Government insists there’s ‘no plans’ to increase GST, Hockey flags cuts to

On Monday, Mr Hockey said the Government would unveil personal income tax cuts before the next election, in response to bracket creep, when inflation drives up wages, pushing a greater number of Australians into higher tax brackets.

His comments were interpreted as a sign the government may be preparing the ground for GST changes – extending the GST to healthcare – that it could take to the next election.

“But say they pick up an extra shift, or are tapped on the shoulder for a promotion”.

Joe Hockey, dogged by perceptions that he has contributed nothing of value to the Abbott government’s cause (or indeed his own) since the May federal budget, emerged from self-imposed policy purgatory on Monday.

Increasing Australia’s rate of goods and services tax (as well as broadening it to cover health and education) might have provided the Coalition with just the tax-cut salvation it so desperately seeks.

“There is no doubt that with the exemptions in place in relation to GST, the GST’s base is narrow, particularly with the growth in the healthcare sector, which is essentially GST-free”, Mr Hockey said.

While Hockey says a range of taxes is being considered the government has ruled out various options, such as reducing the big tax break for superannuation and changes to negative gearing, that could help somewhat in the heavy lifting of financing income tax cuts.

“The global sharemarket sell-off appears more a correction than the start of a new crisis”, Mr James said.

NSW premier Mike Baird recently proposed a rise in the GST – which is a Commonwealth tax but with all the revenue going to the states – to finance growing health costs.

After the speech, he and Mr Abbott said the government was always looking for spending cuts.

“There’s a little bit of a concern there that we are not at the point of actually doing things when it comes ton tax reform”, said the Australian Industry Group’s Innes Willox today on ABC radio.

Treasury Secretary John Fraser said in May the revenue earned from bracket creep would be $25 billion over the four-year budget forward estimates period.

“The treasurer appears to be caught in a cycle of restating the problems rather than rethinking the solutions”, he said in a statement. But the estimated revenue shortfall from the tax cuts would be $165 billion in 10 years.

On the matter, Opposition leader Bill Shorten said in Brisbane on Tuesday: “This government has no plan for the future”.

Lower tax rates are crucial to economic stimulus efforts and to providing the incentive necessary for Australians to work harder, lift their productivity, and raise living standards. “He looks like a Treasurer who has given up”, he sad.