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Not another tax

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press release press release


ACTING SHADOW TREASURER FAX 02.476.6462 PH. 02.476.3675


The Prime Minister in his speech to the Labor Party Conference today stated that the Coalition's broad based Goods and Services Tax "would extract over and above the present Wholesale Sales Tax an additional $12 billion from the Australian community."

What the Prime Minister fails to state in any explicit way is that it is an essential part of the Coalition proposal to abolish the illogical distorting unfair sales tax in its entirety.

The fairer Goods and Services Tax is a tax to replace the sales tax, it is not an additional tax.

The Prime Minister also fails to state that some billions of dollars from the proceeds would be used to increase pensions, family allowances and other benefits to ensure that pensioners and low income families, especially families with children would be fully compensated for the impact of the tax.

A further point is that the balance of any additional receipts would be directed to giving cuts in income tax to all taxpayers.

Broadly, the income tax cuts would compensate for the extra cost of people's consumer spending if they choose to continue the same consumption pattern.

In practice they may choose to save more.

Finally, the introduction of a Goods and Services Tax would more effectively tax the black economy. The so-called "fiscal dividend" - the money captured from the black economy as tax

cheats spend - cannot be known with any certainty.

But undoubtedly it amounts to some billions.

It would be poetic justice if the black economy was to finance the compensation package for welfare recipients and low income earners.

You could say that not to introduce a Goods and Services Tax is to be the friend of the tax cheats!

SYDNEY 26 June 1991

COMMONWEALTH parliamentary library MICAH