Article: Lift GST rate to ease our cash drain - O'Farrell

[somebody]

Lift GST rate to ease our cash drain - O'Farrell

Date
    September 17, 2012

Sean Nicholls
Sydney Morning Herald State Political Editor

THE NSW Treasurer, Mike Baird, has joined the Premier, Barry O'Farrell, in calling for a debate about whether the rate of the GST should be increased in light of plummeting revenue to the states.

After a week in which Mr O'Farrell was criticised for cuts in education and health, which he said were needed because of falling GST revenue, yesterday he said ''everything should be on the table'' when examining alternative revenue sources.

''It's a lack of confidence at the national economic level that's caused the reduction in GST receipts, that's caused the flow-on consequences for the states,'' he said. ''I think we should have a discussion about whether getting rid of other state taxes can be exchanged for adjusting the GST in a way that seeks to address current problems that states are facing in revenue.''

The Prime Minister, Julia Gillard, ruled out increasing the GST, while the federal Treasurer, Wayne Swan, went on the attack.
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''Mr O'Farrell's plan to increase the rate and scope of the GST is a blatant tax grab that would hurt millions of families across the country, including in NSW,'' Mr Swan said.

''While Mr O'Farrell's in the process of sacking thousands of workers, he also wants to hit them while they're down by jacking up the GST. No wonder Australians are getting very worried about what an Abbott-Liberal government would mean for their job security and household budgets.''

The Opposition Leader, Tony Abbott, said the Coalition had ''no plans to change the GST, none whatsoever''.

Mr Baird and the South Australian Treasurer, Jack Snelling, are preparing a plan for Mr Swan on how to abolish inefficient state taxes, such as stamp duty on housing. Mr Swan has ruled out increasing the rate of the GST, or broadening its base.

Mr Baird has called for consideration of whether the GST-free threshold for online purchases from overseas websites should be cut from $1000 to about $30, which would potentially raise hundreds of millions of dollars in extra GST revenue. This could pave the way for an abolition of stamp duty, or be used for infrastructure and services.

The idea was backed by most states but given a lukewarm reception by the federal government and opposition.

Yesterday Mr Baird said increasing the GST should be discussed at a meeting of state treasurers next month, before the report is given to Mr Swan in December. ''While our first consideration will be looking at the online GST threshold, the Premier has rightly articulated the financial challenges facing the states due to the huge collapse in revenue,'' he said.

''We should be looking at all alternative options and everything should be on the table.''

The NSW Opposition Leader, John Robertson, said Mr O'Farrell had campaigned on lowering the cost of living ''but now he is advocating for raising the GST, which will put pressure on every household budget in NSW''.

The NSW government has announced it will cut $1.7 billion from education and $775 million from health over the next four years.

Read more: http://www.smh.com.au/nsw/lift-gst-rate-to-ease-our-cash-drain--ofarrell-20120916-260j1.html#ixzz26hAPKKOZ

Interesting.  Hard for Campbell Newman to argue against this one.   I wonder what the other 3 states think.

[Jonno]

Amazing that we blindly keep increasing taxes and charges plus cutting services without never once asking are we getting the best value or outcome from the expenditure.  Throwing good money after bad it is!!

[johnnigh]

The state premiers are all trying to shift costs back onto the Feds and cry out for the Feds to increase the tax that goes straight to the states, ie, GST. Like actual state taxes it is regressive, hitting the poor much more than the rich, who spend much less of their income on stuff subject to the GST.

But the Feds won't look to increase any tax, unfortunately, because we really need more tax: we're a country that fits JK Galbraith's picture of private wealth and public poverty. That's why we have 4WDs worth the best part of $100,000 congested on potholed roads, as they drive children to private schools past under-resourced public schools.

The resource rent tax blown out of the game by KRudd's incompetence management of its unveiling would have been a great start to generating a reasonable return to Australia from the exploitation of Australia's resources. Income and wealth taxes have needed reform for 40 or so years, but no government will grab that bouquet of political nettles.

[somebody]

Not sure how regressive it is?  About the only thing not subject to it is food and land.

