CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Morrison Clarifies Aus Govt's Position On GST Reform

Morrison Clarifies Aus Govt's Position On GST Reform

by Mary Swire, Tax-News.com, Hong Kong

19 February 2016


Australian Treasurer Scott Morrison has said that "the times are not right" for an increase in the goods and services tax (GST).

In a speech to the National Press Club in Canberra, Morrison said: "This Government will not be taking a GST increase to the next election. The times are not right for that, and this Government would never seek to change the GST unless we put it to the Australian people first."

Morrison explained that the Government had modeled a scenario in which the GST is raised to 15 percent, the level of personal income tax cuts "maximized," and the compensation package for low earners set at AUD6bn (USD4.3bn). According to Morrison, the "growth dividend" in this scenario is at best between zero and 0.3 percent.

"In implementing the arrangement, of course the compensation bill would have had to be higher than AUD6bn, just to deal with independent retirees and others directly not influenced by the tax or transfer system. That would have been another AUD2bn to start with. By the time you got through the Senate, by the time everyone else had lined up for compensation, you would have been at a figure approaching AUD16bn or so, and that's one percent of gross domestic product (GDP) on top of outlays," he added.

Morrison said that, "on balance, the Prime Minister and I and the Cabinet decided that this was not a goer, and that it was not go for launch, it was something that had to be put away."

Morrison's comments came after Prime Minister Malcolm Turnbull announced that the Government "will not be taking a proposal to increase the GST to the election." He told reporters that the Coalition had "looked very carefully at every angle, every possible change to the tax system," including cuts to company tax and income tax rates and an increase in the funding given to state governments.

Turnbull said: "We are not a Government [that has] said 'oh it is all too hard, we are putting it into the political too hard basket.' We have looked at it carefully and diligently, as Australians expect us to do."

TAGS: tax | gross domestic product (GDP) | corporation tax | goods and services tax (GST) | Australia | tax thresholds | tax rates | tax reform | individual income tax | services

To see today's news, click here.

Leave a comment

Read our Posting Guidelines

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 

Log into Tax-News+
Not registered yet? Find out about our daily news alert service »

 Email: 
 Password: 

Login »

Forgotten your password?







Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »