From 2000, when the Australian GST was introduced, to 2013, central governments across the OECD raised value-added tax or GST standard tax rates on 35 occasions, including 22 times during the aftermath of the 2008-09 global financial crisis.
The prohibition against unilateral changes to the GST rate or base can also be argued on other grounds.
For one, those on lower incomes would be likely to financially suffer as a result of increasing the GST, particularly in the absence of offsetting compensation, because more of their disposable incomes are directed toward everyday consumption items.
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The rules surrounding GST rate and base changes also provide some protection against the dissipation of efficiency gains, in the event that any resultant growth in revenues from GST extension are to be spent by governments upon wasteful programs and activities.
In any case, contrasting the notion that the prohibition against unilateral changes to the GST rate or base has punitively starved the states of revenue is the fact that Australia has recorded a substantial increase in GST revenue collections.
As a consequence of general growth in nominal consumption expenditures, GST revenue has increased from about $24 billion in 2000-01 to about $51 billion last financial year.
This GST revenue growth was equivalent to an annual growth rate of about six per cent; well in excess of the average annual increase in general prices throughout the Australian economy.
With Australia hamstrung by duplicated bureaucracies and predatory commonwealth intervention in state policy affairs, the case for federalism reform is as obvious as it is imperative.
But the federalism reform Australia needs is not a GST hike worsening our tax competitiveness, and which would fail to resolve the underlying spending and tax assignment problems inherent within intergovernmental relations.
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Therefore, the only reasonable answer to Abbott's Tenterfield question about a bigger GST would have to be a resounding "no".
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