06/12/2024
๐ข ๐๐ฌ ๐๐ญ ๐๐ข๐ฆ๐ ๐ญ๐จ ๐๐๐ญ๐ก๐ข๐ง๐ค ๐๐๐? ๐ ๐๐จ๐ฅ๐ ๐๐ญ๐๐ฉ ๐๐จ๐ซ ๐๐ฎ๐ฌ๐ญ๐ซ๐๐ฅ๐ข๐โ๐ฌ ๐๐๐ฑ ๐๐ฒ๐ฌ๐ญ๐๐ฆ ๐ฐ
Allegra Spender, MP for Wentworth, has sparked an important conversation about the future of Australiaโs tax system. Speaking at a CPA Australia event, she highlighted that any serious tax reform must include a review of GST (Goods and Services Tax) โ even if itโs politically challenging or difficult during a cost-of-living crisis.
๐ก ๐๐ก๐ฒ ๐๐จ๐จ๐ค ๐๐ญ ๐๐๐?
Australiaโs GST rate is one of the lowest in the OECD, meaning weโre underutilising a tax that other countries rely on.
Increasing GST, or broadening its scope, could reduce income taxes significantly, making it easier for Australians to keep more of what they earn.
GST is a consumption-based tax, meaning it taxes what people spend rather than their income. This approach is harder to avoid and applies to everyone, including visitors and businesses.
๐ฅ ๐๐ก๐๐ญ ๐๐๐จ๐ฎ๐ญ ๐๐ฎ๐ฅ๐ง๐๐ซ๐๐๐ฅ๐ ๐๐ฎ๐ฌ๐ญ๐ซ๐๐ฅ๐ข๐๐ง๐ฌ?
Spender stressed that any change to GST must include a carefully designed compensation package to protect those who are most affected. For example, welfare payments could be increased to offset the impact on low-income households, who spend a larger share of their income on essentials.
๐ ๐๐๐ฅ๐๐ง๐๐ข๐ง๐ ๐๐ญ๐๐ญ๐ ๐๐ง๐ ๐
๐๐๐๐ซ๐๐ฅ ๐๐๐๐๐ฌ
Reforming GST wouldnโt just involve the federal government โ states play a big role, too. Spender suggested that GST reform could help address state tax challenges like payroll and land taxes. However, fair distribution of GST revenue and its predictability for state budgets would need to be part of the conversation.
โณ ๐๐ก๐ฒ ๐๐จ๐ฐ?
While inflation needs to stabilise before reforms are introduced, Spender sees an upcoming opportunity: the Productivity Commissionโs review of GST and equalisation in 2026. This could open the door to meaningful changes that strengthen Australiaโs economy and create a fairer tax system.
๐ ๐๐ก๐ ๐๐ข๐ ๐ ๐๐ซ ๐๐ข๐๐ญ๐ฎ๐ซ๐
GST reform is part of Spenderโs broader vision for tax changes, outlined in her Tax Green Paper. She believes a major reform package, including GST, could deliver the scale of change needed to ensure Australiaโs long-term prosperity.
๐ ๐๐๐๐ ๐ญ๐ก๐ ๐๐ฎ๐ฅ๐ฅ ๐๐ซ๐ญ๐ข๐๐ฅ๐ ๐ก๐๐ซ๐: https://www.accountingtimes.com.au/tax/gst-a-critical-lever-in-tax-reform-approach-allegra-spender?utm_source=Accounting%20Times&utm_campaign=06_12_2024&utm_medium=email&utm_content=Daily&utm_emailID=*|MMERGEEM|*
A review of GST must form part of any major tax reform approach by the government despite the potential political fallout, the member for Wentworth has said.
