal funds, which continues to create a budget problem in Canberra ...
Alert moderator
ThingFish:
02 Nov 2015 5:35:32pm
"I am also confused about how this helps the Federal government. The GST goes (eventually) back to the states, whereas the compensation package will come from federal funds, which continues to create a budget problem in Canberra ..."
No need to be confused! The LNP want to cut education and health spending which they provide to the states and they figure they can get away with that if they increase the GST and leave the state governments to figure out that their GST windfall just might fill the gap in the Federal funding!
Alert moderator
Rhino:
02 Nov 2015 5:51:19pm
More GST revenue to the states means they can cut down on other direct grants to the states.
Alert moderator
saline:
02 Nov 2015 4:12:14pm
It's all too simple for Bill Shorten, reject an increase in the GST.
Don't go anywhere with MTurnbull's arguments. He's just mouthing off for no reason that's good for people.
Bill, you won't sleep if you go with the conservatives and increase the GST. REason: because you will make life more miserable for the poor.
For a different reason, you won''t sleep if you don't increase the GST, because you will run out of revenue.
Better to run out of revenue than damage real, live human beings.
Alert moderator
mick:
02 Nov 2015 4:19:59pm
No doubt the 15% GST is just a formality now as Turnbull can suggest anything and is now totally unchallenged by the media. Any disquiet by Bill Shorten is dismissed and he is treated like an idiot. We have entered some bizarre political environment where Turnbull has abc, fairfax and murdoch all singing his praises. This is certainly not healthy for debate and democracy. Every % sought in increase should be hard fought and convincing to the taxpayers. Where is the debate gone
Alert moderator
ThingFish:
02 Nov 2015 5:24:51pm
"Any disquiet by Bill Shorten is dismissed and he is treated like an idiot. "
There might a valid reason for that, although I find myself wondering why Tony was not treated similarly during his time as the leader of his party.
Alert moderator
JackMeadows:
02 Nov 2015 7:55:14pm
"We have entered some bizarre political environment where Turnbull has abc, fairfax and murdoch all singing his praises. "
Murdoch will be very happy when Mr Wordsmith, (Turnbull) delivers the Media rights to him and he has all the Sport cornered, so to watch, we pay him.
Alert moderator
GreyBags:
02 Nov 2015 11:31:13pm
Considering his handling of the intentional destruction of Labor's sensible FTTP, Turnbull's 'alternative' has resulted in a very expensive third rate result locked in. I wonder where they get the idea that he can run a country?
Looks like we will have a media celebrating a PM who might spend a lot of money to make Australia a third rate country.
Alert moderator
Jan Jeltes:
02 Nov 2015 4:26:09pm
I am fundamentally opposed to government sponsored free loading. I am NOT a tax collector, never having been trained as such, I shudder at the thought of being a public servant and I will never work for no remuneration ever again.
That's what GST is - a freeloading government stealing time from businesses to do its job for it, because it is too damn incompetent to do it itself.
Alert moderator
ThingFish:
02 Nov 2015 5:31:15pm
"That's what GST is - a freeloading government stealing time from businesses to do its job for it"
You are quite correct. The GST is also one of the major causes of Australia's declining productivity since it was introduced.
Alert moderator
michyzelski:
02 Nov 2015 4:29:16pm
We already have enough taxes to fill the government coffers, what we need is for everyone to PAY the tax they owe. Multi-nationals, corporations, rent seekers and the rest of the tax AVOIDERS are the leeches sucking our economy dry.
Get them to pay up!
Alert moderator
saline:
02 Nov 2015 4:31:36pm
This government is looking at the huge number of refugees that is about to arrive within a year.
This is perhaps the driver of the behaviour we now see with the GST increase. The refugee payments and entitlements are about the same as the unemployed or the bottom wage earner.
In planning for their arrival the government immediately leaps to the conclusion that the poor will have to share and bear the burden.
Hell, you don't expect the well-off to pay, refugees are not their class!
Alert moderator
Andrew C:
02 Nov 2015 4:32:48pm
Without a shred of evidence or reason Mr Potter has just vomited a series of statements that were almost certainly ingested by the IPA from its funding sources.
Although a 3-year-old could have done a better job of convincing anyone of anything, it is clear that he was required to simply state the things the IPA's paying client's want. The appearance of these sorts of articles allow the lobbyists and politicians to collude to claim that there is debate in the community, and that there is intellectual backing for their policies which are really just a bucket list of things demanded by the lobbyists to benefit their clients (which are powerful business interests and high net-worth individuals).
Several times throughout the article Mr Potter claims that company tax is a flawed tax. There's no reasoning given for this absurd position. There is no economic argument that could possibly support this view, and there is no rational basis (other than the greed of the people who have to pay it) for saying that an income tax on corporations is "flawed".
