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GST could be changed, government white paper says

Federal Treasurer Joe Hockey
Federal Treasurer Joe Hockey

THE GST rate could be changed - but only if there is "broad political consensus for change", a Federal Government white paper has declared.

The tax discussion paper, which treasurer Joe Hockey will release today, does not rule out change to the GST rate - but states all state and territory governments need to agree.

The white paper called for increased simplicity and transparency in the taxation system stating even GST exemptions make the tax more complicated.

"By taxing most goods and services in the same way and at the same rate, the GST reduces the complexity and distortions that arise when things are taxed differently," the paper read.

"However, exemptions to the GST detract from this. Exemptions significantly increase the complexity of the GST and introduce distortions by changing the relative prices of goods and services."

Taxing savings was also nominated as a "relatively efficient" revenue raiser.

"The effect of tax on domestic savings is unlikely to significantly affect the aggregate level of investment in Australia (which is determined largely by the decisions of foreign investors)."

Speaking to journalists in Sydney acting leader of the opposition Tanya Plibersek said any new taxes from the Liberal government would constitute a broken election promise.

"This is all from a Government that said before the last election there'd be no new taxes," she said when asked about a bank tax.

"We're now at the fifth and possibly the sixth suggestion for new taxes or tax increases."

The banking industry has warned any taxes on deposits onto customers.

Australian Industry Group chief Innes Willox said the government should reduce business tax in upcoming Federal budget.

"While a rate of 28.5% would still see our companies taxed at a rate higher than is generally the case for medium or small OECD economies, it would nevertheless be a major improvement on the manifestly uncompetitive existing rate of 30%," he said.

- APN NEWSDESK

Topics:  editors picks gst joe hockey



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