[Gazza]

^The point is though, for lower income earners, to meet all your basic expenses constitutes a large portion of your income. Not much left over after making ends meet.

For higher income earners, this is not the case.

Both people are paying GST on a lot of these basic expenses.

A poor person pays just as much tax on a tube of toothpaste as a rich person does.

[SurfRail]

Not sure how regressive it is?  About the only thing not subject to it is food and land.

Second hand residential land only.

[somebody]

That would only help the feds, not the states.  I agree with you though.

One of the best plans was KRudd's - have the Feds take over health.  He just didn't want to implement it after being elected to do so.

[Jonno]

We don't have a fundi g problem we have a spending problem!!

[#Metro]

^The point is though, for lower income earners, to meet all your basic expenses constitutes a large portion of your income. Not much left over after making ends meet.

For higher income earners, this is not the case.

Both people are paying GST on a lot of these basic expenses.

A poor person pays just as much tax on a tube of toothpaste as a rich person does.

This is true, but it is also true that this is only HALF the story. A 'poor' person could have that money returned via the welfare system (which is why taxation and welfare are together called the 'tax and transfer system') through increases in welfare payments, tax concession and tax returns and tax threshold increases .

[#Metro]

We don't have a fundi g problem we have a spending problem!!

We do have a spending problem! Paying $465 million for 1km of busway is INSANE. Even more scary is that money is so much that, if it were poured into services, would pretty much fix 90% of the transport problems in Brisbane!

There are projects like this popping up everywhere all the time as well.

[Jonno]

That is wasteful but nothing compared to the billions on freeways, health, policing and community services simply because we have built car oriented cities!

[somebody]

Paying $465 million for 1km of busway is INSANE.

And then not using it for the obvious services: 200 & 204.

[Jonno]

That is wasteful but nothing compared to the billions on freeways, health, policing and community services simply because we have built car oriented cities!

True, but we are talking about 150+ years of development based on cheap land and later cheap personal transport. So you cannot blame history too much. However things can change and should but this does not mean forcing us into high density lifestyles.

Why The old "anything different to today is 'forcing' us to live in High Density" argument. 

1. Many people would like higher density living but due to restricted areas zoned ii is too expensive.
2. Increasing housing choice in existing suburbs will not dramatically increase density. 
3. Increasing mixed use Commercial Centres will do little to increase overall densities
4. Providing bus and bike lanes will not increase density.
5. .....

[somebody]

1600ft^2 is a very large 2 bed unit, even counting the study as a 3rd bed still makes a good size 3 bedder.  =148m^2

[Gazza]

And then not using it for the obvious services: 200 & 204.

Quick question, in the bus review, did anyone submit that these should use the Busway?
I forgot to submit this.

after all this is what made Australia so great.

I thought our natural resources are what made Australia great.

maybe go live there with young kids, coped up inside a space less than 2000srft for weeks on end and see how you go.

Non argument because most of the population don't have young kids.

But please don't attack people who choose to live in a 3-5bed house in suburbia with two cars out the front, after all this is what made Australia so great.

Cool, but if they want to they should pay the full cost of infrastructrue that it costs to service lower density, and they should stop expecting toll free roads to drive their two cars on.

[somebody]

And then not using it for the obvious services: 200 & 204.

Quick question, in the bus review, did anyone submit that these should use the Busway?
I forgot to submit this.

I submitted this to the minister.

[Jonno]

I am not proposing nor ever have proposed 40 storey other than in a CBD or Major Centre with adjacent commercial towers.

There are plenty of examples of great places, urban environments consisting of 4-5 storey developments.   There is also a place for larger blocks and houses but our city is mostly large blocks and these do not cater for a significant % of population. Our suburbs are not walkable with single use car oriented commercial centres.

Suggesting we need to cater for the actual needs of our population is not attacking those who want a large block it is just being smart. However, I will not accept those who want a large block demanding that a freeway be bulldozed through suburbs and my taxes wasted so they can drive to everything plus demand free car parking at all locations.

PS I have lived in many cities through various stages of my life... and learnt that a city needs have as wide a variety of housing in the appropriate locations with appropriate services.  The cities that achieved this funnily enough are rank highly and are tourist attractions in their own right.