Thursday, July 23, 2015

GST hit-ups stifle more valuable conversation

Like Stewart to Stewart, Mason to Foran, or Cherry-Evans to the Gold Coast (and back again), we were hit with a Northern Beaches 1-2 this week.

Try time

Ever the pugilist, the Prime Minister and Member for Warringah did the grunt work early. Way back in 2014, the first Abbott-Hockey budget downsized projected spending on health and education over the next decade, pushing $80 billion dollars of ‘cuts’ or ‘efficiency measures,’ depending on how you feel about that sort of thing.

His offload to NSW Premier, Member for Manly, and Liberal Party teammate Mike Baird was a while in the making. But arrive it did – the unstoppable force calling on us to save the health system by upping the GST from 10 to 15 per cent in a barnstorming Monday address.

Given Australia’s steadily low GST, it is perhaps no surprise that the debate around increasing our tax on consumption has been around for nearly as long as the tax itself. Most relevantly for our purposes, the No Land Tax party called for precisely the same rise before the recent state election, in a flurry of yellow bibs and clip art testimonials.

But both the Premier and No Land Tax pitch GST reform in artificially narrow terms – the one true path to health system deliverance, and to shifting fiscal responsibility away from landowners, respectively.

And, of course, as a regressive tax, low-income renters would feel the pinch of an increased GST more than most – even if it remains unclear precisely where the hypothetical compensation for this hypothetical rise would leave this vulnerable group.

This state would benefit from a broader discussion about tax reform than the one currently enveloping the GST alone. In particular, the Tenants’ Union is an established proponent of a broad-based tax, applying to all land in New South Wales, as a boon for renters and owners alike:

Land tax is an important source of NSW State Government revenue. Land tax also has the potential to improve housing affordability for purchasers and renters, and economic activity generally. Our present system of land tax does not realise this potential, and should be reformed.”

There is no single path in tax reform - the PM and Premier’s fancy footwork in pushing the line notwithstanding. And we say land tax reform should play a prominent part in a much-expanded conversation.

Read more about the Tenants’ Union’s land tax reform position here

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