Thursday, 5 November 2015

Filled Under: , , , , , ,

ACOSS: Proposals for a higher GST and any unequal outcome.

ACOSS MEDIA RELEASE
Using a higher GST to pay for income tax cuts is a ‘recipe for more inequality': new report

Thursday 5, November 2015

The Australian Council of Social Service today released new modelling from the National Centre for Social and Economic Modelling (NATSEM) to show what an increase in the GST to 15% would mean for households across the community. The NATSEM modelling also shows what  it would mean if the Federal Government used the revenue from an increase in the GST to fund a reduction in personal income taxes across different income groups.

The NATSEM modelling, commissioned by ACOSS with support from the Carnegie Foundation, confirms that using an increase in the GST to fund income tax cuts will mean households on low and modest incomes are significantly worse off and higher income households are the winners, paying less tax overall as a proportion of their income.

DOWNLOAD Report

A higher GST?

“The NATSEM modelling of an increase to 15% on the existing base of the GST or a broadening of the GST base to fresh food, health and education confirms that either change would be regressive. Low and modest income households would clearly pay a higher proportion of their income, in comparison to higher income households through an increase in the GST, whether by increasing the rate or broadening the base by removing the exemptions,” said ACOSS CEO, Dr Cassandra Goldie.

Ben Phillips of NATSEM said, “An increase in the GST has a much bigger impact on low and modest income households because they spend more of their overall income to meet their living costs, in comparison to people on higher incomes who are better able to save. An increase in the rate of the GST to 15% would require people in the lowest 20% of the income brackets to pay 7% more, people in the middle 20% 4.2% more, and people in the highest 20% income bracket just 3% more of their income.”

Mr Phillips said, “A broadening of the base of the GST to fresh food, health, water and education would also be regressive, with people on lower incomes paying proportionately more of their incomes on these essentials. The relative impacts are clear: 4.6% of income for people in the lowest income brackets, 2.7% for people in the middle, and just 1.7% for the highest income earners.

A higher GST to fund income tax cuts?

“NATSEM has also modelled the impact of raising the GST to 15% to pay for a cut of 5% in all personal income tax rates to demonstrate how this would change who pays what proportion of tax, in reference to their incomes. The results are stark: two thirds of households, on incomes up to about $100 000 would be worse off and the top 40% would gain at the expense of the bottom 60%. The lowest 20% of households by income would lose $33 a week (6.6% of income) on average while the top 20% would gain an average of $69 a week (2.1% of income),” Mr Phillips said.

Dr Goldie said, “Increasing the GST to fund income tax cuts is a also a big, complicated revenue ‘churn’ that would do nothing to ease the pressure on State health, education and welfare budgets, particularly as it would clearly require a major compensation package to ameliorate its impacts on people who are hit the hardest.  If it’s not about raising more revenue, the Government has to justify why this option is being considered at all.”

“Raising the GST to fund cuts to personal income tax across the board, as some advocate, is a recipe for more inequality, not a stronger economy,” said ACOSS CEO Dr Cassandra Goldie.

A better approach to tax reform? 

“ACOSS is a strong supporter of comprehensive tax reform to improve economic efficiency to support jobs growth, to increase simplicity and fairness, and to secure a more sustainable revenue base for essential services and infrastructure.  We agree with business and the unions that tax reform should remove tax concessions that are no longer fit for purpose, shift away from clearly inefficient tax bases such as stamp duties towards efficient bases such as land taxes, and remove distortions in the tax treatment of investment incomes. This was clear common ground from the National Reform Summit Group, and consensus between the Business Council of Australia and ACOSS.

“We welcome the Federal Government’s preparedness to put changes to superannuation tax concessions, negative gearing and capital gains and other tax concessions and loopholes, such a discretionary trusts and other tax shelters, back on the table.

“However, if the Federal Government’s main game for tax reform is to shift the responsibility for paying taxes away from personal incomes towards consumption, it would fail on all grounds.  Fairness and simplicity would be undermined and it would do little or nothing to improve economic efficiency. It would be a recipe for driving inequality. The Government’s own Tax Reform Discussion Paper highlighted that the most inefficient taxes are stamp duties and other business and transaction taxes, not personal income tax. This is where the serious effort to shift taxes should be focussed.

“ACOSS does not rule out any increase in the GST. However, an increase in the GST should not be our starting point, when low and modest incomes earners carry the greatest risk.

“There is no doubt that governments will need more revenue to continue to provide the health, education and welfare services the community expects. ACOSS supports efforts to reform the tax system to do this in the fairest and most efficient way. This research confirms our view that increasing the GST should be one of the last options considered to raise revenue for those services, when low and modest incomes earners will carry the greatest risk.