There is a good argument that Australia's corporate tax is flawed, because it allows far too many deductions for no economic benefit, is generally too low, lacks progressive tiers to ensure that higher incomes pay a higher rate, and it is too easily avoided by multinational corporations. changes need to be made to fix these errors, but I can guarantee you that that is not what Mr Potter was talking about.
He comes from the view that any progressive tax is a bad tax, and in fact, that any tax AT ALL is a bad tax. Apparently he thinks that the free market is more efficient than the government, so anything that isn't the free market is bad. He's the ultimate anarchist.
His views are extreme and absurd and he should be treated as such. Sadly people like him and who share his views run this country and most of the Western world.
Alert moderator
PG:
02 Nov 2015 6:16:26pm
It's called the 'corporate coup d'etat' of western democracy; worse elsewhere than here, but here nonetheless.
Wealth flows to the richer where it is used to influence policy in their favour, and to concentrate media power so the message to the citizens is fiercely one-dimensional in favour of further wealth accumulation.
A third of people in this country living in poverty are in a household where wages are the main source of income. Even having a job is no longer enough to live decently on.
Alert moderator
Perry:
02 Nov 2015 4:44:39pm
If you raise GST and give it back via tax cuts, all you've done is made the poor poorer and the better off better off.
Alert moderator
Perry:
02 Nov 2015 4:47:50pm
When there's talk of compensation for low-income workers through increased pensions and the like, no-one considers that self-funded retirees won't be compensated. Their savings must stretch even further.
Alert moderator
a_boy:
02 Nov 2015 4:48:22pm
The GST is a fair tax as it goes. But; and it's a big but; poorer people are less able to pay it than are the wealthy.
You can't "compensate" a poor person for an increase in the GST when they do not earn enough to pay tax in the first place. That includes every pensioner I'm aware of.
Some mechanism must be found to ensure that the truly wealthy actually do pay a fair amount of tax. That is not the case at the moment.
And don't get me started on corporations!!!
Alert moderator
ThingFish:
02 Nov 2015 5:04:20pm
Don't all the small business owners and retailers realise that increasing the GST from 10% to 15% will decrease their revenues by 4.5% on the spot???
Or are they hoping that the small business tax rate will get cut to 20% from 30% when they hike the GST?
Alert moderator
the munz:
02 Nov 2015 5:31:16pm
The GST is widely avoided by the cash economy (Mr Costello did promise that the GST was going to fix the problem!).
Increasing the rate must make it more attractive to deal in cash.
Expanding the coverage to those expenditures that are exempt does look sensible and corrects the error made when the GST was first introduced.
Alert moderator
Stirrer:
02 Nov 2015 5:37:33pm
Aland Greenspan admitted the neo con/financial industry debt driven economy he designed and presided over had a flaw.
It therefore follows that everything emanating from it is also flawed- so we have flaw upon flaw and now we have a Government which wants to hoist another flaw on us- a flaw on a flawed GST- while reducing flawed tax on flawed companies - anther flaw?
Well I suppose you cannot expect anything different from a Government rusted on a flawed ideology.
Alert moderator
GreyBags:
02 Nov 2015 11:09:26pm
The entire edifice of neo-liberal and neo-con economics is based on an initial flawed conjecture.
"All people are selfish and rational".
That is so clearly wrong yet an entire discipline is based on the first incorrect assumption. They do not account for the segments of the population that are unselfish and rational/unselfish and irrational or the general right winger who is selfish and irrational.
Alert moderator
Stirrer:
03 Nov 2015 9:51:43am
Seems to me that like any rusted/cum extreme ideology the entire mind set of neo-liberal/neo con is flawed not just that of economics.
The whole concept of 'aggressive individualism' - ME- ME and 'exceptional" is morally -intellectually and economically wrong.
-
Alert moderator
Ben Nallay:
02 Nov 2015 5:56:01pm
Mr Potter you're a wiz. (Apologies if you're sick of the cliche's)
Why is it whenever I get on that baht bus to Ban Chang, I come back and someone's been reading my mind? This happened last Tuesday morning too.
"... and all this compensation means less money for cutting the more flawed taxes, such as company tax."
Eggs Actley Einstein.
The best outcome if nobody is going to get more experience with economics at the cutting edge is a zero-sum game. There's no nett revenue in it, unless someone's doing another Porky Joyce on us for the new week. You can't get something from nothing,.and they can't get revenue without hurting someone. Who do politicians like to hurt the most, I wonder?
The academic elite with all the property investment? Humm, I don't think so, Mr Potter. Too hard to fool a rich man with a BA.
Alert moderator
is GST fixed:
02 Nov 2015 6:04:04pm
Question regarding regressive GST:
If Fed govt says it is 10%, can a State govt go and only collect say 9%. As all GST goes to the States apparently, why not?
Imagine the business booming in a State that charged less GST than the others.
If I were a State Premier, that is what I would do. Lower the GST and watch the other States have a blow-up feast with the Feds.
