SECRETARY of the Australian Treasury John Fraser believes the Australian Government has missed a trick by failing to seriously consider the option of raising the goods and service tax (GST).
Discussion papers have long raised the possibility of increasing Australia’s GST from 10 per cent to 15pc, most recently in a 2015 green paper, to create more revenue without more income tax.
However, politicians of both persuasions have assessed such a move as political suicide and have repeatedly said the 10pc level is off limits.
Mr Fraser, speaking at the Victorian Farmers Federation (VFF) grains group annual conference in Horsham this week, said this was an opportunity lost.
“With the GST there should have been more debate,” he said.
“Australia has one of the top rates of income tax in the world and is very dependent on corporate tax for its revenue.”
He said the top tax bracket in Australia kicked in at 2.2 times the average salary, compared to the US where the highest tax bracket is only activated when a person earns 8 times the average wage, while the percentage paid was also high.
“It is now a global economy and these rates of tax are a disincentive when we are trying to attract people in these high paying roles who contribute revenue to the State.
“Like it or not, we are in competition against other countries for a workforce that is now highly mobilised and the tax rate can hurt.”