Publication date: 22 Jul 21 |
Source: THE TAX INSTITUTE
SYDNEY, 20 July 2021: With the right GST regime in place, hosting the Olympic games in 2032 could see Australia collect $750 million from international visitors, analysis from The Tax Institute’s Director of Tax Policy and Advocacy, Andrew Mills, CTA (Life) has shown. This comes ahead of the Wednesday 21 July announcement expected to confirm Brisbane as the 2032 Olympic host city.
The immediate benefits to the Australian economy from the Sydney 2000 Olympics were estimated at a $6-7 billion addition to GDP that year, creating 100,000 new jobs and boosting tourism by 1.6 million visitors per year[i]. This was in addition to the infrastructure that was created for the Olympics and which continues to be enjoyed by NSW citizens and used for sporting events (for example, the 2003 Rugby World Cup and 2009 Masters Games).
“Much of the additional revenue generated by hosting the Olympics comes from overseas visitors. If all of that money included GST and about half was spent by international visitors, then we have raised millions of dollars in extra GST from those tourists,” Andrew explains.
“So, if the Brisbane Olympics were held today, we might collect $250 million from international visitors.”
However, with the correct tax reforms, and an efficient tax system in place, that figure could be much higher.
“Only about half of our GDP is currently subject to GST and our rate of GST is well below the rest of the world. If we increased the GST rate to 15%, like New Zealand, and applied it to all spending, suddenly we could collect around $750 million in potential GST revenue from international visitors. That number will increase in the years to 2032,” Andrew says.
“The Olympic Games, putting the 2021 Tokyo games to one side, usually provides enormous immediate and long-term economic benefits to the host country. It not only attracts tourists both for the games and long after but also showcases the host country, its people, industry and lifestyle.
This is one simple example of how the Australian economy, the Australian people, could benefit from tax reform today. The time for tax reform is now so that we can reap the benefits in the future.”
The Tax Institute’s recent report into the options for tax reform, the Case for Change, lays out the ways in which we could shape GST reform to allow this kind of economic growth as part of holistic reform of the system.
“Increasing GST isn’t a step to be taken in isolation and needs to be considered as part of wider reform. So on the one hand we might increase GST, and on the other, look to compensate those Australians hardest hit with increased social security, tax cuts or other appropriate compensation.”
For more information, please contact:
Kelly Emmerton – The Tax Institute email@example.com 02 8223 0029