Alert moderator
JohnnoH:
02 Nov 2015 6:30:55pm
This government came to power promising it would cut taxes. What come readily to mind that there were at least 3 attempts to introduce a GP tax. Yet this mob will always spread the myths that taxes are always lower under the tories. So broadening and increasing the GST shouldn't come as a surprise as this is the biggest bunch of liars to occupy the treasury benches. Even though they slashed the budgets of both the ABC & SBS (yet another broken promise) the budget only got worse.
Alert moderator
James In Footscray:
02 Nov 2015 6:43:56pm
This tax debate is all about accounting. The amount we're spending is a given. We play around with tax and borrowings to work out how to pay for it. Some conservatives might mention administration costs - factor in cutting 'waste'. That's it.
How about we talk about what government should *do*? What's the role of the State? Is it extensive or limited? What is good and right?
Once we know what we want government to achieve, we then work out how much it will cost, and propose how to pay for it.
It means the Greens, Labour and Liberals giving us clear visions for society. But they're too scared.
Alert moderator
pilotyoda:
02 Nov 2015 6:51:16pm
Error in the detail from a Right-wing think tank:
The GST is a Federal tax (for distribution to the States). It is dis-ingenious when the author quotes a misleading figure regarding the subsidies to students from Public and Private schools....
The amount the Federal Govt pays is 66% of education money goes to Private school students and 33% to public students.
That is: there are twice as many public students as private ones and the federal money is split between the sectors about 50%. So the private schools get twice as much per student as the public ones.
The States makeup the difference which means they pay more to public schools to bring the amounts back to about equal. Except that in many states a bigger grant is given to private/independent schools.
While public schools are expected to account for every cent, there is no audit process forcing the private sector to account for their publicly provided funds.
The other misleading statement regards the spending on Health (and by omission - Superannuation)
The cost of subsidies for superannuation (which mainly benefits the wealthy) is set to exceed the cost of paying the pension this coming year. Yet the government is bleating about the cost of pensions and bangs on about the age of entitlement should come to an end.
Try this on for size: Cut ALL superannuation subsidies and immediately you could double the pension for all those on it.
OR increase the pensions and welfare by, say 25% and increase the unemployment benefits back to the same rate as the pension, which would stimulate the economy, while leaving a substantial boost for the budget.
Let those who can afford it have all the superannuation they want and simply pay the standard marginal rate on income derived from those investments. They could even receive a part pension for their trouble and the government's bottom line would still better off.
It is not a lot better for the health sector as so much goes to subsidies for private health insurance that money for the public system is being squeezed. Remember: if you are in a serious accident, or need a major organ transplant, you will end up in a public hospital as there is no profit for private operators in these high-intensity services.
Somehow I think this is not what the CIS and the Liberal government want. Their "age of entitlement" (another 3 word slogan) argument is only meant to apply to those below median wages. I see no pressure like this on the wealthy.
Remember, taxes provide for all of what we enjoy as a free, open and healthy society. Where taxes drop with minimalist governments, society starts to crumble and corruption prevails.
Alert moderator
Tator:
03 Nov 2015 2:58:03pm
PilotYoda,
The OP is talking about the AGSRC amounts of funding which includes the state governments funding for public schools. Which btw they are constitutionally required to do.
Alert moderator
Noel Conway:
02 Nov 2015 6:54:18pm
Why do we call changes to the GST "reform" when it is what it is, a TAX INCREASE. It is no more reformist than the carbon tax. So let's stop calling it reform, and call it a dirty great big tax hike, and what is more, a dirty great big tax ile that is regressive in nature, hurting the poorest more than the rich.
Look, let's get rid of tax concessions that benefit the rich. These tax concessions have another name, tax avoidance. They are ways of avoiding your tax obligation. Providing radical concessions to the rich for saving money is bizarre, why are we skewing the savings market by providing this false incentive? It is simply a tax dodge.
There is no crisis in our tax system. The only reason the GST is being talked about is that the rich want to pay less tax, and want the poor to pay more. The GST into good for the economy, and certainly not good for those on lower incomes. The idea that you will simply compensate everyone is a furphy, what is the point of raising the GST if everyone is just going to get compensated anyway? Obviously that is not their intention.
This is a tax hike and a tax grab. All those conservatives who decried Gillard for the "tax on everything" carbon tax should surely be fighting hard to ensure we don't have another tax on everything in the form of a GST.
Alert moderator
The weed:
02 Nov 2015 7:06:23pm
The GST stinks, it is right wing bull dust. They took away the "unfair" carbon tax and now they're talking about replacing it with a more unfair, less effective and more costy tax.
Does the LNP really think we can't see through their sponsor serving crap? They have proven they are blatant liars and self serving and there is no way they can be trusted to "fix" our tax system.
