So why the look to hike up GST? Peak accountancy body, Chartered Accountants Australia New Zealand (CAANZ) has released thought-provoking GST modeling. Latest CAANZ modelling shows that a 15 per cent GST rise would raise $256 billion over just four years.
CAANZ modeling further suggests eliminating all exemptions so that 100 per cent of consumer goods and services spending is subject to GST. That means health, sewerages, education, water and even fresh food would all become hitched to the GST wagon.
So say for moment that the potential 15 per cent GST increase does take effect. What does that mean for Australians? Using CAANZ modeling, the flow-on effects could look something like this:
- $96 billion over four years for personal income tax cuts
- $62 billion for increased benefits and pensions
- $13 billion for increasd family payments
- $94 billion to fix federal shortfalls, abolish insufficient state taxes or finance state-specific investments in health, education and infrastructure
According to Treasury officials, the tax reform agenda is currently in the ‘discovery phase’. Yet with the next election looming in 2016, the Government is certainly paying close attention to this option. So what does this mean? Watch this space.