Fresh cost-of-living blow that every Aussie needs to know about

Daily Mail​

a day ago

Australians could soon be paying a 15 per cent GST as a Teal MP argues an increase is necessary to help those worse off.
The Goods and Services Tax has been kept at 10 per cent since it debuted in July 2000, with exemptions for fresh fruit and vegetables, meat, health and education.
But Teal MP Kate Chaney, who represents the upmarket Perth seat of Curtin, has called for the GST to be raised to 15 per cent, with the existing exemptions removed.
The GST proceeds are now distributed among the states and territories to help pay for things like transport infrastructure, schools and hospitals.
But Chaney wants revenue from a higher consumption tax to fund a $3,300 rebate to every Australian adult, arguing this would benefit low-income earners.
'Under a progressive GST model, we could increase the rate of GST to 15 per cent and remove exemptions on food, education and health, bringing Australia in line with other OECD countries,' she said.
'But to ensure equity is maintained, the government could pay every Australian adult a $3,300 annual "basics rebate", which would effectively mean they pay no GST on their first $22,000 of expenses, making the lowest 60 per cent of income earners better off.'
Chaney, whose father Michael Chaney is chairman of retail conglomerate Wesfarmers, cited Parliamentary Budget Office modelling to argue the GST, a regressive tax, would in fact help the poor if it funded compensation.
'PBO modelling shows that it is possible to broaden the GST base and increase the rate without shifting the burden disproportionately to lower-income earners, through a "basics rebate",' she said.
'In fact, the lowest 60 per cent of income earners could be better off under a progressive GST.
'GST is an efficient tax – it is hard to avoid – and with lower and middle-income groups potentially better off under this proposal, it can be progressive.
'Unlike personal income tax, it doesn't hamper productivity.'
Treasurer Jim Chalmers in June revealed he would be open-minded about expanding the base of the GST to raise more government revenue, ahead of this month's Economic Reform Roundtable.
'What I'm going to try and do - because I know the states will have a view on it, I'm going to try not to dismiss every idea that I know that people will bring to the roundtable,' he told the National Press Club in Canberra at the time.
'I suspect the states will have a view about the GST - it's not a view that I've been attracted to historically but I'm going to try not to get in the process of shooting ideas between now and the roundtable.
'One of the ways that I am going to be inclusive and respectful in the lead-up to this roundtable is I suspect people will raise that question.'
Items like fresh fruit and vegetables, bread, cooking oil, meat and unflavoured milk were exempted from the 10 per cent GST under a political deal reached in 1999 between former Liberal prime minister John Howard's government and the Australian Democrats in the Senate.
Labor had lost the 1998 election campaigning against the Coalition's proposed GST and voted against it in Parliament.
Personal income taxes now make up more than half of federal government revenue, with Treasury expecting to collect $349.7billion from income taxes in 2025-26.
This means working-age Australians are disproportionately carrying the tax burden, with Treasury only forecasting Budget deficits in coming years.
'Intergenerational inequity is built into our tax system - younger generations are facing the growing burden of funding an ageing population and will bear the cost of future interest payments to cover the structural deficit forecast for the next decade,' Chaney said.
'We have to have courageous conversations about other revenue sources to avoid handballing this problem to future generations.'