PRIME Minister Malcolm Turnbull remains unconvinced that an increase in the GST is the way to go in the government’s tax reform package.
Mr Turnbull says an increase in the GST from 10 per cent to 15 per cent would raise just over $30 billion, which would be used to compensate people on low income and welfare while reducing personal income tax.
“So you’ve got the negative of the GST increase versus the positive of cutting personal income tax,” Mr Turnbull told ABC television on Sunday.
“I remain to be convinced or be persuaded that a tax mix switch of that kind would actually give us the economic benefit that you’d want in order to do such a big thing.”
Shadow treasurer Chris Bowen has since accused the Liberal Party is at war with itself over a possible increase to the GST.
Mr Bowen insists that such a GST increase is in the DNA of the Liberal party.
“We know that’s what Malcolm Turnbull and (Treasurer) Scott Morrison really want to do. The question is whether Malcolm Turnbull has the political courage to take on his own backbench worried about their seats,” Mr Bowen said.
Cabinet Secretary Arthur Sinodinos believes, as a popular prime minister and great communicator, Mr Turnbull has the best opportunity of any leader in a long time to make the GST change.
“That’s not to take away the difficulty of doing it,” Senator Sinodinos, who was former prime minister John Howard’s chief of staff when the GST was introduced in 2000, told Sky News.
But the prime minister and the party room have to be “excited about this”.
“They have to be able to go out there and say this is something which will fundamentally transform our country,” Senator Sinodinos said.
Senior Liberal senator Ian Macdonald, who was around when the GST was introduced, is clearly not excited by a GST change.
“I won’t be supporting it, and the main reason is that those of us who were there at the time gave a rolled-gold commitment that we would not be part of any increase beyond 10 per cent,” he told ABC television.
Greens Leader Richard Di Natale said there are many other taxes the government could be pursuing in its tax reform agenda rather than the GST.
“I’ve met with the prime minister and said to him if he is interested on working on superannuation and ending those unfair tax breaks then we are prepared to look,” he told Sky News.
He is also prepared to look at tax breaks in the property market.
Senator Sinodinos said the debate over tax reform can’t run too much longer.
“Clearly there has been a lot of discussion out there. The next stage people want to see the colour of our money, or the colour of their money, in a way we want to play with it,” he said.