Extract from The Guardian
Essential poll finds only 23% of voters support raising the GST, well
behind the 78% who want to force multinationals to pay a minimum tax
rate
Increasing the GST remains voters’ most disliked change to the
taxation system, a new poll shows, as the federal government abandons
the idea and state premiers cancel a tax reform summit because they are
not sure what they should be talking about.
A poll by Essential Media found only 23% of voters supported the idea of increasing the GST, way behind the 78% who back the idea of forcing multinationals to pay a minimum tax rate or the 58% who support removing superannuation tax concessions for high-income earners.
And, despite several months in which the federal government left a GST hike “on the table” and talked up the idea of using its revenue to deliver personal income tax cuts, the level of voter support in the poll remains unchanged since last July.
When asked what they thought the point of tax reform should be – what revenue from tax changes should be used for – 58% said “address the budget deficit” and 30% said “maintain services like hospitals and schools”.
The prime minister, Malcolm Turnbull, told his party room meeting on Tuesday the government’s economic modelling showed the GST hike did not “pass the first hurdle” – economic feasibility.
The meeting came as Guardian Australia revealed the state premiers and chief ministers had cancelled a special meeting to discuss tax reform until the Turnbull government gave them some idea of what they should be talking about.
A meeting of the Council for the Australian Federation had been planned in Darwin in early March but, late on Monday, the Northern Territory’s chief minister, Adam Giles, wrote to his counterparts saying the meeting had been cancelled because the debate had become so unclear since the prime minister effectively ruled out a goods and services tax increase.
“Since I wrote to you, the national tax reform discussion has become even more uncertain,” Giles wrote. “Until such time the prime minister provides greater clarity with the commonwealth’s proposed tax reform package, any CAF discussion would only be speculative and add little to the national conversation. I therefore recommend that any further discussion around taxation reform is deferred.”
Some state premiers, including the Liberal New South Wales premier, Mike Baird, and the Labor South Australian premier, Jay Weatherill, had been discussing ways a GST increase could cover compensation for low-income earners and personal income tax cuts, and also provide additional money to the states to cover the looming “fiscal cliff” for hospitals and schools funding.
Despite the commonwealth previously praising those premiers for their constructive contributions to the tax debate, the federal treasurer, Scott Morrison, has now clarified that the commonwealth never had any intention of using the GST increase to help pay for schools and hospitals, putting the federal government on a collision course with the states.
Giles’s letter confirms the states will not abandon their insistence that hospitals and schools funding has to be part of the tax reform debate.
“The revenue issues with health and education over the commonwealth’s forward estimates are an immediate concern,” he wrote. “A coordinated effort to close the fiscal gap through sensible and long overdue reforms is paramount.”
Giles said he would reconvene a CAF meeting before the next Council of Australian Governments meeting, now expected to be held in April.
In its first budget the Abbott government abandoned $80bn in projected spending for hospitals and schools. The $57bn in hospitals funding was part of the agreement forged between the former Labor government and the states to address the fact that rising hospital costs – due to an ageing population and more expensive treatments –would grow to become equivalent to some states’ entire budget over time. It also included higher increases in schools funding to cover the final years of the Gonski deal, which involved extra funding to ensure disadvantaged schools did not fall further behind.
The states had engaged in the tax debate on the understanding that at least some of the money would be used to fund this shortfall but Morrison said on Monday that had never been the case.
“The states wanted us to raise the GST so we could give them more money. We were never going to do that,” he said. “We are not about taxing and spending.”
Weatherill has said that without extra federal funding South Australian hospitals will have to close.
A poll by Essential Media found only 23% of voters supported the idea of increasing the GST, way behind the 78% who back the idea of forcing multinationals to pay a minimum tax rate or the 58% who support removing superannuation tax concessions for high-income earners.
And, despite several months in which the federal government left a GST hike “on the table” and talked up the idea of using its revenue to deliver personal income tax cuts, the level of voter support in the poll remains unchanged since last July.
When asked what they thought the point of tax reform should be – what revenue from tax changes should be used for – 58% said “address the budget deficit” and 30% said “maintain services like hospitals and schools”.
The prime minister, Malcolm Turnbull, told his party room meeting on Tuesday the government’s economic modelling showed the GST hike did not “pass the first hurdle” – economic feasibility.
The meeting came as Guardian Australia revealed the state premiers and chief ministers had cancelled a special meeting to discuss tax reform until the Turnbull government gave them some idea of what they should be talking about.
A meeting of the Council for the Australian Federation had been planned in Darwin in early March but, late on Monday, the Northern Territory’s chief minister, Adam Giles, wrote to his counterparts saying the meeting had been cancelled because the debate had become so unclear since the prime minister effectively ruled out a goods and services tax increase.
“Since I wrote to you, the national tax reform discussion has become even more uncertain,” Giles wrote. “Until such time the prime minister provides greater clarity with the commonwealth’s proposed tax reform package, any CAF discussion would only be speculative and add little to the national conversation. I therefore recommend that any further discussion around taxation reform is deferred.”
Some state premiers, including the Liberal New South Wales premier, Mike Baird, and the Labor South Australian premier, Jay Weatherill, had been discussing ways a GST increase could cover compensation for low-income earners and personal income tax cuts, and also provide additional money to the states to cover the looming “fiscal cliff” for hospitals and schools funding.
Despite the commonwealth previously praising those premiers for their constructive contributions to the tax debate, the federal treasurer, Scott Morrison, has now clarified that the commonwealth never had any intention of using the GST increase to help pay for schools and hospitals, putting the federal government on a collision course with the states.
Giles’s letter confirms the states will not abandon their insistence that hospitals and schools funding has to be part of the tax reform debate.
“The revenue issues with health and education over the commonwealth’s forward estimates are an immediate concern,” he wrote. “A coordinated effort to close the fiscal gap through sensible and long overdue reforms is paramount.”
Giles said he would reconvene a CAF meeting before the next Council of Australian Governments meeting, now expected to be held in April.
In its first budget the Abbott government abandoned $80bn in projected spending for hospitals and schools. The $57bn in hospitals funding was part of the agreement forged between the former Labor government and the states to address the fact that rising hospital costs – due to an ageing population and more expensive treatments –would grow to become equivalent to some states’ entire budget over time. It also included higher increases in schools funding to cover the final years of the Gonski deal, which involved extra funding to ensure disadvantaged schools did not fall further behind.
The states had engaged in the tax debate on the understanding that at least some of the money would be used to fund this shortfall but Morrison said on Monday that had never been the case.
“The states wanted us to raise the GST so we could give them more money. We were never going to do that,” he said. “We are not about taxing and spending.”
Weatherill has said that without extra federal funding South Australian hospitals will have to close.
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