Changes to GST to come? Labor thinks so

Mathias Cormann: ‘Absolutely no plans’ to raise GST this term. Mathias Cormann: ‘Absolutely no plans’ to raise GST this term.

Mathias Cormann: ‘Absolutely no plans’ to raise GST this term.

Mathias Cormann: ‘Absolutely no plans’ to raise GST this term.

Acting Treasurer Mathias Cormann has tried to squash any suggestion that the Abbott government is considering raising  GST, saying there are “absolutely no plans” to do so this term, despite Trade Minister Andrew Robb outing himself as a supporter of expanding  GST.

Mr Robb said this week that the goods and services tax should be extended to products such as fresh food and education, in what could be the first clear sign of a coordinated campaign underway within the Abbott government to tackle the thorny issue.

He told Fairfax Media that the government did not have plans to change the tax before the next federal election, which is due in 2016, but his comments echoed three Liberal backbenchers who this week called for the big shift in taxation policy.

It was enough for Labor to claim  the government was now mounting a guerrilla campaign to build support for changing the tax.

“Australians now know the Liberal Party’s campaign to increase the GST goes right to the cabinet table,” shadow assistant treasurer Andrew Leigh said on Friday.

But Mr Cormann, also Minister for Finance, told Fairfax Media the government had no plans to change the rate or the base of the GST – this term.

“The government’s position on the GST has not changed since before the last election, when we made the clear and unambiguous commitment that there would be no change to the GST in this term of government,” Mr Cormann said.

“We have, however, also always said that we would go through a comprehensive tax review process during this term.

“The only circumstance in which proposals in relation to the GST will be entertained, is if there is broad community consensus in support, including a broad consensus in favour of such proposals across the Parliament and if there is unanimous support from all state and territory governments, including Labor governments,” he said.

Prime Minister Tony Abbott has previously promised there will be no changes to the 10 per cent GST, and on Friday he said it would not be going up in the government’s current term.

He added that no changes could be made to the GST without the support of all the states and territories.

“The GST will not change in this term of Parliament and it cannot change in any term of Parliament without first of all the support of all the states and territories including the Labor states and territories and without effectively a parliamentary consensus,” Mr Abbott said.

But a 2013 legal opinion by barristers Bret Walker and Anthony Lang suggests that the intergovernmental agreement which contains this requirement for consensus was not legally binding, and therefore the GST legislation could be changed simply by a vote in both houses of federal parliament.

“As far as I am concerned what we should be on about is lower taxes not higher taxes. Lower, simpler, fairer taxes is the absolute objective that we are taking into this tax white paper process this year,” Mr Abbott told Sydney radio 2GB on Friday.

Mr Abbott wished “good luck” to those advocating a better tax system, which includes several government backbenchers led by Country Liberal Victorian Dan Tehan who have called for a debate about extending the GST in the event the Coalition wins the next election.

But Victorian Labor Premier, Daniel Andrews, says there are no circumstances where he would support an increase in the tax or applying it to fresh food.

“If Victoria refuses to support it, and we won’t, going on food or the rate increasing, then it can’t go up,” Mr Andrews said.

“The Goods and Services Tax is not a fair tax because it has no regard for a person’s capacity to pay,” he said.

South Australian Labor Treasurer Tom Koutsantonis said the GST was a “regressive” tax and his state did not support changes to broaden its base or lift its rate.

A spokesman for the Liberal Tasmanian government said: “We don’t support any changes to the GST.”

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