Economist Proposes GST Hike to Tackle Australia’s Tax System Issues
Australian economist Richard Holden has sparked controversy with a bold plan to increase the Goods and Services Tax (GST) from 10% to 15%.
The proposal, developed in collaboration with federal Teal MP Kate Chaney, aims to reform the country’s tax system, which Holden believes is long overdue for a rethink.
Background
The GST, introduced in 1999, has remained unchanged for over a quarter of a century.
Holden’s plan comes days before Labor’s Economic Reform Roundtable, where the government is expected to discuss ways to address the country’s economic challenges.
Proposal Details
If implemented, the GST hike would not only increase the tax rate but also expand its scope to include fresh food, education, health, childcare, water, and sewage.
To mitigate the impact on low-income earners, the plan proposes a $3,300 annual rebate to all taxpayers, effectively offsetting the tax increase on the first $22,000 of their spending.
Government Response
Prime Minister Anthony Albanese has all but ruled out the proposal, indicating that the government is not considering a GST hike at this time.
Despite this, Holden remains committed to his plan, arguing that Australia’s tax system is “broken” and in need of significant reform.
The economist’s proposal has sparked a heated debate about the country’s tax system and its ability to address the growing cost of living pressures facing Australians.