GST IN­CREASE EDGES CLOSER

COAG to com­mis­sion re­search into sales tax hike

Townsville Bulletin - - NEWS - STEVEN SCOTT

STATE and Fed­eral Gov­ern­ments rake in about $ 420 bil­lion a year in taxes be­tween them, but they are now one step closer to boost­ing their hit on the na­tion’s hip pocket.

A hike to the GST is be­com­ing more likely, with Prime Min­is­ter Tony Ab­bott and state lead­ers set to com­mis­sion de­tailed mod­el­ling about the im­post.

But the Fed­eral Gov­ern­ment is likely to re­ject a push by Premier An­nasta­cia Palaszczuk to dou­ble the Medi­care levy to 4 per cent.

The changes could be agreed as soon as the end of this year, with trea­sur­ers set to dis­cuss the plans next month be­fore fur­ther talks be­tween lead­ers.

Some fed­eral min­is­ters are op­posed to in­creas­ing the Medi­care levy and only want an in­crease to the GST if there are other tax cuts to com­pen­sate fam­i­lies.

But Queens­land and other states are push­ing back against the com­pen­sa­tion plan be­cause they fear this will not leave enough to pay for grow­ing health and ed­u­ca­tion costs.

A lead­ers’ sum­mit in Syd­ney broke up last night with­out an agree­ment on new taxes, but in­creases to the GST and Medi­care levy have firmed as the two pre­ferred op­tions.

In yesterday’s closed meet­ing, Mr Ab­bott is be­lieved to have ar­gued in favour of NSW Premier Mike Baird’s pro­posal to lift the GST rate to 15 per cent.

Any tax­a­tion re­forms on this scale need to go to an elec­tion AN­NASTA­CIA PALASZCZUK

But Mr Ab­bott has not com­mit­ted to this po­si­tion and in­sisted he wanted all op­tions dis­cussed.

“It’s clear we must be brave, am­bi­tious and open­minded if we’re to achieve the re­forms Aus­tralia needs,” Mr Ab­bott said.

“It’s in­creas­ingly clear that we must work to­gether – any mean­ing­ful re­form will re­quire both courage and co- op­er­a­tion.”

One of the lead­ers is be­lieved to have dis­cussed op­tions of broad­en­ing the GST but most of those who want the tax changed sup­port an in­crease in the rate.

Ms Palaszczuk and Vic­to­rian coun­ter­part Daniel An­drews both op­posed changes to the GST but ar­gued in favour of hikes to the Medi­care levy.

Ms Palaszczuk re­vealed she wanted the Medi­care levy to in­crease in stages and even­tu­ally dou­ble to 4 per cent, while Mr An­drews called for a max­i­mum of 3 per cent.

The Queens­land plan would see some­one earn­ing $ 100,000 pay an ex­tra $ 2000 a year in the Medi­care levy.

But the Premier de­nied she was break­ing an elec­tion prom­ise of no in­creases to taxes, as the Medi­care levy is a fed­eral im­post.

She said the op­tions to in­crease the Medi­care levy were “just pro­pos­als” and she would not sup­port any tax hike un­less it had been en­dorsed by vot­ers.

“Any tax­a­tion re­forms on this scale need to go to an elec­tion,” Ms Palaszczuk said.

In­creased fund­ing for ed­u­ca­tion and health are likely to be de­bated fur­ther at a for­mal Coun­cil of Aus­tralian Gov­ern­ments ( COAG) meet­ing to­day.

The COAG meet­ing will also sign off on a new ter­ror­ism alert sys­tem and dis­cuss na­tional plans to tackle do­mes­tic vi­o­lence and ice.

HEAVY­WEIGHTS: Lo­cal Gov­ern­ment Rep­re­sen­ta­tive Troy Pickard, NT Chief Min­is­ter Adam Giles, Queens­land Premier An­nasta­cia Palaszczuk, WA Premier Colin Bar­nett, SA Premier Jay Weather­ill, Prime Min­is­ter Tony Ab­bott, NSW Premier Mike Baird, Vic­to­rian Premier Daniel An­drews, Tas­ma­nian Premier Will Hodg­man and ACT Chief Min­is­ter An­drew Barr pose for photos ahead of the Lead­ers’ Re­treat at Vic­to­ria Bar­racks in Syd­ney yesterday.

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