Raising and extending the GST: Another brilliant Coalition plan for families

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The Abbott Government: the best friend struggling families never had

In another move sure to thrill Coalition candidates in marginal Queensland and NSW seats, moves are afoot within the Abbott Government to raise the GST and extend it to fresh food. Peter Wicks from Wixxyleaks comments.

With rapidly approaching elections in NSW and Queensland, there is something worth considering that has not been talked about for quite a while.

It is interesting that months after the Budget we are once again hearing mumblings from Coalition backbenchers and think tanks about changes to the GST, yet nothing about the need for the states to demand these changes.

As an aside, I find it a source of constant amusement that “think tanks” can only ever think of raising taxes or introducing new ones. I never hear them talk about expanding markets, investing for the future, or diversifying services — it’s all tax, tax, and more tax... The thinking level in these tanks is clearly below empty.

So, let's cast our minds back to May last year, just before the Abbott/Hockey great unfair budget of 2014 was first announced.

Last year, in May, there were large scale cuts from the Abbott Government to things a coalition government sees as a burden rather than a service — little things like the universal health system and public education. With the announcement of these huge Federal cuts to hospitals and scools, the problem of picking up this funding shortfall was to be left to the State Governments.

Joe Hockey at the time stated:

"We went to the last election promising that we would not change the GST. We are honouring that commitment.”

However, it was clear to everyone with firing synapses that Abbott and Hockey were pressuring the States to take the heat and demand changes to the GST.

Two of the states Abbott was relying upon to whistle his tune and demand GST changes are now headed for an election, and already the tune is in the air.

Last Wednesday (7/1/14), Julie Bishop weighed in on the debate, saying:

"We should have a constructive, mature debate about our taxation system and that would include the GST."

So clearly, even if GST changes are not on the drawing board, they are certainly part of the discussion.

Recently, there has been discussion within the Coalition about applying the GST to fresh food.

Fresh food is already expensive and, as we know, take-away is often cheaper. Increasing the price of fresh food would only serve to benefit the fast food industry that Liberal Senator Fiona Nash has seemed so desperate to prop up in the past. It will certainly not benefit the states, as the associated rates of health issues would increase with the increased fast food consumption.

The think tank claims that applying GST to fresh food would raise $6 billion for the Federal budget.

That is one way of putting it, I guess, however I prefer these other ways:

  • applying GST to fresh food would cost taxpayers $6 billion;
  • applying GST to fresh food would raise the cost of living by $6 billion; and
  • applying GST to fresh food would hurt families somewhere around $6 billion.

Let’s not also forget that applying GST to fresh food would hurt farmers as their produce sales plummet and their margins further squeezed by the big supermarket chains so their profits don't suffer.

Farmers, eh? I thought they had a political party that looked after their interests? Oh, that’s right, the Nationals…

The Nationals are the ones that help out farmers by denying climate change, backing the coal seam gas miners taking their farmland and poisoning their water supply, and now by hoping to increase the cost of living and decrease their profit margins by adding GST to the spoils of their labour. I thought the farmers were already doing it tough, and in some parts of the nation dealing with drought. With friends like the National Party looking after them, they sure don’t need enemies…

Nevertheless for some, like the Coalition's Dan Tehan, raising our cost of living by $6 billion isn’t anywhere near enough.

As Fairfax are reporting, Dan the man Tehan wants to slug the taxpayer for another $21.6 billion by also applying the GST to other luxuries, such as education and health.

So, as you can see, the Abbott Government that promised there would be no changes to the GST is very happy to continue discussions about changing the GST — in fact they are welcoming such discussions.

With a Federal Government happy to entertain such a drastic rise in the cost of living, it is little wonder Tony Abbott is poisonous to Coalition state government election campaigns, with state premiers suddenly having allergic reactions to his presence.

However, if the Coalition are to win the upcoming state elections with a full term ahead of them, the Coalition premiers may follow Party lines heeding Abbott and Hockey’s call and start asking for changes to the GST. Thus giving Abbott an excuse to break yet another promise.

Bear this in mind, when Joe Hockey announced the education and health cuts and started the debate over GST revenue, this was what Campbell Newman said when he was supposed to be at his most angry:

“…we need proper secure revenue streams so that our populations, states and territories, can actually get the services they deserve."

Would this include changes to the GST, Mr Newman?

However there is one way that we can be sure that the State governments don’t sing Tony Abbott’s tune and ask for a GST review.

Vote for change of governments in January and March.

Peter Wicks is a Labor Party member and a former NSW ALP state candidate. You can follow Peter Wicks on Twitter @madwixxy.

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