Greiner says GST freeze juvenile

AAP, with a staff reporter

Former New South Wales premier Nick Greiner says the perilous public finance conditions facing state governments demand a review of the GST, and freezing the tax "forever and a day is juvenile". 

Mr Greiner, the co-author of a government review of the distribution of GST revenue, said the first step should be a "fair dinkum" debate.

Changing the GST rate of 10 per cent and extending its base was dependent on the agreement of all the states and territories, who were the beneficiaries of the tax, he said.  

"But we are in a very, very difficult unprecedented public finance situation in Australia, as is the world," Mr Greiner told ABC radio.

"To simply say, well it's too hard, let's not do it, doesn't seem to me the right thing to do."

Opposition Leader Tony Abbott said the GST would not be off the agenda of a planned tax review if the coalition won the federal election in September. 

But any changes to the consumption tax would require an electoral mandate, he has vowed.

Mr Greiner said the GST rate in Australia was lower than three-quarters of comparable countries and was the only one frozen.

Most countries had changed their rate, either up or down, in the past decade.

"I don't think there's any doubt that all the states are in really quite perilous public finance conditions," Mr Greiner said.

"This isn't a Liberal or Labor thing."

ACT Chief Minister Katie Gallagher was also backing calls for a review.

The Labor leader says the GST is a tried, tested and efficient tax which should be considered in any review of taxation.

"The commonwealth has the capacity to raise revenue through efficient taxes," she told the Canberra Times.

"The GST is one of them and as things like health continue to grow, they're going to have to look at how they generate their own revenue for distribution back to the states and territories."

The ACT is especially reliant on GST revenue as it lacks an income stream from industries such as mining.

Revenue forecasts from last week's federal budget point to a $49 million reduction in GST payments to the ACT over the next four years.

The former Rudd government excluded consideration of the GST as part of the Henry tax review in 2010.

Prime Minister Julia Gillard said federal Labor was not planning any further tax reform.

More from Business Spectator


Please login or register to post comments

Comments Policy »
Agreed. If it is necessary. Broaden the base. Do it! I suggest GST on everything. Up it to 12.0% if necessary.
It was pretty astounding that the Henry Review was not permitted to examine the GST in its "root and branch" review of the taxation system a few years ago. How extraordinary that our leaders should be so closed to simply studying an (obviously relevant) topic. Surely Abbot's position of including GST in his planned review, but guaranteeing no changes without a mandate, is a perfectly sensible and transparent approach? I fail to understand how any reasonable person could find fault with that!
If Abbott is talking about a taxation system review, how can the GST NOT be included, it is, after all, a tax! :o)