If you ask me, the current situation where the NSW Premier, Mike Baird, has suggested an increase in the GST to 15% and the Australian Prime Minister, Tony Abbott, has praised him for his ‘very sensible’ and ‘very constructive’ suggestion, sounds more like a scripted and planned pantomime rather than a genuine exchange of ideas.
I think that the script, of this little show, is designed to introduce the Australian people, gently, to an increase in the GST while taking the ‘heat’ off Tony Abbott, whose popularity and acceptance levels have taken a number or serious hits in recent times. Remember, it was one of his election promises that he would not introduce any more taxes, so does he have Mike Baird doing his dirty work for him? Do these ‘actors’ really think the public is so gullible?
Tony Abbott then went on to justify his support for the idea of a hike in the GST by saying; “I think Australians should be hopeful that this generation of leaders is capable of addressing the big subjects, is capable of doing what’s necessary to make our country work better with better schools, better hospitals, more efficient and more effective government for everyone.”
Where Tony Abbott, the Government, and indeed all politicians and public servants, need to start is with the last part of the Prime Minister’s comments and that is with vastly more efficient and more effective government and this needs to be done long before raising more taxes and hurting the Australian people even further. The Australian taxpayer already pays a disproportionately large amount of tax and the Australian Government thinks that it is ok to keep increasing it?
On that subject, the original concept for the GST was that it would be accompanied by significant reductions in income tax. In other words, the GST was meant to replace a portion of the income tax burden rather than just add to that burden. True, we have had some income tax reductions but certainly nothing significant and barely worth a mention, in my view.
Bronwyn Bishop’s financial indiscretions are, I am quite sure, just the tip of the iceberg. Perhaps she is being ‘thrown to the wolves’ to give us the illusion that they are reigning in excessive spending and enforcing accountability? However, what we need is real action and not just more illusions. An impartial and detailed audit of the spending of all politicians, all political parties and all Government departments would, almost certainly, unearth staggering wastage and misuse of public funds.
A thorough ‘house cleaning’ of all aspects of the Australian Government, Government departments and our political system is required before further gouging of the taxpayer, through any form of taxation, should ever be considered. The Liberal Party keeps telling us that they are responsible financial managers but it is time that they actually proved that claim without simply raising taxes to cover up government ineptitude and their own self-serving policies.
In addition, maybe 15% doesn’t sound like a huge amount, when the Australian people have already been forced to adapt to a 10% GST. The number 15 is only a little larger than 10, right? However, we are actually talking about a 50% increase in this tax! If an increase is genuinely warranted, does it really have to be 50%? What the hell are they planning on doing with all that money? What would happen if the Government announced a 50% increase in any other form of taxation, such as income tax, or car registration costs, or land tax or any of the dozens of other taxes that are levied on the people? Would people stand for a 50% increase in other forms of taxation? I am sure that the answer would, most definitely, be “no way!”
While on the subject of the GST, does anyone remember when the Liberals first tried to introduce the GST and were whipped, soundly, for that suggestion at the 1993 election? And then when John Howard was elected leader of the Liberals he promised, in 1995, that they would “never, ever introduce the GST”? Yet he turned around, just 3 years later, to introduce the 10% GST that Australians now have to pay? Do you remember that?
And now the Australian people are being set up for further substantial increases is the GST and being told it is the best thing for them. Really?
An increase in the GST must not be taken in isolation, as this would be incredibly irresponsible. The entire taxation system in Australia is in dire need of overhaul. In 1926, Australian taxation law comprised 126 pages of text. In 2011, taxation law runs to 13000 pages and 9 and a half million words. To this mountain of verbiage must be added the enormous volume of material produced by the ATO every year by way of guidelines in an attempt to clarify the system for taxpayers and accountants, and rulings for individual taxpayers and companies, most of which further complicate the system. Granted, government may be inefficient, but the taxation system makes government look like a paragon of efficiency. Having said that, the GST is the most efficient tax we have, and it i equitable because it is a user pays system. The more you spend, the more you pay. People who spend more are people on higher incomes. The GST is both simple and effective. If you buy a Hiyundai for $24000 at 10% GST you would pay $2,181 GST. If you buy a Rolls Royce for $1,000,000, you would pay $90,909 GST. This works exactly as income tax rates do, except that it is fair and above all, efficient, as it costs about 100 times less to collect. Extrapolate this to a logical conclusion, why not have GST at 30% and eliminate personal income tax altogether? The ATO currently has 25,000 employees. If there were no individual tax returns, they might get by on 10,000, freeing up 15,000 for more productive employment elsewhere. Another efficiency and cost dividend. I will get back to you another time about the taxation system itself and superannuation another time.