CANBERRA -- Treasurer Scott Morrison insists there is no preferred model for tax reform in Australia as he outlined the Turnbull Government's politically risky case for broad change.
Morrison on Thursday addressed the Economic and Social Outlook Conference at the University of Melbourne amid widespread speculation the government is moving to raise and broaden the rate of the Goods and Services Tax (GST) and while the states and territories lobby hard for increased revenue.
“The Government has not yet put forward any preferred option or proposal, “the Treasurer said.
“The only current public advocates for changing the GST are State Governments and former Labor Premiers.”
Still proposals to raise and broaden the GST are being thrown around, possibly to match New Zealand’s 15 percent GST, ahead of the finalisation of the White Paper process on tax reform.
Prime Minister Malcolm Turnbull earlier Thursday declared fairness “absolutely critical” to future economic reform in Australia, or it would not be publicly supported.
The peak welfare body ACOSS has already sought to get the New Zealand model knocked out, commissioning the National Centre for Economic Modelling (NATSEM) to look at the impact on low to middle income earners.
The research, which factored in compensation in the form of a five percent income tax cut, found low income earners would be hardest hit.
The Opposition, which does not support any changes to the GST, is accusing the Turnbull Government of being too tough on low income earners and not providing enough detail.
“It's time for Malcolm Turnbull to start making some decisions, to stop talking and to start laying out his plans, “Treasury spokesman Chris Bowen told reporters in Melbourne.
Morrison believes there is mischief afoot.
“We will be patient and clear headed,” he said.
“Of course there will be imaginative, frustrated, innocent as well as malevolent speculation.”
“However, it is our responsibility and in particular my role to get the job done – that is where my focus will remain and I will apply the same discipline as in previous tasks.”
According to the Treasurer, Australia must adapt better to the digital economy, global competition and an ageing population.
“Australia’s tax system was designed in a different era, and a different economy,” Morrison said.
“Many features of the existing system will, over time, limit jobs growth and make it less attractive to invest in Australia, affecting Australia’s continuing prosperity.”
The Prime Minister wants a “grown-up”, open debate on taxation, with all options and arguments carefully weighed up.
“That is why we are not trying to reduce complex issues to slogans,” he said.
“(That’s) why we are not playing the rule in, rule out game. That's why we welcome every contribution to this debate.”
The Prime Minister said political change is needed and so is policy "agility".
“If a particular policy approach doesn't deliver as required or anticipated, we have to be ready to reappraise it, reset, as and when needed, to objectives can still be met,” he said.
“If a policy doesn't work, chuck it out.
"If you see somebody who's achieving your objective in a better way, remember are the sincerest form of flattery is plagiarism. Copy them. Take it over. Adjust. Tweak. Agility is the key. The objective is what we're all about."