All the talk about the “need” to increase the GST with “appropriate” compensation has me worried. When the Howard government introduced the GST in 1998, the way was eased for him by Australian Council of Social Services coming out in support of a GST. ACOSS position emboldened the Democrats to vote for the GST.
ACOSS never looked at the fact that the lack of tax revenue in Australia is because both Coalition and Labor governments have kept cutting the corporate tax rate since the early 1980s as well as the fact that neither major party has taken serious action to stop corporate tax rorting.
When I was writing about the GST for Green Left Weekly in 1998, I discovered that the exact amount that the Howard government projected to raise from the GST would be equivalent to the amount of revenue forgone by cutting the corporate tax rate. Cleverly, Howard made sure that the corporate tax rate would be separate legislation only presented after the GST was passed. Because the ALP, the Democrats and the Greens didn’t oppose the cut to the corporate tax rate at the time, there was no public discussion about the fact that the GST paid for a corporate tax cut. The ALP, the Democrats and the Greens opposed Howard’s cut to capital gains tax, but not the cut to the corporate tax rate.
The GST means that we all paid for the corporate rich to pay less tax, and people who previously paid no tax – the homeless – are now paying tax because they pay the GST.
ACOSS should come out in favour of increasing the corporate tax rate and call for the repeal of the GST. The GST is an unfair regressive tax, no matter how much compensation you get.