Do sustainable services require GST reform?

With many Australians struggling with the cost of living, it may not be the best time to be discussing paying more GST.

But, with the federal budget projected to return to substantial deficit within two years, and most Australian states and territories also in deficit, this may be a conversation we have to have.

Most Australians expect quality public services like health and education, placing high value on programs like Medicare, the PBS and the NDIS. We take pride in Australia’s social safety net, and support investments in roads, rail, energy transition and defence.

With the lowering of company and personal income tax now a bipartisan position, the revenue challenges faced by governments around Australia won’t be solved by tinkering around the edges.

In 2023-24, Treasury expects the GST to raise $86 billion, based on a rate of 10 per cent and exemptions for things like food, health, education and childcare.

Australians might decide that no amount of compensation to lower income earners could offset an increase in the GST rate or broadening of the base, but the revenue upside is obvious.

It’s equally obvious that it is unfair to leave future generations to pay for services and income support governments borrow to fund today.

With federal Treasurer Jim Chalmers talking to the need to work with state and territory governments to ensure the sustainability of services in his recent budget speech, the funding of those services seems like a natural agenda item.

If we say no to GST reform, what will we say yes to?  Take your position; this discussion can’t be put off forever.

This article also appeared in The West Australian newspaper.


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