Alert moderator
the egg:
03 Nov 2015 8:57:04am
The real big problem weed is that enough people believed the bulldust and crap espoused by the previous leader for them to get into power.
Now we have another "leader" who has , alledgedly according to the polls seduced a million voters back into the LNP fold and they will get another go by winning the next election to further hammer the low paid, poor, sick and elderly. Great !!!
Alert moderator
GreyBags:
02 Nov 2015 7:17:30pm
Great big new tax on everything.
Great big new tax on everything.
Great big new tax on everything.
Damn, I am turning into a mindless right winger who uses slogans instead of supporting my case with evidence. Oooh look, CIS, a bunch of right wingers. No one tell them that the last Coalition government was the most profligate in Australia's history and this current Coalition government is spending at a rate that matched Labor's during the height of the GFC stimulus but they have no excuse.
Taxes are always higher under a Coalition government (damn, there I go with the slogans again). Look at government take as a percentage of GDP.
Alert moderator
JackMeadows:
02 Nov 2015 7:47:36pm
When will the discussion get around to the Multi Nationals and the tax that they are ripping our economy off by the Billions each year?
By all means raise the GST (12.o5%) would do nicely, with the Multi-Nationals paying their fair share rather than this evasion that the get away with.
Alert moderator
burke:
03 Nov 2015 4:21:12pm
Please check BHPs annual report. Do some proper checking before mouthing off!
Alert moderator
jackmeadows:
03 Nov 2015 5:54:32pm
I wonder when google and all the others will stop their skimming profits to Tax Havens.?
Seems like we are being taken for suckers.
Alert moderator
VetTeacher:
02 Nov 2015 8:13:36pm
A rise in the GST without having the impact on income tax and company tax rates COMPLETELY explained is the ultimate example of buying a "PIG in a POKE". If all that happens is that those at the bottom and in the middle receive compensation approximately equal to their anticipated "extra spend" to cover the impact of the tax increase whilst those at the other end receive a reduction in their marginal tax rates delivering an increase in disposable income way above their anticipated "extra spend" , then as usual the net effect is to push the burden of taxation even further down the hill.
Additionally if doubling the revenue from the GST raises double the current take ($130 Billion v $60Billion) it kind of shoots in the foot the rubbish we have been peddled by Scott Morrison and various of his Federal colleagues , unlike Mike Baird , that only spending cuts are required to bring the budget back under control. Now my criticism is based upon an interpretation of what is intended and may be flawed by inadequate information. Similarly various media outlets are peddling the rubbish that we the electorate should back an increase in the GST simply because other countries like New Zealand , many countries in Europe and in a number of different ways the USA have chosen to do so.
If the real underlying intent is to fiddle with income tax rates in the same old way then again we would be adopting the "blood out of a stone" approach of moving the burden of taxation even more heavily on those least able to afford it. Any move on the rate of the GST and the range of goods on which it is to apply needs a comprehensive justification released in plenty of time before the next poll. If the changes can be demonstrated to be fair and equitable then , who knows, even those less trusting of the motives of the LNP may yet warm to the idea of paying substantially more for everything.
Despite all the blathering from the new PM about everything being on the table with regard to tax reform, the only thing that really seems to be being taken seriously is an increase in the GST. And of course a plan to reduce the tax burden on some of the lowest paid in the community. That of course through the medium of lower pay when penalty rates are abolished.
Alert moderator
Jen:
02 Nov 2015 8:35:30pm
No amount of compensation for low-income earners would keep up with price rises in the long-term, the same as the initial compensation hasn't. Expanding the GST to fresh food and healthcare would hit poor people hard, regardless of any token amount of compensation given.
That said though, there is room to move with expanding the tax to the junk foods which currently receive the food exemption, while keeping the exemption for genuinely fresh foods like vegetables, fruit, meat, eggs, milk and cheese. Currently, jelly crystals, cake mixes and flavoured milk straws get the exemption. Expanding the tax to include any products with food additives, while leaving the basics exempt wouldn't bother me.
Alert moderator
Lovewhiteboats:
02 Nov 2015 8:50:08pm
Dont know how you achieve it however Governments should devise schemes to target the black economy - so endemic within the trades and building games. Veritable mountains of tax being avoided
Alert moderator
Obadiah:
03 Nov 2015 7:50:07am
I was stunned when Howard gave $640M to the ATO to help collect tax. I wonder how much they collected for that amount.
The whole tax system is unfair and obscenely complex.
Here is how to fix it - A flat tax of say 20% on every dollar earned for everyone above a threshold of say 10% of the Prime Ministers salary. The average total revenue is about 23% but savings would be at least 3% thus everyone benefits. An extra 3% moving around the economy would create untold rewards for everyone including the government.
No workarounds, no cheats, so simple.
