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13 January 2015
by Peter Wicks

Plan A- How the GST could be linked to NSW and QLD State elections

Break a promise? Who me?

With rapidly approaching elections in NSW and Queensland there is something worth considering that has not been talked about now for quite a while.

It is interesting that months after the budget we are once again hearing mumblings from Coalition backbenchers and think tanks about changes to the GST, yet nothing about Abbott’s need for the states to demand these changes.

As an aside I find it a source of constant amusement that these Coalition so-called “think tanks” can only ever think of raising taxes or introducing new ones. I never hear them talk about expanding markets, investing for the future, or diversifying services, it’s all tax, tax, and more tax… The thinking level in these tanks is clearly below empty.

So if we cast our minds back to May last year, just before the Abbott/Hockey great unfair budget of 2014 was first announced.

Last year in May there were large scales cuts from the Abbott government to things that a coalition government sees as a burden rather than a service, little things like public health and public education. With the announcement of these huge federal cuts to schools and hospitals the problem of picking up this funding shortfall was to be left to the State Governments.
Joe Hockey at the time stated:

“We went to the last election promising that we would not change the GST. We are honouring that commitment.”

However it was clear to everyone that Abbott and Hockey were pressuring the States to take the heat and demand changes to the GST.

Two of the States that Abbott was relying upon to whistle his tune and demand GST changes are now headed for an election, and already the tune is in the air.

On Wednesday Julie Bishop weighed in on the debate saying:

“We should have a constructive, mature debate about our taxation system and that would include the GST.”

So clearly even if GST changes are not on the drawing board, they are certainly part of the discussion.

Recently there has been discussion within the Coalition on applying the GST to fresh food.

Fresh food is already expensive, and as we know take-away is often cheaper. Increasing to price of fresh food would only serve to benefit the fast food industry that Liberal Senator Fiona Nash has seemed so desperate to prop up in the past.

It will certainly not benefit the states as the associated rates of health issues would increase with the increased fast food consumption.

The Coalition think tank claim that applying GST to fresh food would raise $6 Billion for the economy.

That is one way to put it, however prefer these ways of putting it;

  • Applying GST to fresh food would cost the taxpayer $6 Billion.
  • Applying GST to fresh food would raise the cost of living by $6 Billion
  • Applying GST to fresh food would hurt families to the tune of $6 Billion

Let’s not also forget that applying GST to fresh food would hurt farmers as their produce sales plummet and as their margins are further squeezed by the big supermarket chains so their profits don’t suffer.

Farmers eh? I thought they had a political party that looked after their interests? That’s right, the Nationals…

The Nats help out the farmer by denying climate change, backing the Coal Seam Gas miners taking their farmland and poisoning their water supply, and now by hoping to increase the cost of living by adding GST to the spoils of their labour. I thought the farmers were already doing it tough, and in some parts of the nation dealing with drought. With friends like the National Party looking after them they sure don’t need enemies…

Did someone just say farmers?

Nevertheless for some like the Coalitions Dan Tehan raising our cost of living by $6 Billion isn’t anywhere near enough.

As Fairfax are reporting Dan the man Tehan wants to slug the taxpayer for $21.6 Billion by also applying the GST to other luxuries such as education and health.

The GST under the Abbott government that promised there would be no changes to the GST is happy to continue discussions about changing the GST, in fact they are welcoming the discussion.

With a Federal government happy to entertain such a drastic rise in the cost of living it is little wonder Tony Abbott is poisonous to a Coalition state government election campaign with Premiers suddenly having allergic reactions to his presence.

However if the Coalition are to win the upcoming state elections with a full term ahead of them the Coalition Premiers may follow Party lines heeding Abbott and Hockey’s call and start asking for changes to the GST. Thus giving Abbott an excuse to break yet another promise.

Bear this in mind, when Joe Hockey announced the education and health cuts and started the debate over GST revenue, this was what Campbell Newman said when he was supposed to be at his most angry;

“…we need proper secure revenue streams so that our populations, states and territories, can actually get the services they deserve.”

Would this include changes to the GST Mr Newman?

However there is one way that we can be sure that the State governments don’t sing Tony Abbott’s tune and ask for a GST review.

Vote for a change of government in January and March.