The AFR’s Alan Mitchell has written a solid piece prognosticating about the best tax reform options to reform Australia’s federation.
Predictably, Mitchell mentions raising/broadening the GST in exchange for lower income taxes, which according to the OECD could produce a long-term increase of almost 1% in Australia’s GDP in the event of a 1% shift in the tax mix. The OECD’s estimate is broadly supported by professor John Freebairn, who has previously noted that “changing the tax mix from (income taxes to indirect taxes) brings gains of 20c to 30c in the dollar and beats anything that a major corporation could do on productivity”.