“ACOSS will continue to work with government, business, unions and the community to help make this happen. We cannot afford not to reform the tax system, but tax reform is not all about raising the GST,” Dr Goldie concluded.

Media Contact:
For interviews with Dr Goldie, CEO ACOSS or Ben Phillips, NATSEM, contact Fernando de Freitas (ACOSS) - 0419 626 155.

DOWNLOAD Report

Key Findings:
Increasing the GST:
  • Raising the GST to 15% without removing exemptions would raise $29 billion in 2016, increase the CPI by 2.8%, and reduce the spending power of the lowest 20% by 7%, the middle 20% by 4.2%, and the top 20% by 3%.
  • Removing the exemption for fresh food and leaving the GST rate at 10% would raise $7 billion, increase the CPI by 0.7%, and reduce the spending power of the lowest 20% by 2%, the middle 20% by 1%, and the top 20% by 0.6%.
  • Removing the exemption for health and community services and leaving the GST rate at 10% would raise $6 billion, increase the CPI by 0.6%, and reduce the spending power of the lowest 20% by 1.6%, the middle 20% by 0.8%, and the top 20% by 0.6%.
  • Removing the exemption for education and leaving the GST rate at 10% would raise $5 billion, increase the CPI by 0.4%, and reduce the spending power of all household income groups by a uniform 0.6%.
  • Removing the exemption for water and sewerage and leaving the GST rate at 10% would raise $1 billion, increase the CPI by 0.1%, and reduce the spending power of the lowest 20% by 0.4%, the middle 20% by 0.2%, and have a negligible impact on the top 20%.
Increasing the GST to pay for income tax cuts:
  • Increasing the GST to 15% without removing exemptions and using all of the revenue to pay for a 5% cut in all marginal personal income tax rates would result in losses for most of the lowest 60% of households up to around $100,000 in household income to pay for gains for most of the highest 40%:
    * 99% of the lowest 20% would lose an average of 6.7% of spending power, as any tax cuts would be offset by higher prices;
    * 91% of the second 20% would lose an average of 3.3%
    * 67% of the middle 20% would lose an average of 2.4%
    * 64% of the fourth 20% would gain an average of 1.8%
    * 75% of the top 20% would gain an average of 3.2%

