GST increase not being taken to election by Malcolm Turnbull
Prime Minister Malcolm Turnbull has ruled out increasing the goods and services tax (GST).
- Turnbull confirms no longer taking GST increase to election
- All other tax reform options including negative gearing still on table
- Backbencher disquiet over possible negative gearing changes, senator warns
- Shorten's alternative negative gearing policy labelled "unfair"
Mr Turnbull had previously refused to rule out the prospect of an increase, which has been debated since late last year as part of overall tax reform.
Federal Government ministers told the ABC last week that the Coalition had abandoned the idea, but today brought the first confirmation from the Prime Minister.
Mr Turnbull said "the Government will not be taking a proposal to increase the GST to the election".
He said it had been ruled out as the growth dividend would be "somewhere between nil and very small".
"We looked very carefully at several proposals to increase the GST," he said.
"After you take into account all of the compensation that you would need to ensure the change was equitable, it simply is not justified in economic terms."
Treasury had previously modelled eight options for tax reform, three of which included increases to the controversial tax.
The Federal Opposition has been campaigning hard against any potential increase, with Opposition Leader Bill Shorten calling on the Prime Minister to rule out the option earlier this morning.
Backbench concern over any negative gearing change
Mr Turnbull has left all other tax reform options on the table, including changes to negative gearing.
But the possibility the Government will cut tax breaks for property investors in the May budget is creating nervousness on the backbench.
ACT Liberal senator Zed Seselja said "there would be significant concern" among his backbench colleagues if Mr Turnbull changes negative gearing rules.
"We should tread very cautiously in the area of negative gearing," Senator Seselja said.
"If we have a policy that starts to tinker with negative gearing, the potential is even if it's a very sensible policy, even if it's only relatively minor changes, then that will affect confidence as well if both parties are taking that forward."
West Australian Liberal backbencher Ian Goodenough said business people in his electorate raised concerns with him over the weekend about the impact negative gearing changes would have on confidence.
"People who work, save and invest," he said.
Some in the Coalition believe attacking Labor's policy — which would allow new properties to be negatively geared from July 2017 — would be a vote winner and therefore the Government should leave negative gearing alone.
Yesterday, incoming minister Scott Ryan labelled Labor's policy unfair.
"I think we need to be careful to not say everyone who has got into the system now, you can keep your gains but we're going to legislate to stop other people getting into it from a particular date," he said.
"I think there's a fairness question about that."
Welfare advocates are calling for negative gearing to be scrapped altogether.
Australian Council of Social Services (ACOSS) chief executive Cassandra Goldie said negative gearing did not create enough affordable housing stock and should be dumped.
"What we want is to withdraw negative gearing generally across the board into the future, but we provide a tax incentive specifically targeted to construction of new properties," she said.
Source: ABC News