In­creas­ing GST will hit poor the hard­est

Southern Telegraph - - Opinion - Michael Whit­worth Safety Bay

In Aus­tralia we have in­come tax, bet­ter de­scribed as an earn­ing tax, and a host of in­di­rect taxes, stamp duty, State and lo­cal gov­ern­ment rates, ex­cise on fuel plus 10 per cent GST on some goods and ser­vices.

The un­palat­able truth is Aus­tralia is in fis­cal trou­ble, with more than $400 bil­lion in Fed­eral debt, $1.8 tril­lion in per­sonal debt, GDP set to fall and a de­cline in gross in­come per capita.

Fam­i­lies have grown used to the abun­dant mid­dle-class wel­fare dur­ing the boom time, now the Gov­ern­ment needs to roll back the spend­ing but fears the po­lit­i­cal back­lash.

Their an­swer is to widen the GST per cent rate or give it a larger base to draw from rather than rais­ing in­come tax.

Sim­ply, the GST is a con­sump­tion tax which hits the lower end of the so­cio-eco­nomic scale hard­est as they spend most of their in­come with lit­tle left over to save or in­vest.

One thing for sure, the rich with in­flu­ence will not be shoul­der­ing their fair share of the load in cor­rect­ing the bud­get im­bal­ance.

In­creas­ing the higher mar­ginal tax rates would be far bet­ter and fairer so­lu­tion for 80 per cent of Aus­tralians.

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