Whilst any potential changes to the GST are extremely politically sensitive, a number of recent economic reports suggest that reforming GST can deliver the following benefits:
- Tax cuts
- Improved household incomes
- Increased income growth
- Removal of inefficient taxes
The reports show that the fear and misconception often associated with GST reform is misplaced. Even an increase in the rate to 15% would result in Australia’s rate remaining less than the average rate across OECD nations at over 19%.
A new report released on 15 February 2015 looks in detail at 4 different scenarios of changes to the base and the rate of the GST, together with the removal of some inefficient taxes. The findings are summarised below: