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Tony Abbott wants GST left alone and hopes to lower taxes over time Tony Abbott wants GST left alone and hopes to lower taxes over time
(about 1 hour later)
Tony Abbott says the GST should not be broadened – and says his aspiration over time is to lower taxes, not increase them.Tony Abbott says the GST should not be broadened – and says his aspiration over time is to lower taxes, not increase them.
Despite unveiling a budget last Tuesday which contained new tax increases and significant cuts to grants Canberra gives the states to run essential services, the prime minister told 2UE radio on Tuesday morning that his view was “we pay more than enough tax already”.Despite unveiling a budget last Tuesday which contained new tax increases and significant cuts to grants Canberra gives the states to run essential services, the prime minister told 2UE radio on Tuesday morning that his view was “we pay more than enough tax already”.
The remark from Abbott came as renewed debate over the rate and the base of the GST, and the revenue outlook for state governments, gathers momentum post-budget.The remark from Abbott came as renewed debate over the rate and the base of the GST, and the revenue outlook for state governments, gathers momentum post-budget.
Queensland LNP senator Ian Macdonald has argued the GST should be broadened to cover fresh food in line with the original proposal sought by the former prime minister John Howard in 1998, but rejected by the Senate in 1999.Queensland LNP senator Ian Macdonald has argued the GST should be broadened to cover fresh food in line with the original proposal sought by the former prime minister John Howard in 1998, but rejected by the Senate in 1999.
Macdonald, who was passed over for a frontbench position post-election and frequently makes his displeasure about that known, has shifted post-budget from recent preoccupations including public opposition to the prime minister’s paid parental leave scheme to arguments about broadening the GST.Macdonald, who was passed over for a frontbench position post-election and frequently makes his displeasure about that known, has shifted post-budget from recent preoccupations including public opposition to the prime minister’s paid parental leave scheme to arguments about broadening the GST.
The Queenslander also told ABC news radio on Tuesday morning that the budget had not been well sold to voters. “Perhaps the selling job hasn’t been as good,” he said.The Queenslander also told ABC news radio on Tuesday morning that the budget had not been well sold to voters. “Perhaps the selling job hasn’t been as good,” he said.
Last week’s budget has sparked a powerful voter backlash, according to the latest opinion polls, which show Labor would easily win any federal election held today despite being dispatched to opposition only seven months ago.Last week’s budget has sparked a powerful voter backlash, according to the latest opinion polls, which show Labor would easily win any federal election held today despite being dispatched to opposition only seven months ago.
The measures have created profound frustrations and nervousness behind the scenes – particularly about centralised decision making and absent dialogue between the leadership and the Coalition party room – but thus far at least, backbench outbreaks post-budget have been relatively muted.The measures have created profound frustrations and nervousness behind the scenes – particularly about centralised decision making and absent dialogue between the leadership and the Coalition party room – but thus far at least, backbench outbreaks post-budget have been relatively muted.
An exception is Macdonald who stirred the pot by telling Fairfax Media that the GST rate should not be increased but the base should be broadened.An exception is Macdonald who stirred the pot by telling Fairfax Media that the GST rate should not be increased but the base should be broadened.
He then repeated the basic arguments on ABC news radio early on Tuesday morning – adding this was an in-principle view, given he currently lacked the staff and resources to come up with a detailed proposal for change. “I do think there is an opportunity to go back to what we proposed in 1998,” Macdonald told the ABC.He then repeated the basic arguments on ABC news radio early on Tuesday morning – adding this was an in-principle view, given he currently lacked the staff and resources to come up with a detailed proposal for change. “I do think there is an opportunity to go back to what we proposed in 1998,” Macdonald told the ABC.
Of the broader post-budget challenge, one of Macdonald’s party room colleagues, Victorian Liberal Russell Broadbent, counselled the task before the government now was to dig in and sell the budget proposals and not inflict further surprises on the electorate by either wandering off on tangents, or by watering down proposals unveiled in the economic statement.Of the broader post-budget challenge, one of Macdonald’s party room colleagues, Victorian Liberal Russell Broadbent, counselled the task before the government now was to dig in and sell the budget proposals and not inflict further surprises on the electorate by either wandering off on tangents, or by watering down proposals unveiled in the economic statement.
Broadbent reasoned voters would punish the government even further if it was seen to be flip flopping. “There should be no stepping back, because we’ll be marked down even further,” he said.Broadbent reasoned voters would punish the government even further if it was seen to be flip flopping. “There should be no stepping back, because we’ll be marked down even further,” he said.
Post budget, there has been renewed debate about the GST because the Abbott government moved in last Tuesday’s economic statement without prior consultation or warning to cut $80bn from funding to the states for health and education.Post budget, there has been renewed debate about the GST because the Abbott government moved in last Tuesday’s economic statement without prior consultation or warning to cut $80bn from funding to the states for health and education.
The premiers see this as a clear attempt by Abbott and Joe Hockey to force them into a posture of publicly advocating a GST increase in order to improve their revenue stream, a tactic they have rejected.The premiers see this as a clear attempt by Abbott and Joe Hockey to force them into a posture of publicly advocating a GST increase in order to improve their revenue stream, a tactic they have rejected.
Some premiers have signalled they want to progress a recent proposal by the Commission of Audit to give them a de facto income tax power.Some premiers have signalled they want to progress a recent proposal by the Commission of Audit to give them a de facto income tax power.
But momentum is growing for the GST issue to be revisited. Welfare groups accept there needs to be a debate about the tax, including compensation for low income earners in the event the rate is increased or the base is broadened.But momentum is growing for the GST issue to be revisited. Welfare groups accept there needs to be a debate about the tax, including compensation for low income earners in the event the rate is increased or the base is broadened.
Former Victorian premier John Brumby – the chairman of the soon-to-be-abolished Council of Australian Governments (COAG) Reform Council – argued on Monday night that increasing GST revenue was inevitable.Former Victorian premier John Brumby – the chairman of the soon-to-be-abolished Council of Australian Governments (COAG) Reform Council – argued on Monday night that increasing GST revenue was inevitable.
The real debate, Brumby said, was about whether to broaden the base or raise the 10% rate, how to compensate low income earners and pensioners, and how the proceeds would be distributed.The real debate, Brumby said, was about whether to broaden the base or raise the 10% rate, how to compensate low income earners and pensioners, and how the proceeds would be distributed.
“In my view the real debate about the GST is not about whether it needs to increase; I think that’s inevitable. The real debate is about the nature of the increase (base versus rate, or both), the compensation provided to low income earners and pensioners, and the distribution of the proceeds (the states versus the rest).”“In my view the real debate about the GST is not about whether it needs to increase; I think that’s inevitable. The real debate is about the nature of the increase (base versus rate, or both), the compensation provided to low income earners and pensioners, and the distribution of the proceeds (the states versus the rest).”
Speaking to journalists at Parliament House, Abbott said the states could push for a higher GST as part of a federal/state process to reform the federation, but he wanted lower taxes.
“The GST is a tax which belongs to the states and obviously it is perfectly within the bounds of possibility for the states to want to discuss the GST as part of the federation white paper ... but I want taxes to be lower, simpler and fairer,” he said.