Prime Minister Malcolm Turnbull is facing pressure from nervous coalition backbenchers to tone down his tax reform talk concerning the hike in GST. Rather, they wanted Turnbull to lead talks on state and federal tax cuts.
The unflinching stand of Labor leader Bill Shorten in rejecting the suggestion of former prime minister Paul Keating further fuelled the anti-GST sentiments. Keating said a modest hike in the Goods and Services Tax for healthcare sector was justified reports AAP.
But Shorten ruled out any compromise on the fight against GST hike. “Labor will stick to its guns,” he said. Turnbull has been mulling changes to the GST as a tax reform before facing the elections. So far the prime minister has not spelt out in public whether it wants to increase the rate from 10 to 15 percent.
Even on Wednesday, Turnbull told parliament that his government has “not made a decision to change any element of the tax system.”
Treasurer Scott Morrison also clarified and said “we are interested in things that will actually ultimately see taxes fall in this country, not see taxes ever higher to chase ever higher levels of spending.”
Upping the ante, Queensland Nationals MP George Christensen urged the government to end the tax talk. “I didn’t come into federal parliament to increase taxes and increase the tax burdens on Australians,” he told reporters in Canberra.
In his view, the priority of the government should be in making the tax system better to add growth and jobs. Yet another National MP, Ewen Jones said he would only support a tax system which allowed people to invest and improve business. He called for the removal of barriers like stamp duty and payroll tax to be seen moving in the right direction.
Former PM Keating said the prospect of the Turnbull government increasing the GST to 15 per cent will be a fiscal folly. He said the additional revenue of $30 billion per annum would be sucked into government spending and would keep Australia as a high taxation country.
Meanwhile, Federal Opposition Leader Bill Shorten is feeling vindicated by a new opinion poll to thwart any pressure within his party to go soft on GST, reports ABC News.
The Newspoll of more than 1,800 voters had 54 percent of respondents opposed a higher GST. The most prominent Labour leader with a pro-GST stand is South Australian Labor Premier Jay Weatherill. He is prepared to accept a hike in GST if it can support the funding on health and education sectors in states.