The current tax scales should be a percentage and not a fixed amount. This is a rigged system. Rigged to keep on offering tax cuts so as to introduce other taxes then inevitably we creep into the next tax scale with the ever increasing new taxes. Time to take off the blinkers people.
Alert moderator
Tator:
03 Nov 2015 2:59:11pm
over $ 3 billion between 1996 and 2013. All from High Wealth Individuals.
Alert moderator
Diana G:
02 Nov 2015 9:55:17pm
MUCH more GST could be collected at the current 10% rates if the government legislated to:
1. reclassify all GST exempt entities to zero rated ones - i.e. they do not have to charge GST on their services (if they provide any) but they cannot claim back GST on their costs either;
2. remove all charitable / not for profits GST concessions - i.e. charities / not for profits can not claim back GST on their costs either.
3. offset GST refundable to businesses whose costs exceed their revenue against future GST payable - i.e. do not refund excess GST paid in a period but treat in the same way as tax losses carried forward- i.e ban the refund.
Of course 1 & 2 would mean many entities would no longer get refunds or cheaper purchases than ordinary consumers, and costs would increase - but not across the board and not even by 10% for the newly reclassified businesses - as not all of the entities costs attract GST - for instance salaries & super do not - and it would not be necessary to apply the tax to the entities profit margin.
Many charities and not for profits actually make enormous surpluses - think of churches and private schools as well of all the dodgy charities out there - and they benefit enormously from GST free costs.
3 would have cash flow benefits for the ATO and would prevent non profitable businesses or bogus ones) from getting GST refunds.
This way all consumption is taxed - and the increase in cost to the least well off is restricted to a less than 10% rise in the cost of previously exempt essentials - food, health and education - so the compensation to the least well off would be lower than under the other proposals simply to increase the rate and scope.
A further measure would be to increase audit activity as GST avoidance and over-claiming is rife.
Alert moderator
David Arthur:
02 Nov 2015 10:45:45pm
A couple more alternatives to increasing GST.
1. Legalise, and tax, recreational drugs.
2. A HECS scheme for employers - with revenue going to post-secondary (TAFE, and uni) education ... in return for an across the board Company Tax cut.
3. A Consumption Tax on Fossil Fuel.
Alert moderator
purgatory:
02 Nov 2015 10:47:40pm
For the past six years the Reserve Bank and other economic 'think tanks/agencies' have been stating Australia has a consumption problem. That is, Australian's are not consuming enough (purchasing enough goods and services) because they are paying off their housing debts faster or are saving, rather than spending, in fear of further economic decline and loss of employment (as evidenced by mining industry job losses). This drop in consumption has decreased productivity, slowed growth and contributed to rising unemployment. To counter this the Reserve Bank has repeatedly decreased interest rates to encourage spending rather than saving and, hopefully, stimulate growth.
In the current economic climate, a 5-10% increase (goods currently worth 89c will not rise by 5% to 94c, but to 99c-rounded up etc) in the price of 50% of goods, and/or a 15% new tax (on the 50% currently exempt goods), will further decrease consumption, unless wages (currently in reverse compared to inflation) and welfare increase over and above the increased taxes/inflationary impact.
When Howard introduced the GST it replaced 'sales taxes' and, with a small welfare compensation, had limited impact on overall consumption. He also had the benefit of any reduction in domestic consumption being countered by China's increased demand for Australian resources.
This time, the (increase in the) GST will not be replacing other 'consumption taxes' and therefore, have a much greater depressing impact on 'domestic consumption', even before considering the 'flaws' of disincentives to work, compensation(money churn), etc.
A bigger GST will not increase 'productivity' or 'growth', which the government (and big business) repeatedly state as necessary to stimulate the economy, but will have a depressive effect upon both. I hope this fact is 'put on the table' when options are discussed.
Alert moderator
Twiliteman:
02 Nov 2015 11:03:36pm
When Labor introduce or change taxes it's a great big tax. When the LNP do tax increases it's called reform.
Alert moderator
Retirenowau:
03 Nov 2015 12:20:53am
If the government decided to take 5% out of everyone's bank account, as per Cyprus, everyone would be up in arms. But an increase in GST has exactly the same effect. Prices go up, but your savings don't. Cuts in income tax don't help as these cuts don't compensate previous income earned. This is particularly concerning for people nearing retirement or in retirement. To be fair, the government should compensate those with savings. Otherwise it's just like taking money from your bank account...
Alert moderator
karl:
03 Nov 2015 3:46:32am
Our Government want the community to pay for the huge amounts of money they waste.
They have been incompetent in handling taxpayers money.
This will really slow the economy and bring in a bigger recession.
Alert moderator
Twiliteman:
03 Nov 2015 4:45:48am
It was the Labour government that lifted the tax free threshold in order to assist low income earners, the LNP only know how to hit the poor with alacrity by calling it a reform. This new government is willing to throw billions on dud fighter jets and new submarines but find it difficult to fulfill their obligations to all citizens. When you vote LNP the adults, you get a government that knows whats good for you, rather than what you think you voted for.
