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GST hike would hit working people, crack down on rorts instead

20 September 2013 By ACTU

Raising the GST or applying it to fresh food, health and education costs would unfairly hit working people and the government should instead remove tax breaks for high-income earners and crack down on tax evasion, the ACTU said today.

At a time the new Abbott Government is dismantling the mining tax, it is disturbing to see it come under pressure from Liberal state governments to raise the GST, said ACTU President Ged Kearney.

Priorities for tax reform should include removing inequitable tax breaks on superannuation for high-income earners and cracking down on tax avoidance via sham contracting, said Ms Kearney.

"The GST is a consumption tax that disproportionately affects low and middle income people, who spend most of their incomes on goods and services," said Ms Kearney.

"Raising the GST to 12.5 or 15%, or applying the GST to fresh-food and essential services like health and education, would be a real hit on the living standards or low and middle income households.

"Before the election, changes to the GST were ruled out by Mr Abbott, but it has taken only a few days for Liberal Party figures to start the push for changes."

"Unions welcome a mature discussion about the tax base and how we fund the services every Australian deserves – but why should all the onus be put on working people?

"Any move to increase tax revenue should be progressive and fair.

"If the government is seeking higher revenue, priorities for tax reform should include a focus on existing concessions and loopholes in the corporate and personal income tax system.

"A Government planning to repeal the mining tax despite the Henry Review recommending that Australia needs a tax of this form has no excuse to touch the GST."

Contact: Jackie Woods 0414 241 483

Contact Details
Name: David Smith, ASU National Secretary
Telephone: 03 9342 1400