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Fightback - setting the record straight John Kerin falls further behind in fightback debate



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Peter Reith

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1 December 1991 Bulletin No: 27

FIGHTBACK - SETTING THE RECORD STRAIGHT

JOHN KERIN FALLS FURTHER BEHIND IN FIGHTBACK DEBATE

It is surprising to see how far behind the debate are John Kerin and his new computer model. He is still examining the wholesale sales tax and presumably has a long way to go before he reveals his views on payroll and fuel taxes.

As he today released an assessment of the incidents of the

wholesale sales tax, he should also reveal his estimates of the amounts of wholesale sales tax paid by individual Australians in their weekly shopping baskets, as the Coalition has in table 5.2 of the Fightback document.

It is true that the wholesales sales tax has a cascading effect throughout the economy, as is pointed out in table 5.1 of the Fightback document. But that is hardly the end of the debate.

The wholesale sales tax is, contrary to John Kerin's assertions, clearly out of step with the OECD because it is narrowly based, it has multiple rates, it taxes inputs, it is regressive and it

taxes exports and favours imports.

Even Professor Head, who has given the Government some

encouragement, has said that the wholesale sales tax is

indefensible and that its replacement with a broad based

consumption tax is desirable.

In recent days that view has been reinforced by the Department of Industry, Technology and Commerce and of course, a few short years ago, the Government itself strongly advocated the abolition of wholesale sales tax.

Mr Kerin's press release is a very poor substitute for the

detailed and considered response which Fightback demands. He is going to have to do a lot better than this, if he expects anybody to take him seriously.

D160/91

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