Australia facing a government revenue crisis; proposal for bumping the GST up to 15% - Polidicks

[quote=Business Insidwr]Australia’s bureaucrats, like the rest of the country, are getting on, with 44% of the federal public service eligible for retirement in the next decade. That’s a nice easy way for the government to shrink the public service, but it’s a measure that is indicative of the aging workforce in Australia according to Karen Evans, managing director at NGA.NET, a top talent management company told Business Insider. An aging population means less workers to support retirees. That means that the Australian taxation system, which is more heavily reliant than its OECD peers on personal income tax, will struggle to deliver the revenue to government to provide services that Australians expect – both during their working life and in retirement.[/quote] [URL=http://www.businessinsider.com.au/australia-is-aging-and-needs-a-gst-overhaul-2015-2]Read more at Business Insider[/URL] Just to clarify, what we call our GST is better known to our European members as a VAT (neither are the same as sales tax in the United States). The current GST rate is 10% charged on most goods and services except for some things such as fresh produce or education expenses. The idea behind reforming GST is that, with baby boomers entering retirement, the Australian government is going to lose revenue from personal income tax, which makes up 40% of federal revenue at the moment. CPA Australia identified numerous scenarios of GST reform, such as broadening the GST to apply to everything and/or increasing the rate to 15%. The problem with this, aside from the obvious being that VATs are regressive taxes which, with everything else equal, make up a higher proportion of the expenditure of a poorer person compared to a wealthier person, is that the GST is (despite levied by the federal government) used to fund the state governments. The federal government receives no direct benefit from changing the rate, unless the GST system is reformed or if the federal government delegates some of its responsibilities to the state governments. Another problem I have is with CPA Australia's claim that a higher and broader GST can have a positive impact on economic growth as measured through GDP. I'm not disputing that claim, it's probably quite true, the problem I have with it is that the increase in GDP would be resultant from the government spending more from having more revenue, which would have otherwise been in the savings accounts of Australians (especially poorer Australians, given the regressive nature of VATs). It wouldn't actually be an increase in consumption in the economy, only government spending (itself factored into GDP alongside consumption, investment and net exports).

I've lost count of how many election promises the Liberals have broken now.

[QUOTE=download;47162151]I've lost count of how many election promises the Liberals have broken now.[/QUOTE] This has nothing to do with the Liberals. This was from a report commissioned by CPA Australia. And they make a lot of good points, such as our dependence on personal income tax: [img]http://edge.alluremedia.com.au/uploads/businessinsider/2015/02/CPA-KPMG-Tax-Take.jpg[/img]

[QUOTE=download;47162151]I've lost count of how many election promises the Liberals have broken now.[/QUOTE] They haven't broken any, they've just deliberately disassembled them through violent impact into a more compact state solely for the benefit of the Australian people. I mean can you really say Abbott is pushing up the GST when all he's doing is setting policy and instructing bureaucrats to put economic pressure on the states and facilitating them to independently agree to raise the GST of their own accord?

[QUOTE=download;47162151]I've lost count of how many election promises the Liberals have broken now.[/QUOTE] It makes you sound like a fool if you just repeat a generic LNP slandering phrase. But in honesty, raising GST is better than the LNP's original policies, and also better than adding a carbon tax. It's more transparent and you can see what you pay, I'd rather a percentage of the revenue from a higher GST go towards renewable power and green technology. Maybe the liberals should take this on board, it sounds much better than their current and past policies. But alas they're after public opinion and everyone would crack the shits if any new taxes are announced.

[QUOTE=download;47162151]I've lost count of how many election promises the Liberals have broken now.[/QUOTE] Heard on the radio that abbot disapproves of the raise

To the Yanks: Our Liberal government is on par with your Republicans as far as left-right politics goes. According to the [url=http://www.abc.net.au/news/factcheck/promisetracker/]ABC Promise Tracker[/url] (HA!), our current government has through the year and a half out of three years it's been in power: * 13 Broken (17%) * 6 Stalled (8%) * 44 In Progress (56%) * 15 Delivered (19%) What a joke. They flipped their shit when Labor (Democrat equiv) broke ONE promise. ONE. Our media just doesn't care enough to do fact checking any more. Anyone that does gets called out for being left-wing (ABC News) or gets called out for not treating politicians with "sufficient respect" (Sarah Ferguson who opened a television interview with our current Treasurer by saying "It's a budget with a new tax, with levies, with co-payments. Is it liberating for a politician to decide election promises don't matter?"). Ugh.

If he wants to raise the GST (And gain a tiny bit of respect from me and most of Australia) he would take a GST increase to an election like John Howard.

Funny thing is, is despite them being in power for quite sometime they still have the nerve to still blame Labor for everything and fail to even push a "fix" without it being shot down immediately bc all their current proposals are god awful

[QUOTE=fruxodaily;47163182]despite them being in power for quite sometime[/QUOTE] I hate to say it, but relatively they haven't been in power for long at all.

For the last time, the report was commissioned by CPA Australia and not the federal government. This has nothing to do with the Liberals.

yeah its been like a year and a bit and they still have the hide to blame labor

Essentially the degradation and decreasing amount of small businesses, continuing lack of tax payments from large multinational conglomerates and the failed carbon tax have left for individuals to pay tax to try and make up for those shortfalls for the federal budget. But then again, we've just signed a FTA with the PRC which could end up being fatal to the national economy. Essentially a lack of foresight, proper communication, implementation and longer-term planning by the treasurer (spanning over 4 governments, aka [B]Howard, Rudd, Gillard and Abbott[/B]) have got us to this point. We're on the verge on needing more ambiguous tax reform to ensure that taxes are paid by everyone (businesses and individuals) so that everyone can benefit from them.