Chartered accountants believe Treasurer Scott Morrison should use next Tuesday’s budget to open a new debate on increasing the GST.
Mr Morrison last week ordered the Productivity Commission to undertake a review of how the GST should be carved up between the states and territories.
Chartered Accountants Australia and New Zealand believe it is an opportunity to talk about growing the revenue the GST raises rather than just the method of its distribution.
The government did look at raising the GST last year but decided it did not do enough to lift economic growth.
The GST rate has been at 10 per cent since it was introduced in 2000 with exemptions in health, education and fresh food remaining intact during that time.
“Australia will not solve long-term economic and budgetary problems with an ostrich-like attitude, hoping the issues facing the nation will simply go away,” head of tax at Chartered Accounts Michael Croker says.
He wants the government to expand the scope of the Productivity Commission’s inquiry so that its outcomes can “actually be meaningful”.
As a first step, Mr Croker is urging the government to use the budget as a platform to discuss with Australians the need to increase the rate of the GST to 15 per cent and broaden the GST base.
The increased revenue could be directed to both compensation, to ensure it’s fair and affordable, and to fund personal tax cuts and increases in pensions, family payments and benefits.
It could also be used to eliminate inefficient state taxes.
“This is an opportunity to grow the pie, not just argue over the share of it,” he said.