Treasurer Scott Morrison says everything is on the table when it comes to tax reform, but the process remains in its “discovery” phase.
A Coalition MP, David Gillespie, has asked the parliamentary budget office to cost a 15% GST levied on more goods and services. The costing suggests the proposal would raise $65.5bn in 2017-18.
The Gillespie proposal would extend the GST to childcare, fresh food, education and health, water and sewerage.
Morrison welcomed the proposal while pointing out that it is not government policy.
He indicated there were “very real and practical reasons” why the GST was not applied to services such as health and education. “So as you work through any possible options, you have to work through those issues,” the treasurer said on Monday.
Without committing to specifics, the government is clearly softening the ground for an increase in the GST as part of a tax package that the prime minister says will be focused on improving economic efficiency and boosting economic growth.
The Labor leader, Bill Shorten, on Monday morning again expressed opposition to a GST increase, on the basis it would hit low- and middle-income earners.
“Fifteen percent every time you go to the supermarket or you pay the doctor’s bill or you go to hospital – the people who pay this are the people who are going to work every day and battling to make ends meet,” Shorten told the ABC.
“I don’t believe that reforming this country should have to be paid for by people paying extra in their GST.”
Morrison pointed to positive collaboration with state governments on tax reform, contrasting this with a stance from Shorten that he characterised as “shouting at the clouds”.
Views on a GST increase within state governments are mixed.
On Monday morning, South Australian premier Jay Weatherill said the states were not raising enough revenue to pay for the services the community expected.
He said the states also faced the prospect of the huge cuts proposed in the 2014 budget.
“If we’re not talking about increasing the overall tax take, then you’re not going to be able to essentially fill the hole that was created by the $80bn cuts to health and education that occurred in Joe Hockey and Tony Abbott’s first budget,” Weatherill said.
