Tax talks with states nothing new, says Morrison
UPDATED: Federal Treasurer Scott Morrison is trying to head off a scare campaign around the GST by playing down ideas to alter the consumption tax as old news.
Papers are being prepared for a Council of Australian Governments meeting examine options to raise the rate or broaden the base of the GST.
But Morrison notes the states had earlier in 2015 asked the commonwealth to model a series of proposals, including raising the 10 per cent GST rate to 15 per cent, a proposal raised by South Australian Premier Jay Weatherill last month, broadening its base and increasing the Medicare levy.
“The commonwealth is having a discussion with the states and territories about how we make our tax system better, that’s what’s happening,” he told reporters in Melbourne on Wednesday.
Proposals to unify state and territory payroll taxes and an overhaul of property levies are also likely to be on the table at a meeting of national treasurers on Thursday, ahead of formal COAG talks on Friday in Sydney.
Morrison made clear his aim, saying the choice was between changing the tax system to grow the economy or raising taxes to pay for higher levels of expenditure.
“The commonwealth is not interested in the second discussion,” he added.
Labor says it’s obvious the government intends to raise the GST.
“If the Turnbull government doesn’t want to go ahead with this, they shouldn’t be preparing options papers,” shadow assistant treasurer Andrew Leigh told ABC radio.
“This from a party who ran a scare campaign on a carbon price, seems pretty rich to me.”
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Federal Government tax options for the states and territories:
- Lifting the rate from 10 per cent to 15 per cent, raising $32.5 billion annually
- Lifting the GST to 12.5 per cent and expanding the base to include all food and non-alcoholic drinks, raising $25 billion
- Raising the Medicare levy from 2 per cent to 4 per cent in one hit, raising $15 billion
- Raising the GST to 15 per cent, expanding it to include food and non-alcoholic drinks, water and sewerage, raising $45 billion
- Expanding the 10 per cent GST base to include health services and education services, raising $4 billion
- A GST-equivalent financial sector tax, raising $4 billion
- Raising the Medicare levy to 4 per cent over eight years.
AAP
