States panic as GST revenues enter terminal decline

Treasurer Josh Frydenberg says the federal government would not pursue changes to the GST without a mandate from the public, adding that it has no plans to seek one. His comments follow the New South Wales government’s release of a discussion paper which canvasses broadening the GST base to offset a forecast decline in revenue from the tax. Several states have indicated that they may be open to considering GST reforms, although Victorian Treasurer Tim Pallas has ruled out an increase in the tax rate. From The AFR:

“Due to a high number of exemptions, the GST covers a small share of all household spending relative to the Organisation for Economic Co-operation and Development [OECD] average and this is falling over time.”

Mr Perrottet said it was now worth looking into where that GST should be broadened.

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