Push to lift GST to 15% across Australia faces strong opposition

Calls are increasing to raise Australia’s GST from 10% to 15% to address rising national debt.Supporters contend it could generate $76 billion annually to fund tax cuts and welfare boosts.

Critics warn it might worsen cost of living issues for low-income households. And even worse: governments may have to lift it again once their spending reaches the new limit.

Small business communities express concern about a potential isolated tax hike amid economic pressures.

GST concerns

The Grattan Institute’s report advocates for this GST increase alongside eliminating food tax exemptions.

They argue it would provide essential financial support to state governments facing budget shortfalls.

Deputy director Erin-Lea Brown highlighted these changes as crucial for economic stability.

Modelling shows some households may benefit financially, while others could face higher tax burdens.

For example, low-income families could save on taxes, while high earners may incur significant costs.

Brown emphasized that neglecting budget reforms would exacerbate national debt.

Former Treasurer Josh Frydenberg supports a GST increase as part of broader tax reform.

He suggests this could relieve reliance on personal income tax, promoting economic growth.

State governments, especially in Western Australia, are keen to discuss GST distribution equity.

Small business representatives, like Skye Cappuccio of COSBOA, caution against a tax increase in the current economic climate.

The debate continues as the federal government maintains that increasing GST is not currently under consideration.