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Weatherill open to GST increase talks

Jul 20, 2015
Premier Jay Weatherill at the National Press Club in July.

Premier Jay Weatherill at the National Press Club in July.

Premier Jay Weatherill says he’s open to a discussion about increasing the rate of the GST to 15 per cent – but he says low income earners will need protection.

Weatherill’s comments come ahead of a premier’s summit to be hosted by Prime Minister Tony Abbott in Sydney this week.

New South Wales Liberal Premier Mike Baird has put the GST increase on the table ahead of the summit, as a means to deal with a looming $35 billion shortfall in health funding.

Baird’s proposal to increase the GST from 10 per cent to 15 per cent includes a compensation package for households earning up to $100,000 to ensure they’re not disadvantaged.

Weatherill told ABC 891 today that Baird’s proposal was worthy of discussion, putting him at odds with the Victorian Labor Government and his federal party colleagues.

Opposition Leader Steven Marshall is vehemently opposed to a GST increase, saying today that South Australian businesses and individuals were already doing it tough.

Weatherill said the premiers had to find a way to fill the revenue shortfall,

“Well we do have to talk about it and he’s raised a very important point, that is something we’ve been saying for a long time – this massive cut to health funding has to be filled in some way,” Weatherill said.

He said he agreed with Baird’s analysis “that the size of the funding gap between what we’re raising at the moment and what we’re needing to spend on healthcare in the future is so large it has to be grappled with, with a new revenue measure. I’ve been proposing that.”

Weatherill, until now, hasn’t been suggesting an increase in the rate of the GST – rather he wants the tax’s base broadened to include financial services.

“What I’ve always said is that GST is an unfair tax – it places the highest burden on the lowest income earners. If we can find a way of grappling with that I’m open to this discussion.”

However, some of his Labor colleagues don’t appear to be open at all.

Victorian Treasurer Tim Pallas says a GST hike is not fair.

“It’s not reasonable for the Abbott government to propose it or for any of their apologists like Mike Baird to be advocating for it,” he told ABC radio.

Shadow treasurer Chris Bowen agreed, slamming Baird’s proposal as a weak and false argument.

Labor backbencher Graham Perrett also noted the prime minister had said 33 times before the 2013 election that there would be no changes to GST.

“I’m sure he is an honorable man who keeps his word,” he told Sky news.

Treasurer Joe Hockey has repeatedly said there must be unanimous support for changes to the GST from the states and territories.

Abbott today said he was encouraged by proposals from Baird and Weatherill for changes to the GST, but wouldn’t say whether a GST increase was the right way to go.

“I’m just not going to speculate but I certainly think it was a very constructive proposal from Premier Mike Baird,” he told reporters in Sydney.

“I think Australians should be hopeful that this generation of leaders is capable of addressing the big subjects,” Abbott said.

Weatherill, continuing his recent more conciliatory tone with the Federal Government, echoed this sentiment.

“I’m not here to shut down any conversation about this,” he said. “We have to reach agreement: we have to come out of this retreat as the nation’s leaders with an agreement about this. We can’t just go in there with fixed positions and simply emerge from this with a further stalemate. If we kick this can down the road it just means that future generations are going to have to grapple with this question.”

– with AAP

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