South Australia’s Labor Premier has pushed a GST enhance higher up on the national agenda, outlining a radical strategy he says will help the states overcome a well being funding crisis.
Jay Weatherill told AM that taking the GST to 15 per cent is part of a broader tax strategy to be place to his state and federal counterparts formally in a fortnight at a Council of Australian Governments meeting.
“We need to have added revenue to meet the increasing overall health care needs of our nation,” Mr Weatherill said.
Mr Weatherill desires to lift the GST and let the Commonwealth maintain the additional GST income – about $ 34 billion – which he recommended would be used on cutting organization tax.
He then wants the states to get a share of about a fifth of the income tax raised by the Commonwealth.
He mentioned he made it that way as income tax is developing more rapidly than the GST, and because the states pay for the quickly developing overall health technique.
“You need to have a taxation base which is developing at about the price of development of well being care expenditure,” he stated.
“That is income tax. If we get a share of that that will much more approximate our demands.
“We feel this is the recipe for an agreement with the Commonwealth. That is why we have put this idea up.
“It gives us a fighting likelihood. At the moment we’ve got no possibility. The only decisions in front of us are some horrible reductions in solutions or some huge increases in state taxation or user pays charges – they’re just not issues that the community is ready to purchase.”
‘I have a lot of respect for Jay, but I disagree with the proposal’
Federally the Labor Party is firmly opposed to any enhance in the GST. Federal Labor attempted all week to attack the Government with inquiries implying the GST will be broadened or improved.
Labor’s assistant treasury spokesman Andrew Leigh denied it was a difficulty for the Opposition to have a Labor Premier putting forward the strategy.
“I am entirely comfy with state and territory leaders taking a diverse position to the celebration,” Mr Leigh said.
“I have got a lot of respect for Jay – he is one of Australia’s critical economic reformers – but I disagree with the proposal that he’s place forward.
“I think the challenge with raising the GST is that it really is not, according to the Government’s own numbers, a more effective tax than the earnings tax and it is certainly a much less equitable one.”
He said a 15 per cent GST would imply a “3 per cent hit on the most affluent households but a 7 per cent hit on the poorest households”.
Mr Leigh said Federal Labor had outlined plans to raise about $ 70 billion further income.
New South Wales Treasurer Gladys Berejiklian welcomed Mr Weatherill’s thoughts.
She stated her state’s initial priority was addressing the looming gap caused by the developing price of well being.
Ms Berejiklian said the State Government believed the best way to cover that shortfall was to lift the GST to 15 per cent – but compensate all households with incomes of $ one hundred,000 or much less.
The Federal Government stated all options are on the table.
Subjects: tax, wellness-policy, states-and-territories, federal-government, sa