Greens recognise the State of Palestine and much more this week

by ray goodlass

The past week has been very productive, and in a positive way too. Our Greens for Palestine (known as G4P)a Greens NSW working Group, proposal that the Aust Greens recognise the State of Palestine passed at National Conference last weekend.

I also sent out invitations and booked the table for G4P’s end of year lunch on 21 November.

Locally I’m working on a public community screening of ‘This Changes Everything’ for 28 November as a prelude to the People’s Climate Change rally the following day.

And this week my column in the ‘Daily Advertiser’ was on rebutting suggestions the GST be raised to 15%. The full text follows below:

GST increase will hit lower income households hardest

Last week national political and economic news was full of stories about taxation reform. Prime Minister Malcolm Turnbull says they must be fair and broad and not focused on single issues such as the GST.

Despite these denials some informed commentators, such as the Sydney Morning Herald’s Ross Gittings, are convinced that “It’s a sure bet Turnbull will raise the GST” to 15%.

The Grattan Institute estimates that a GST rise from 10 to 15 per cent would raise an additional $30 billion a year in revenue.

There has naturally enough there has been a storm of opposition. Bill Shorten declared that Labor is “resolutely’’ opposed to raising or broadening the GST but committed to closing tax loopholes exploited by high-­income earners.

Greens Treasury spokesperson Adam Bandt MP added “There are better ways to raise revenue, such as removing unfair tax breaks for big polluters and the very wealthy.” To which I would add abolishing negative gearing.

Greens NSW MP Dr Kaye pointed out that “The GST is a flat tax that proportionately collects more from those who can least afford to pay.”

Interestingly, Malcolm Turnbull’s plans are also facing a pushback from his own side, with some Liberal MPs ignoring social justice issues, saying that any change to the GST must be accompanied by cuts to personal or business taxes.

Senator Bernardi even jumped on his personal extreme right-wing hobby horse when he said, “There should be a flat rate of tax. Personal income tax that would not exceed 35 per cent. We need to have a higher tax-free threshold.” The mind boggles.

However, locally it was pleasing to see member for Riverina Michael McCormack say that extending the GST to apply to fresh food would only serve to discourage consumers from eating healthily. “We need to encourage people to eat fresh fruit and fresh vegetables.” (DA 5 November).

Inadvertently Mr McCormack also revealed a possible hidden agenda underlying his dietary concerns, which is that the inclusion of food would hit his power base in the MIA hard, when he added that “Producers have a difficult time enough as it is.”

However, despite such political posturing, what really counts is research showing the changes would hit low-income households hard but its negative effects would go almost unnoticed by those at the top end of town. Offsetting the tax hike with lower marginal income tax would only make the disparity between rich and poor worse.

The analysis by the respected National Centre for Social and Economic Modelling (NATSEM) shows the current 10 per cent GST consumes 13.4 per cent of disposable income for those in the bottom fifth of households, but that would rise to more than 20 per cent if the rate were lifted to 15 per cent.

NATSEM’s modelling of the impact of the Abbott government’s two budgets showed that budget consolidation was made at the expense of the less well-off. Surely Messrs Turnbull and Morrison are wise enough not to repeat the Abbott/Hockey unfair policies?

Of course, the government is quick to assure us that this is not the case, and that any changes would be fair, with special emphasis that any GST increase would be compensated by tax cuts. But how do you cut taxes for pensioners and others on fixed low non-taxable incomes?