Alert moderator
anurse:
03 Nov 2015 7:30:08am
Why should government need to compensate taxpayers? Wouldn't it be better if all workers earned enough not to need redistribution of taxes?
Think how much smaller government could be if we did not need to redistribute taxes.
We need to re-think our whole economy, taxes, wages, everything.
Alert moderator
Jack:
03 Nov 2015 8:14:38am
'Why should government need to compensate taxpayers? Wouldn't it be better if all workers earned enough not to need redistribution of taxes?'
I believe that 'taxpayers' is a broad term covering all citizens. It should be remembered that there are many in the community who's only flexibility will be to buy less.
Some will buy less healthy food, forgo essential medications, forgo medical services, become hermits.
Less spending will do a power of good for the economy too!
People such as self funded retirees.
Any compensation will need to substantial and ON GOING!
Probably easier on the overall community if NG was scrapped, discounted CGT scrapped, big business pay their fair share, and other tax reduction devices by the very wealthy scrapped.
Alert moderator
ArthurJ:
03 Nov 2015 8:31:16am
Jack,
Self-funded retirees receive NO assistance from anyone. the great lie perpetrated on "no tax" for self funded retirees was based on a reasonable living from "safe" investments in retirement. Since various governments around the world screwed the economy and need low interest rates to main the joke we are doomed to worry.
Simple answer. Spend as much as you can as early as you can in retirement then grab as much as you can from government benefits better a bright light for a few short years in retirement and then a slow strangulation as you get older than a slow strangulation from the start.
Besides it would be good for the economy, all of that money being spent, an instant boost.
Alert moderator
anurse:
03 Nov 2015 8:58:46am
I think the GFC was a sophisticated redistribution of wealth from the middle classes to the wealthy. Sort of reverse French Revolution.
The poor are still poor, they have just expanded in numbers.
Alert moderator
anurse:
03 Nov 2015 8:52:01am
It would be easier if the those who have more paid more. Those who have more wealth tend to have more power, political and otherwise, and I don't see anyone volunteering to give up any of their hard-earned.
From what I have observed, there a a LOT of citizens who think they "earned" every single cent of their wealth, who think they do not benefit from paying more if they have more. Once you have a certain amount of money, the rest does not improve your subjective happiness, so why just amass money for the sake of money? Or maybe it is about power, not money.
Alert moderator
Philip Dawson:
03 Nov 2015 8:31:52am
over the past few decades company tax as a share of government revenue has dropped from around 30% to 10%, the GST was introduced to make up the shortfall, as our Government like most outside of tax havens saw no easy way of getting companies to pay their fair share of tax, rather than using tax havens and deductions to minimize it. No one can blame them economically for this, but many are angry at the multinationals lack of social responsibility in avoiding tax in the countries where they earn. Ireland has apparently found the right balance. Company tax rate there is 20% ( not zero like in the small Island Tax havens). There are next to no deductions. Several large multinationals have moved their European headquarters there ( rather than eg tax havens like the Channel Islands, or Bermuda etc in the West Indies), obviously deciding that 20% tax rate with not having to pay an army of lawyers and accountants and still risking expensive legal action over unpaid tax is a better financial deal than 30% tax rate and being able to minimize it down towards zero with expensive lawyers and accountants. Hence Ireland gets 20% tax out of the multinationals, those countries with a 30% tax rate gets not much. Perhaps we would get more tax revenue out of the multinationals by dropping company tax rate to 20% and removing many of the deductions?
Alert moderator
saline:
03 Nov 2015 8:59:46am
The writer says it quite clearly, straight up.
"The associated compensation package could mean the reform as a whole isn't worth doing, writes Michael Potter."
If that be the case, then the GST is actually targeting the poorest in our society, because they are the ones who will be compensated.
It's not the business people who live out of the till or on the company account who will pay it. It's the poorest.
Perhaps the government can create a tax that nets the business takings that aren't covered by business or private taxes. Isn't that how you describe these extraneous untaxed profits.
I mean, the tax they don't pay is what makes these business people so successful. If the worker could do this with his earnings, the country would be much better for it.
Alert moderator
Roscomac:
03 Nov 2015 9:31:53am
Before deciding to trust any politician who exhorts you to agree to increase the GST remember the last experience !
The GST was introduced with a promise to remove a vast array of State taxes including Stamp Duty, payroll taxes etc.
The result - none of the major State taxes were removed.
The GST was introduced with a promise to compensate the poorer members of scoiety.
The result - the poorer were given a pittance whilst tax cuts for the higher paid were of the order of a gross weekly wage for a lower paid worker.
Whatever happened to the promise "no-one will ever increase the GST - the maths is so simple at 10% that no-one will tinker with it" or similar BS we were fed last time.