 
sex dictionary sex diseases sex education film sex facts for teenagers sex health tips sex medicine for male sex good for health sex positions during pregnancy sex power medicine sex relationships sex related words Vibrators and Adult Toys sex pills for women sex relationships online dating business online dating catfish online dating elite online dating guide Adult Superstore sexuality counseling sex facts and tips sexuality confusion sex power medicine sex relationships sex related words Vibrators and Adult Toys sex pills for women sex relationships Free Online Casino Free Online Slots Games Online Casino Games the best online casino games Winning Strategy Games Best Gaming Experience Play Online Casino Games Online Casino gambling best casino gambling Slots gambling Online Casino Reviews The Best Online Casino Play Online Casino Games Play Online Casino Play Online Pokies Real Money Slots Online Slots and Casino Play Online Slots Real Money Casinos Play Slot Machines Online Real Casino Jackpot Party Casino Slots Real Casino Slots Apps sex dictionary sex diseases sex education film sex facts for teenagers sex health tips sex medicine for male sex good for health sex positions during pregnancy sex power medicine sex relationships sex related words Vibrators and Adult Toys sex pills for women sex relationships online dating business online dating catfish online dating elite online dating guide Adult Superstore sexuality counseling sex facts and tips sexuality confusion online dating tips online dating scams online dating service sex good for health sex positions during pregnancy sex power medicine Find a Home Inspector Online Home Inspector Home Inspection Tips Patio Furniture Home and Patio Decor Center Home Patio Better Home Products home product business Home Remedies Kitchen Appliances Online Home Security Systems The Best Smart Home Security Systems Wireless Home Security Systems Home Design Ideas Home Decorating Ideas interior design ideas bedroom Bedroom Designs Small Bedroom Designs The Best Carpet Cleaner Carpet Cleaning Machines Best Home Builders Home Building Online Courses Home Builder Marketing Glass Shower Screens House of Flooring Top Living Room Flooring Better Homes and Gardens Best Logistics Software Best Application Comparison Shipping Software Solutions Logistics Management Software Logistics Software Systems Software Developers Systems Software Developers Software Engineer Software Developer Education Android Software Applications Most Popular Software Applications Cell Phone Monitoring Software Software Technology Technology Applications Phone System Software Information Technology Spy Phone Technology download Smartphone Spy Phone Technology Logistics Software Systems Software Developers Systems Software Developers Software Engineer Software Developer Education Android Software Applications Most Popular Software Applications Cell Phone Monitoring Software Software Technology Technology Applications Best Application Comparison Shipping Software Solutions Hotel and Travel Vacations and Travel Deals Cheap Hotels Travel Tips Travel Guides Travel Information Cheap Flight and Hotel Packages‎ Trip Travel Insurance Compare Cheap Holiday Travel Insurance Find Cheap Hotel Discounts Cheap Hotels and Flights Best Restaurants Chinese restaurants Vegetarian Restaurants Hotels And Resorts Best Hotel Restaurant Travel Information Cheap Flight and Hotel Packages‎ Trip Travel Insurance Compare Cheap Holiday Travel Insurance Find Cheap Hotel Discounts Cheap Hotels and Flights Vacations and Travel Deals Cheap Hotels Travel Tips Travel Guides Travel Insurance Find Cheap Hotel Discounts Addiction Causes Causes of Alcohol Addiction Causes of drug addiction Drug Abuse Information Substance Abuse Programs Choosing a Addiction Rehab Program Drug Rehab Treatment Information New Drugs Online Personal product Sell Products Online Marketing Product Product Research Analyst Product Research Facilitator The Food Products General Products Beauty Products Business beauty product skin care beauty salon product online product Marketing Products to Advertise online shop originals Product Personal product Sell Products Online Marketing Product Product Research Analyst Product Research Facilitator The Food Products General Products Beauty Products Business beauty product skin care beauty salon product online product Marketing Products to Advertise Product Research Analyst Product Research Facilitator online product The Lawyer The Business Law Bankruptcy Lawyer Law Firms Legal Information Attorney Best Lawyers Justice Laws Website The Law Society Justice Law Limited Personal Injury Lawyer Justice and Law Studies The Justice Law Group Law and Justice Division Justice and legal Commercial lawyer Corporate Commercial Law Criminal Justice Degree Schools Criminal Justice Online Degree Programs School of Criminal Justice Bankruptcy Lawyer Lawyer Requirements Lawyer Employment Specialities of Forex Trading Online Forex Trading Forex Trading Best forex training Forex trading news sites Trading Stock Market Trading Trading Technologies Online Stock Trading Market Trading Online Equity Trading Market Trading Online Equity Trading Trading Central Make Money Online Forex Trading Secure Trading Forex Trader Best forex training Forex trading news sites Start Trading Trading Wedding Wedding Ideas Virgin on Wedding Night wedding definition quotes wedding definition of marriage find the meaning of wedding Wedding Planning Wedding Planning Guide Wedding Websites wedding planning tips Small Wedding Planning Wedding Wedding Ideas Virgin on Wedding Night wedding definition quotes wedding definition of marriage find the meaning of wedding Wedding Planning Wedding Planning Guide Wedding Websites wedding planning tips Small Wedding Planning Wedding Planning Guide Wedding Websites Wedding Ideas Wedding Ideas small business Virgin on Wedding Night wedding definition quotes wedding definition of marriage Personal product Sell Products Online Marketing Product Product Research Analyst Product Research Facilitator The Food Products General Products Beauty Products Business beauty product skin care beauty salon product online product Marketing Products to Advertise online shop originals Product Personal product Sell Products Online Marketing Product Product