Townsville Bulletin - - NEWS - MILES GOD­FREY

PRIME Min­is­ter Tony Ab­bott has wel­comed a pro­posal to in­crease the GST to 15 per cent, with half the pro­ceeds ploughed back into larger wel­fare pay­ments and in­come tax cuts for lower in­come house­holds.

But any change to the GST ap­pears doomed, with Vic­to­ria re­sist­ing an in­crease and Western Aus­tralia Trea­surer Mike Na­han say­ing he was “not in­ter­ested”.

Queens­land has also re­fused to ne­go­ti­ate on GST.

An ex­tra $ 30 bil­lion a year would be raised from in­creas­ing the GST un­der a pro­posal tabled by NSW Premier Mike Baird ahead of this week’s spe­cial COAG meet­ing and lead­ers’ re­treat on tax re­form.

Pro­vi­sional mod­el­ling shows that $ 15 bil­lion of the new rev­enue could be used to com­pen­sate low­er­in­come fam­i­lies, in­clud­ing small in­creases in wel­fare pay­ments to help meet the higher cost of liv­ing.

The cash could also be used to fund in­come tax cuts, po­ten­tially of around 1 per cent, for house­holds earn­ing less than $ 100,000 and smaller cuts for house­holds earn­ing $ 150,000 or less.

The other half of the ex­tra GST rev­enue would be used to help bol­ster state and ter­ri­tory spend­ing.

NSW es­ti­mates that there will be an an­nual $ 45 bil­lion short­fall in state bud­gets by 2030.

Mr Ab­bott de­scribed Mr Baird’s pro­posal as “very sen­si­ble, strong and struc­tured” yesterday, join­ing South Aus­tralian Premier Jay Weather­ill and key busi­ness lead­ers in wel­com­ing the plans.

“I think it was a very con­struc­tive pro­posal,” Mr Ab­bott said.

The Fed­eral Gov­ern­ment says any GST in­crease must have unan­i­mous sup­port from the states – and that re­mains the big­gest hur­dle, with La­bor lead­ers in Vic­to­ria, Queens­land and the Fed­eral Par­lia­ment lin­ing up against the plans.

Op­po­si­tion Leader Bill Shorten ac­cused the Ab­bott Gov­ern­ment of forc­ing an in­crease to the GST af­ter ax­ing $ 80 mil­lion in state ed­u­ca­tion and health fund­ing.

“The real prob­lem with a Lib­eral GST … is that it’s go­ing to in­crease the cost of liv­ing pres­sures on Aus­tralian fam­i­lies,” he said.

Premier An­nasta­cia Palaszczuk vowed to scut­tle the NSW push and is also de­mand­ing the Fed­eral Gov­ern­ment cough up more for in­fra­struc­ture fund­ing in Queens­land.

Ms Palaszczuk has writ­ten to Mr Ab­bott call­ing for ac­cess to the $ 5 bil­lion fed­eral in­fra­struc­ture fund.

The move would give Queens­land an ex­emp­tion on rules ev­ery other state has to abide by and is likely to be re­jected.

Ms Palaszczuk said the in­fra­struc­ture fund should be carved up ac­cord­ing to pop­u­la­tion, which would give Queens­land about $ 1 bil­lion.

“With 72¢ of ev­ery tax dol­lar col­lected in Queens­land go­ing to Can­berra, why should we go want­ing?” she wrote.

CON­TENTIOUS IDEA: NSW Premier Mike Baird has pro­posed in­creas­ing the GST to 15 per cent.

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