Now, out of the blue we not have only numerous politicians advocating it but the media is campaigning for it.
If you are completely stupid vote for the wealthy PM now suddenly jumping on the bandwagon of taking ever more money out of your pockets via a hike in the GST !
Anyone who doesn't think the wealthier members of our society will not benefit the most from the proposal to increase the GST was either not born last time or has a memory problem !
Alert moderator
Dugong:
03 Nov 2015 9:52:10am
I often wonder what the left would complain about in relation to the GST if Keating had actually had the resolve to implement it himself, like he promised.
Alert moderator
WaitWot:
03 Nov 2015 10:04:55am
So whatever happened to all the talk about corporate profit shifting? Has this died already and so the only option left is to once again punish the people.
Let's hope Malcolm can stand up and be the leader we desperately need. C'mon Malcolm, I know you're rich but you've stated you paid your taxes. How about the Google's, Apple's and Rio Tinto's start paying their fair share... the top 10 shifters are likely to rake in trillions in unpaid taxes and you'd be doing yourself a HUGE favour with the electorate come next September
Alert moderator
ZolbexMacedon:
03 Nov 2015 10:17:54am
So the RBA comes out last week and whinges that inflation is too low. And these muppets want to increase taxes? That will achieve the exact opposite. Totally irresponsible fiscal policy. They will cause a recession.
Alert moderator
blax5:
03 Nov 2015 11:18:51am
Once again, the discussion is about spending less on people or collecting more tax. There is never a mentioning about reducing or cancelling the F-35 purchases. Are we really advocating to spend that amopunt of money and borrow to spend on people? Or are we borrowing to afford F-35s? And besides, didn't Howard tell us all that his GST reform would 'fix' something? Now we are back to square one and it is turning into a merry-go-round that is likely to cause me to vote informally. Expenditure discussions with one grand omission are not credible. And besides, 'everything is on the table. It's a big table", Morrison said. Not everything apparently.
Alert moderator
beacypete:
03 Nov 2015 11:50:35am
Here we go again. The capitalist class wanting to load more tax burden on the working class so they can increase profits and spend even more time in their private clubs or on their yachts drinking cocktails with expensive accountants while laughing at the mugs who fell for it again. It must indeed be human nature that poor people help the rich get rich at ther own expense. How else would society work if the rich didn't control things???
Alert moderator
hoolibob:
03 Nov 2015 12:15:16pm
"GST is less flawed than other taxes"
Rubbish! GST hasn't worked in any country it's been put in. The only thing good about it, it was introduced in other countries first so our greedy bunch of politicians can point to their now through the roof percentages & say this country or that is charging more than Australia.
Why is there a need for an increase? Thanks to poor management of our economy (both LNP & Labor concentrating only on mining) food manufacturing has been the only other bit on the economy pie chart left for a long time. Don't tell me & the other voters we've stopped eating & need to increase the GST because of it! Thanks to our $ being in a landslide against the US$ we're paying 35% more Aus$ GST for product. We're actually buying more of those products because poor regulation has seen the actually quantity of food inside foodcans drop (eg less than 50% beans in your can of homebrand baked beans) - again a GST bonus. Our meat prices have tripled meaning we're paying three times as much
GST. Fruit & vegetable prices doubled again a GST bonus. When it comes to food thanks to pollies sucking up to multinationals & large supermarkets we've a veritable GST gold mine.
One thing our LNP pollies can say is that they've given us the worst of all worlds. Not only have we got GST the bane of customers, shopkeepers who have pricing headaches, small business owners who have the BAS returns we've also got income tax that has been so poorly managed by both Labor & LNP we're being hit by bracket creep. Really, how hard was it to increase the no tax threshold by the CPI (that seems to be the only increase workers get nowadays).
Then we have poor Mr Glenn Stevens at the Reserve Bank who the big four banks won't listen to because they don't legally have to - thanks again to LNP giving one of them the Commonwealth Bank head seat at the tab;le. No-one stops & says why do we have to pay both the big four banks interest & the interest set by the reserve bank ontop. Why do average lenders have to have their household budgets stuffed up to help Mr Stevens put hold on the economy.
Average Aussies have been screwed every which way but loose. Still the multinationals, foreign investors, mining companies, banks, banks gold lenders & tax minimalisers are getting a free pass go. Not good enough!!!
Alert moderator
JackMeadows:
03 Nov 2015 12:36:04pm
Yet again I see that any question on the Multi National paying a lot more and fairer share of their tax on profits, gets the silent treatment.
WHY is that? ... What is it about these companies that they are protected from any discussion or measures to make them pay instead of evasion that we read about?
Alert moderator
jackmeadows:
03 Nov 2015 5:57:05pm
Still very silent on the Tax evasion front... must be a lot of it going on to warrant such silence.
Alert moderator
macca:
03 Nov 2015 12:50:29pm
How can you believe them?
