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Don’t rule out GST changes: business

A 2015 protest outside Parliament House in WA as part of a nationwide campaign demanding the GST on tampons and pads be scrapped. AAP Image/NewZulu/Alex Bainbridge

A 2015 protest outside Parliament House in WA as part of a nationwide campaign demanding the GST on tampons and pads be scrapped. AAP Image/NewZulu/Alex Bainbridge

Canberra [AAP]

Business is warning that without increasing the GST there won’t be any hope of delivering personal income and corporate tax cuts.

Business Council Of Australia chief executive Jennifer Westacott’s concern comes after Prime Minister Malcolm Turnbull said he’s not convinced of the benefits of a rise in the consumption tax.

‘If the GST is not part of a total tax package, the nation’s degrees of freedom to make a real impact on tax relief will be very limited,’ Ms Westacott writes in Monday’s Financial Review.

But she says neither side of politics should have allowed the debate on tax reform to be dominated by the GST.

And she warns the ‘escalating scare campaign is a ticking time bomb’ that risks blowing up what the debate is really about.

‘I am concerned that tax reform runs the risk of being the latest victim of Australia’s dysfunctional political debate, and every single Australian will be the loser as living standards decline,’ she writes.

She praises NSW and South Australian premiers Mike Baird and Jay Weatherill, as well as the prime minister and Treasurer Scott Morrison, for engaging in a sensible discussion.

‘But we also have politicians who see the tax discussion as just another opportunity to score cheap political points.’

Labor is unconvinced that a plan to raise the GST from 10 to 15 per cent has been dumped, even though Mr Turnbull has questioned whether it would deliver the lift to the economy the government is seeking from tax reform.

Liberal senator Zed Seselja says he has no doubt the Turnbull government could win a GST election, but it is about whether changing the tax is the right reform.

‘I want to see lower taxes rather than higher taxes and whilst the GST is an efficient tax, if an increase in it leads to overall higher taxes then I don’t think it’s a path we should be pursuing,’ he told ABC radio on Monday.

Nationals MP David Gillespie warned against any retrospective changes to superannuation tax concessions instead. Dr Gillespie, who asked the Parliamentary Budget Office to model the impact of a broadened 15 per cent GST, said superannuation funds were not a ‘little piggy bank’ to go raiding.

‘If they want to change things prospectively, going forward, in a sensible measured way, of course I’ll look at it, but you can’t do anything retrospectively,’ he said.


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