GST rise who will benefit 15% GST proposed

"THE top-level push to increase the GST could be undone by a row over who would pay extra, and who would benefit from the additional revenue.

The dispute boosts the prospects of a counter proposal a two percentage point increase in the Medicare levy on wages backed by Victoria, Queensland and the ACT.

Other options include an increase in property taxes or even payroll tax, usually considered to be an employment killer.

The tax matter will be debated today and tomorrow as Prime Minister Tony Abbott and the premiers address problems as broad as greater efficiency in service delivery and as narrow as halting the spread of the killer drug ice.

And even if tax were changes agreed to it is unlikely Prime Minister Abbott would implement them before the election scheduled late next year.

No substantial progress will be made on changes this week but the Council of Australian Governments talks will mark a critical move towards reshaping the tax system.

Influential state leaders are suggesting a rise in the GST from 10 per cent to 15 per cent with the bigger tax take being used to fund public hospitals which are adding crippling costs to their budgets each year.

Senior business figures want the same increase, but they want the extra revenue used to scrap state taxes they have to pay. They want to be the indirect beneficiaries of a change in the indirect tax.

"Australia's states and territories are responsible for some of the most harmful taxes levied by Australia's governments," head of the Australian Industry Group Innes Willox said today.

"What we've got is a tax system that's designed in the 20th century and we're operating in a 21st century economy."

Another claimant to extra money is Western Australia which insists its declining minerals industry means it needs a bigger share of the GST pot and other states deserve less.

Then there is the question of who should pay in the first place, a matter which is ensuring the federal Opposition and Labor premiers are opposing a GST strategy.

The opponents argue low income earners and those on welfare would pay more proportionally than the well off if the tax went up. Even with the GST exemptions, the additional costs would be significant for them.

The 20 per cent of households with the lowest income spend about nine per cent of their disposable income on GST- affected goods and services, according to Alan Duncan on Curtin University. The richest households spend just 3.5 per cent of disposable income on these purchases.

And opponents warn it would be difficult to compensate them, particularly if the disadvantaged don't pay income tax and so could not gain from reductions there.

One proposal is for the GST to be extended to financial services which Labor's South Australian Premier Jay Weatherill calculates could raise an additional $3.6 billion a year and not affect the poor. It is a proposal Mr Weatherill wants discussed"
news.com.au

 

I always have a sense of unreality reading these articles and seeing what politicians and their lackeys say.

 

My sentiments exactly. Analyze crippling expenditure,.adjust accordingly within allocated funds. I remember the original idea behind gst being to put in play a tax on goods and services, then remove unnucessary taxes and pay tax only for what you use. All that happened was gst came in and the lower earning mixed taxes on the sale of goods were replaced with this income generating giant. An increase in gst can only mean an increase in everything.

 

Why not just eliminate income tax, then everyone would benefit.

 

That would most likely mean reducing salaries of career bueracrats and/or firing many of them. Then it would be public sector union propaganda on TV.

 

So we have a multi-layered tax system where after paying income tax, we then fork out additionally GST that one may or may not be entitled to claim back including an absolute raft of taxes relating to a multitude of different jurisdictions with governments tentacles. Look at fuel tax for example.

Making a Tax system simple makes sense but that logic is not in the interest to those that like it complex where it is more likely of unknowingly breaching a clause deep within.
This leads to addition noncompliance fees and hence more tax takings, for loop holes to hide in and employment for a raft of accountants feeding off the system. it appears to be by design to be inherently complex with all of the liability directed at the Taxpayer as per your declaration of compliance.

 

I don't know the minute details but I'd hazard a guess that the crippling costs have a lot to do with a runaway big pharma industry and the script-happy doctors that they churn out. Charging taxpayers an arm and a leg to provide people with "medicines" with dubious efficacy and a shopping list of side effects is starting to add up to more than the system can handle.

Perhaps taxing these companies more than 6% would be a good place to start?
http://www.afr.com/news/policy/tax/...-million-on-8-billion-revenue-20150701-gi25qb

 

+1 lil doggy

 

Unfortunately it's a side effect of the 'Grey Tsunami'. There's about 5000 new pensioners joining the ranks each week. Most of them eligible for heavily subsidised "medicines" among other things.

They also stop paying taxes, and require income support. It's changing the dependency ratio (pensioner:tax payers).

Number of workingage individuals per individual aged 65 years or older

 

Just in case you missed this part.
This is huge, not to mention stupid, only a fool who has no understanding of how things work in this sector would utter those words. Its a very broad area, however one example is a bank currently works on input credits.This would change if they charged GST on accounts and transactions and any GST profits from bank to state would be negated by the bank claiming back.
Also Finacial services could well include precious metals.

 

I thought it'd be unlikely that I found myself agreeing with you, but I do on this.
For years we've heard about the the massive costs of health care. And always about how and by whom it will be paid. Never, ever about how to make the greedy, over-charging, over-servicing, rorting, thieving pigs get their snouts out of the trough!

Ah, normal programming has resumed.

I'm already too poor to pay income tax, and I'm struggling as it is.
Your "solution" would disadvantage me even more. Well probably not, as the threshold would have to be lowered *a lot*, much more than would come from any "compensation" arrangement for the proposed 15% GST.
So I'd just be much deeper in the shit. Everything would cost me 5% more, except essentials like water and food, which would cost me 15% more.
And all without any f#$king compensation whatsoever.

And then the next time the incompetent, corrupt, self-serving, clueless, mongrel dogs that "govern" us completely screw things up again, and need more money?

"Beer Up, Cigs Up, GST Up..."

Any so on, and on, and on, until GST is over 25%

The 10% was supposed to be SET IN STONE, and must remain so.
ANY change will be the thin edge of the wedge... (as if 10% wasn't already)

 

The usual political rules will probably apply:

1. Never cut costs when you can increase taxes
2. If introducing a new tax, neglect to remove the old taxes.
3. Respond to all vociferous special interests and ignore the quiet majority.
4. Rule out sufficient coverage to make the solution meaningful.
5. Always ensure that the net bureaucracy to deal with the taxes increases.
6. Never be afraid to dumb down a problem until it can be fitted up with a simple 'Pro' an 'Anti' soundbite for the partisans.

Or am I being cynical?

 

Sorry, not very good at reading emoticons... :/

 

^^ So insuring the top end of town pays its share is a "socialist theory"? I would have thought it was just good sense.