Ok, most of the focus on discussions about the GST has been about how it’s a regressive tax and how it affects the poor more than the rich.
But there’s one other thing in this debate that hasn’t been prominent in discussions or commentary. If the GST is widened to include items currently exempt, how will that affect Health spending?
Given that a large chunk of health spending is paid for by the various governments, will they just be charging themselves more, or will the rebates stay the same and it’ll be up to the patient to make up the difference. In other words, will it be a “price signal” by stealth?
Even if the government does the right thing and increases its share by the increase in the GST, this will obviously lead to a blowout in Health costs which, of course, will have politicians arguing that it’s just not sustainable. (Interesting that the blowout in the costs of offshore detention never leads to screeches of how this spending isn’t sustainable. On a state level, one never hears that the massive increase in the cost of running prisons doesn’t mean that the “tough on crime” policy isn’t sustainable!)
Either way, it fits in well with the Liberals’ plan to destroy Medicare. Why they want to do this is a mystery to me, but it’s always been their policy either explicitly or part of their hidden agenda since Gough first introduced it.
Of course, the likely scenario is that widening the GST base will be discussed, but dismissed on the grounds that it would make it unfair on those struggling with their grocery bills, health costs or school fees. And when, Malcolm magnanimously rejects broadening the base, then a mere extra five percent will seem the reasonable alternative – in much the same way that removing Abbott led to the big poll bounce. “Gee, Malcolm answered that question by talking on something vaguely related to the actual subject and he didn’t way anything about stopping the boats. He’s so much better!”
Of course, the Liberals do some very strange things. I’ve never been able to fathom why they stop any increases in the superannuation guarantee every time they get into government. Howard froze it when he got in, and Abbott did the same. Given their rhetoric about people needing to plan for their retirement and the government not supporting them, one would have thought that increasing everyone’s super would be something they’d be right behind.
When it comes to superannuation, I’ve always wondered why it’s subject to a flat tax of fifteen percent. I’ve always thought that it would be better if there was a threshold before it was taxed. For example, imagine the first five thousand dollars was exempt from tax and the rest was taxed at twenty percent. This would be a big boost to the lower income earners and people would need to be on an income of more than $100,000 before they were paying more. The tax on super earnings could also work on a similar arrangement.
But I don’t expect we’ll hear much about changing the taxes on superannuation. It’s about as likely as the government using the phrase “a great big tax on everything” when refering to the GST.