Research Analyst Product Research Facilitator The Food Products General Products Beauty Products Business beauty product skin care beauty salon product online product Marketing Products to Advertise online shop originals Product Marketing Product Product Research Analyst Product Research Facilitator online product Best Logistics Software Best Application Comparison Shipping Software Solutions Logistics Management Software Logistics Software Systems Software Developers Systems Software Developers Software Engineer Software Developer Education Android Software Applications Most Popular Software Applications Cell Phone Monitoring Software Software Technology Technology Applications Phone System Software Information Technology Spy Phone Technology download Smartphone Spy Phone Technology Logistics Software Systems Software Developers Software Engineer Software Developer Education Android Software Applications Most Popular Software Applications Cell Phone Monitoring Software Software Technology Technology Applications Best Application Comparison Shipping Software Solutions Marketing Concept Affiliate marketing Smart Affiliate Marketing Strategies Best Affiliate Marketing Networks Best Affiliate Programs Digital marketing Internet Marketing Services digital transformation Seo Web Marketing Web Marketing Ecommerce Marketing Strategy Ecommerce Marketing and Technology Marketing Concept Affiliate marketing Smart Affiliate Marketing Strategies Best Affiliate Marketing Networks Best Affiliate Programs Digital marketing Internet Marketing Services Internet Marketing Services Online Business Digital marketing Ecommerce Marketing Strategy Marketing Strategy E-Commerce Technology Digital Marketing Ecommerce Marketing and Technology Managing E-Commerce Marketing Future Technology Health Information Technology Latest Technology Modern Technology New Technology 2017 Science And Technology Technology Technology Articles Technology Definition Technology in Business Technology in Education Technology in Medical Technology News Technology Review What Is Information Technology What Is Technology World Wide Technology List of Information Technology IT Staffing and Solutions Master of Technology in IT Software Quantum Information Digital Forensics Forensic Technology Software Reference Library Technology in Education Drug Abuse Addiction Causes Causes of Alcohol Addiction Causes of drug addiction Drug Abuse Information Substance Abuse Programs Choosing a Addiction Rehab Program Drug Rehab Treatment Information New Drugs Online Pharmacy and drugs Drug Rehab Center Alcoholism Rehab Center Start a New Life after Rehab Drug Rehab Treatment Programs Addiction Causes Causes of Alcohol Addiction Causes of drug addiction Drug Abuse Information Substance Abuse Programs Choosing a Addiction Rehab Program Drug Rehab Treatment Information New Drugs Online Pharmacy and drugs Drug Rehab Center Alcoholism Rehab Center Start a New Life after Rehab Drug Rehab Treatment Programs Drug Abuse Information Substance Abuse Programs Drug Rehab Center Online Shopping Ladies Apparels Online Fashion Shop Shoes Shop Bags Online Clothing Shopping Online Dresses Shopping Shop Wedding Dresses Online Shopping Electronics Market Global Shopping Womens Accessories Shop jewellery and bags Online Shop Accessories Latest fashion handbags Cheap Bags Online Wholesale Handbags Designer Bags and Purses Fashion Online For Women Women's Clothing Accessories Online Shopping Clothing Online Shop Ladies Fashion Online Wholesale Handbags Online Dresses Shopping Shop Wedding Dresses Online Shopping Electronics Market Global Shopping Online Shop Accessories Online Shopping Ladies Apparels Online Fashion Shop Shoes Shop Bags Online Clothing Shopping Online Dresses Shopping Shop Wedding Dresses Online Shopping Electronics Market Global Shopping Womens Accessories Shop jewellery and bags Online Shop Accessories Latest fashion handbags Cheap Bags Online Wholesale Handbags Designer Bags and Purses Fashion Online For Women Women's Clothing Accessories Online Shopping Clothing Online Shop Ladies Fashion Online Wholesale Handbags Online Dresses Shopping Shop Wedding Dresses Online Shopping Electronics Market Global Shopping Womens Accessories Shop jewellery and bags Online Shop Accessories Auto Parts Auto Repair Advice Guide Automotive Electrical Systems Automotive Group Auto International rent car guide Automotive Advertising Agencies Vehicle Electrical System Online Drivers Education Auto Parts and Service Auto Repair Shop Auto Parts Suppliers Auto Repair Shop Auto Body Parts Online Auto Body Parts vehicle's maintenance Driver Training Schools Auto Parts and Service Online Drivers Car Education Online Drivers vehicle technologies electrical Auto Parts and Service technology supports autocar driver education requirements Online Programs Driver Education Vehicle Electrical System Driver Education Online AP Electric Vehicle Market Web Development Webshop Seo Web Marketing Web Tool Development Websites cheap price Free Web Design SEO Consulting Services Web Marketing Web Design Web Design projects Web Design Jobs Online Online Web Development Course real estate luxury condos Commercial Property For Sale Commercial Real Estate Commercial property Apartments for rent apartment finder service Find Apartments for Rent Apartment Luxury Homes Real Estate Developments Mortgage Rates Best Mortgage Rates real estate luxury condos Commercial Property For Sale Commercial Real Estate Commercial property Apartments for rent apartment finder service Find Apartments for Rent Apartment Luxury Homes Real Estate Developments Mortgage Rates Best Mortgage Rates Commercial Property For Sale Commercial Real Estate Commercial property Best Mortgage Rates Hotel and Travel Vacations and Travel Deals Cheap Hotels Travel Tips Travel Guides Travel Information Cheap Flight and Hotel Packages‎ Trip Travel Insurance Compare Cheap Holiday Find Cheap Hotel Discounts Cheap Hotels and Flights Best Restaurants Chinese restaurants Vegetarian Restaurants Hotels And Resorts Best Hotel Restaurant Travel Information Cheap Flight and Hotel Packages‎ Compare Cheap Holiday Travel Insurance Find Cheap Hotel Discounts Cheap Hotels and Flights Vacations and Travel Deals Cheap Hotels Travel Tips Travel Guides Travel Insurance Find Cheap Hotel Discounts