OPINION: Bumping up the GST will take Australia nowhere
TALK now rampant about the possibility of a GST increase to 15% is premature and manipulative.
As with any decision of government, a move to effectively increase by 5% the price of goods and services must be justified by both an explanation of need and a full understanding of all alternatives.
Problems with Australia's taxation system won't be fixed by simply placing a brake on spending, because that is exactly what an increase in this great big tax on everything will do.
Despite Malcolm Turnbull's assurances, it will require more than promises that the most disadvantaged won't be left worse off to sell either an increase in the GST or a widening of its base. Australia's taxation system is a complicated hotchpotch of measures that needs to be simplified and better targeted to ensure everyone pays their fair share. That is simply not the case at present. If you are a PAYG employee for example there are none of the loopholes available to small business, farmers, miners, etc to write off any manner of expenses.
Why someone in the Taxation Department doesn't simply put together the regularly published lists of highest-income-earning suburbs with the cost of housing in those postcodes and just for a moment wonder why one and one don't make two; has always been beyond me.
In the first week of October the new Prime Minister and his freshly minted Treasurer called a summit involving business, unions and welfare sectors.
"We're not going to conclude this meeting today and come out and say 'right we've decided to do X, Y and Z'," Mr Turnbull said.
Afterwards there were photo opportunities and earnest discussion on various late news programs. Negative gearing and an end to generous superannuation tax concessions seemed at point very much on the table.
Miraculously both have disappeared from discussion. Negative gearing is a destructive tax concession that skews investment to an unproductive sector kept primed only by this country's obscene levels of immigration-driven population growth.
We brutally incarcerate the desperate escaping war and tyranny but welcome with open arms anyone with enough money in their pockets to buy a house.
Import people. Sell houses. The formula that underpins the modern Australian economy. As for the clogged cities, urban sprawl, gridlocked highways, overcrowded class rooms, crippling health costs and inadequate public transport which are the real cost of this mindless Ponzi scheme?
Apparently all you need to do is build infrastructure. Mind you, you can't charge the profit takers for it because - after you take into account their 20% margins - that would make housing unaffordable.
So instead it is to come out of either public debt, new taxes or increases to existing ones. And of course we will all benefit because the "investment" in infrastructure will create jobs and stimulate the economy.
That's the theory. The reality is the cosy relationship between big unions and big business will escalate the cost of all this activity by up to 30% as is already the case according to David Chandler who conducted the Federal Government's Building the Education Revolution Review.
Meanwhile lower down the food chain others will fight for the scraps, zero-margin tendering to win contracts and then screwing suppliers and trade sub-contractors with unconscionable payment terms and confected defect liability claims.
But of course no-one is meant to notice any of that. Look over there in the leaky boat - it's the greatest threat to our national security. Lock them up, throw away the key.
How'd you go in the Cup?