All politicians are only in it for themselves. They do not care about the people they supposedly represent.
When the GST was first brought in it was supposed to replace other tax's. Guess what they kept them and still brought in a GST. The labour fought against it and guess what when they got in did they remove it NO. And the Liberal party said it would never rise.
When has a government ever truly given back to the people.
Now they want to increase it again. And their using the same stories as before. Oh if we raise it to 15% we can get rid of these other tax's. They wont and I wish they would stop lying about it.
Every time they over spend they insist that we should give them more. WHY?????
I think they the politicians should be forced to give up some of their perks. How about they pay their own airfares, expenses etc. They never will.
What rubbish.
Alert moderator
Codger:
03 Nov 2015 12:58:31pm
"Of course, we could cancel compensation for low-income earners. But good luck getting that idea through Parliament. "
This is the challenge for the LNP. The so called debate will really be about how an iniquitous tax can be sold to the punters and the Senate.
Alert moderator
Jane2:
03 Nov 2015 1:07:25pm
Here is an idea, offer compensation in the form of a refund. You are responsible for keeping yoru receipts and submitting them annually to the tax office where you will get a refund if your total taxable income is below a threshold.
Small businesses submit quarterly and annual GST statements to pay/be refuded their GST, why cant citizens who have much less turnover. Keep every receipt, that is fairly easy.
Alert moderator
rockpicker:
03 Nov 2015 1:14:47pm
Company tax is not flawed. It is a tax on profits to help[ pay for the company's use of our infrastructure. Why is ANY public money given to Private Schools????
Alert moderator
peterh:
03 Nov 2015 3:05:42pm
Private schooling should be subject to GST. Most people who choose private schools do so because of the perceived educaation benefits. The cost may affect which school, but rarely private vs public.
Foreign students are not an "export". The service is provided in Australia, so the GST should apply. Foreign students aren't exempt from GST on other items! And I'm not exempt from local GST/VAT when I travel to other countries.
GST should apply to everything, and the "compensation" should be targeted to low income earners only. It should be an allowance paid by Centrelink to its customers, separate to pensions etc so that it is visible. It should also be a credit "tax" paid via PAYE to all income earners under $50K, with a phase out for those between $35K & $50K. Over $50K there should be no more compensation (and I am one of those over $50K people).
Someone has to pay for the services we require & demand - not everything can be "everyone else".
Alert moderator
Regional Australia:
03 Nov 2015 3:59:09pm
If you are working, in a country such as Germany, you pay about 200 - 300 Euro a month to the government health insurance scheme, through a private insurance broker, that is how government health care is done in Europe. So, how to structure things, if you want to talk about fairness.
People in well off, inner city suburbs, know they have access to good quality hospitals and schools free of charge. They don't pay private health cover or school fees. They get on board with this argument, and don't want people to see, they are getting free education and health care, when really, they can afford to pay. As Joe Hockey pointed out, people in wealthy suburbs, are using free government services, living in mansions and claiming pensions. Something is clearly wrong with the system. And yet in government hospitals in regional Australia, the government can't afford to pay good doctors, or specialists, or diagnostic equipment, and people are being prescribed the wrong medication and die, when their medical chart is marked they are allergic to a drug. So, the government system, does not provide equal care, across it health or education systems. People in wealthy city suburbs, are taking up resources, that cost other people a fair go, who need access to good services.
And to me, what is fairer, means testing your income, and you pay a monthly amount for school fees and health care insurance to the government, if you are working to access those services. In other words if you enroll your children, at a state school, you complete an incomes means test form, based on your income, a sliding scale of school fees, be assessed annually. People who are working and do not have children at school, why are they paying for those who want services free of charge.
To me, government should approach tax from a different angle, and charge people who access education and health, a monthly premium for using such services. If you are on welfare, and you produce your Centrelink card, and a minimum service fee is charged. A user pays system.
You choose either the government insurance scheme, or your own private cover, with government schools you pay monthly school fees, or private school fees. And to me, people who pay for private health care, or private education, don't get a lot of tax concessions, as they pay twice, they pay the governments share of their taxes pays for free schools and hospitals, and then they pay for a private provider. These people are paying for the freeloaders.
These are our two biggest costs to governments, health and education, as government can't keep pace with funding, as costs outstrip, tax revenues. No tax is fair, the GST, is a tax, we all pay. It makes it easier, to raise revenue using a broad based GST tax, as it is the smallest increase of any tax to impose, to raise revenue. People want good schools and healthcare, and as the saying goes, quality costs, do you wan
Alert moderator
Bill Anderson:
03 Nov 2015 6:43:14pm
The best way to tax people is to get rid of all tax deductions. You earn, you pay. Then the people with the best accountants don't get to live of the rest of us. The accountants can then go and do something worthwhile.
Alert moderator
Comments for this story are closed, but you can still have your say.