Grattan Institute proposes raising GST to 15% to fund state budgets
What happened
The Grattan Institute proposed raising the Goods and Services Tax (GST) from 10% to 15% and expanding it to cover all food items. The Institute argues this is necessary because state government budgets require more funding and both federal and state governments need additional revenue for debt repayment.
From sydneysun.com
Why it matters
The Institute suggests that increasing consumption taxes like the GST is an efficient way to establish reliable government revenues. The Institute also claims that consumption taxes achieve efficiency by slowing the economy by forcing consumers to purchase less.
From sydneysun.com
Who's involved
- Grattan InstituteProposed raising the GST and broadening consumption tax coverage.
- RBADiscussed economic policy ideas related to demand dampening.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Commonwealth BankSpeculative
Commonwealth Bank might see increased credit risk due to reduced disposable income from a consumption tax increase.
- WesfarmersSpeculative
Wesfarmers could face reduced consumer purchasing power and higher costs of goods sold following a GST increase.
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The entities involved
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Grattan Institute
Australian public policy think tank
Nothing else this week.
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RBA
Spanish media enterprise
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