There has been a lot of political sparring over the GST in the last week and most of it has been part of a tried and true scare campaign.
It is disappointing to see such a fundamental component of our tax system reduced to ammunition in a political slanging match.
The Tax Institute has long called for a mature debate on our future tax system – a debate that must include the $50 billion per year GST. This has also featured as a high priority in our recent member survey of election priorities, particularly the reform of State taxes supported by increased funding from the GST. It is clear that tax professionals want the Government to take a leadership position on State tax reform, which includes increasing reliance on the GST and abolishing inefficient and complicated State taxes, such as conveyance duties and insurance duties.
The Federal Coalition’s proposed tax policy white paper has the potential to soon mark the beginning of a mature political debate on the role of the GST in our tax system.
Without reform, our tax system will not be able to provide sufficient revenue to meet the significant spending commitments of the coming years. Worse still, our current tax system continues to hamper economic growth, with State taxes such as stamp duties on homes and insurance duties amongst the most inefficient taxes in the country.
We know that 90% of the entire tax take in Australia is generated by only 10 taxes, with an additional 115 taxes generating the remaining 10% of revenue.
We will continue to advocate for a mature debate on constructing a simplified tax system that supports economic growth and a shift towards more robust revenue streams.
Here’s hoping our political leaders are listening; after all, it is essential to safeguard Australia’s future.
Robert Jeremenko CTA