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States must agree on GST reform: Morrison

Division between state governments on GST reform threatens to scuttle plans to raise its rate or expand the tax to fresh food, education and health.

Former Telstra boss David Thodey’s review of the tax system recommended raising the consumption tax, replacing stamp duty with broad-based land tax, and payroll tax reform.

Prime Minister Scott Morrison said NSW and South Australia had opposite views on taxes including the GST.

“In the first instance, I think there needs to be a greater consensus amongst the states that clearly doesn’t exist at present,” he told reporters in Canberra on Thursday.

He said it was important states reached agreement before any proposals got off the ground.

Treasurer Josh Frydenberg insists there is no plan to raise the GST despite his NSW counterpart Dominic Perrottet pushing for changes.

Mr Frydenberg said the federal government’s focus was getting people back to work after coronavirus shutdowns.

“We’ve got no plans to increase the GST,” he told Sky News.

The federal treasurer welcomed the Thodey tax review.

“It’s not the first and it’s not the last report into our tax system,” Mr Frydenberg said.

The GST rate has stayed at 10 per cent since coming into place 20 years ago.

But the share of household spending subject to it has fallen from 60.8 per cent in 2001/02 to 55.4 per cent in 2018/19.

The review also calls for the streamlining of commonwealth-state funding agreements and a national road user charge.

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