The Grattan Institute has called for GST to be raised from 10% to 15% to help ease Australia’s debt. An RMIT expert unpacks this proposal, which could generate up to $76 billion a year and unlock income tax savings, according to the think tank’s research.
Dr Venkat Narayanan, Accounting, Information Systems and Supply Chain:
“The rate of GST in Australia has been at 10% on taxable supplies since its inception in 2000.
“It’s time to have a serious discussion about whether the GST can deliver more to the federal coffers and if so, how can this be done without disadvantaging vulnerable groups.
“The debate around increasing the GST for some reason doesn’t feature discussion around increasing it slowly and over time. Why not increase the GST to 10.5% and get to 15% over a number of years.
“Any increase in GST must also be accompanied with income tax relief, especially for individuals and families on low incomes.
“GST remains the most effective way to tax high income earners (when compared to income taxes) and hence is a highly effective tax, assuming that relief is provided to low income earners.
“Australia’s GST needs to change. Now is the time to make it happen.”
Dr Venkat Narayanan is a senior lecturer in accounting at RMIT University. He is an expert in taxation and related policies and has undertaken research commissioned by the ATO.
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