The Anniversary of the GST

Way back in the late 90s we finally got a reasonably comprehensive goods and services tax.
It wasn't the real deal. There were too many exemptions and far too many people complained the GST  was a bad tax because it heightened inequality.

Indirect taxes will always be regressive. That is the point of their simplicity. The less exemptions means less opportunities for tax avoidance. ( The greater the rates the more avoidance as well as Italy will attest to.)

Thus you examine the whole tax system to see if it is progressive not one tax.

This is why I have always supported the idea of a GST. It got through on the support of the Australian Democrats. I remember asking their leader at the time ( was it Meg Lees?) why there was a different rate for the Encyclopedia Britannia for the book and the CD. She could not answer.

The other thing was the States were supposed to eliminate a myriad of inefficient taxes but Peter Costello was too laxy to follow up on this.

I am always amused how the most fervent supporters of the GST are ardent opponents of a price on carbon. They believe a price on carbon is a big tax and regressive. Quite clearly these people are not too bright.

My view is the GST should be broadened. I would increase it as well. Given the incidence with the GST and payroll tax is broadly similar. I would increase it and then eliminate the payroll tax. It is much better to have but one tax rather than two.