Read The Times Australia

Daily Bulletin

Is Scott Morrison getting ahead of Malcolm Turnbull in the GST debate?

  • Written by: The Conversation Contributor

Scott Morrison has become a true believer in the cause of raising the GST, determined to drive a major switch in the tax mix. The big question is whether Malcolm Turnbull will end up in the same place as his treasurer.

Turnbull is keeping his options open. “Changes to the GST are certainly part of the tax debate and certainly being actively considered by the government,” he said on Friday.

If Turnbull agrees with Morrison, all will be well and good between them.

On the other hand if the Prime Minister eventually opts for caution and doesn’t walk down the GST road, or in the shorter term feels Morrison is getting ahead of the game, that would be awkward for the gung ho minister, who would the need to manage his retreat.

Morrison wants a high profile and he seeks the limelight. But that carries risks.

There is always that salutary tale from Labor days. Paul Keating was passionate about introducing a broad based consumption tax. Bob Hawke let him have his head. But eventually the prime minister pragmatically pulled the rug out from under his treasurer. It wasn’t pretty.

On Monday Morrison made some comments that have raised eyebrows.

Asked at a news conference whether he was disheartened by Newspoll’s finding that 54% oppose a GST rise to 15%, Morrison said: “I have had a bit of experience with this. I remember before the 2013 election turn-backs actually had lower levels of support in the Australian community. It’s important that when you believe that something’s right for the country, that you remain focused on that.” He also made the point about the unpopularity of turn-backs in his radio spot with Ray Hadley.

The comparison is a strange and unlikely one. Some Coalition marginal seat holders might find it rather alarming.

The popularity or unpopularity of the turn-back policy was of little relevance. The public wanted boats and drownings stopped. Centrally, the ordinary person was not going to be affected by turn-backs – in contrast, everyone knows they would be affected by a GST rise to finance income tax cuts.

Compared with selling a hike in the GST, turning back the boats was a doddle.

The other notable thing Morrison said was about economic modelling.

When tax changes are proposed, Treasury modelling is a key feature for ministers drawing up policy. The government says it wants tax reform to promote growth and jobs. So the officials model the effects of various proposals. The exercise is imperfect, and much depends on the assumptions fed in. Still, it is the best way of getting an estimate of the benefits or costs of change.

Yet Morrison was sceptical about modelling when he was asked, in the context of recent modelling commissioned by the Finance Services Council (FSC), about the relative economic merits of a company tax cut versus a personal income tax cut. The FSC modelling highlighted the benefits of a company tax cut in creating jobs, while Morrison concentrates on talking about income tax cuts to counter bracket creep.

Morrison said: “The sad thing about economic models for those who run them is that they’re not perfect and they can’t predict the future and they’re limited by the assumptions they make, and that in particular is an issue with some of the models that really don’t take account of the real boost that personal income tax gives for small businesses who are unincorporated.”

Regardless of the limitations, the government will have to be guided by modelling. Would it gamble on a radical package if the modelling cast doubt on what it would do for growth and jobs?

And when the government’s blueprint is announced, the modelling on which it is based should be available if the plan is to have maximum credibility.

While some of Morrison’s comments are raising questions, NSW Liberal premier Mike Baird and South Australian Labor premier Jay Weatherill continue to be impressive performers on this messy tax reform field.

Baird on Monday produced a compromise plan which, unlike his initial proposal, would give the Commonwealth most of the extra revenue from a 15% GST, at least up to a review in 2020. Only a modest total of $7 billion would go the states to help with health and education spending.

But Morrison continues to take the hard line that the Commonwealth would not have any of the extra GST money used for spending – when surely eventually there would need to be some give-and-take by the government.

Weatherill prefers a package that, while involving a GST increase, would give the states access to a slice of income tax, which has a faster rate of growth than the GST.

The SA premier has called out federal Labor for not facing up to the revenue problem; he says the savings it has identified (many of them tax rises) won’t be enough to cover the massive extra spending that will be needed particularly in health. His stands on both the GST and Labor savings have drawn angry responses from his own side.

The tension between federal Labor and Weatherill is on public display and difficult for Bill Shorten. The story of the evolving relationship between Morrison and Turnbull is unfolding behind the scenes, with its outcome critical but unpredictable.

Authors: The Conversation Contributor

Read more http://theconversation.com/is-scott-morrison-getting-ahead-of-malcolm-turnbull-in-the-gst-debate-53998

Business News

How Businesses Can Prepare for Unexpected Power Outages

Power failures can occur quickly. The supply may be interrupted by bad weather, issues with the electricity network, damaged equipment or local construction work. This can be just a hassle for a fam...

Daily Bulletin - avatar Daily Bulletin

How Chatswood Tutoring Can Fit Into a Student’s Weekly Routine

Create a Predictable Weekly Structure A consistent weekly routine can make study easier to manage when students are balancing several subjects. Chatswood tutoring can provide a fixed learning point a...

Daily Bulletin - avatar Daily Bulletin

The Rise of Digital Marketplaces in the Australian Trade Sector

For decades, the Australian trade and construction sector operated almost entirely on word-of-mouth recommendations and local community networks. Small business owners typically relied on local newspa...

Daily Bulletin - avatar Daily Bulletin

How Immigration Lawyers Can Help

Introduction Visa decisions can shape employment, family life, study plans, travel, and future residence. A small omission can lead to delay, added expense, or refusal. Immigration lawyers assess l...

Daily Bulletin - avatar Daily Bulletin

How Industrial Drying Equipment Supports Efficient Processing

Many industrial processes require moisture to be removed from compressed air, products or process materials before they move to the next stage. Excess moisture can affect equipment performance, produc...

Daily Bulletin - avatar Daily Bulletin

Practical Ways a Whiteboard Can Improve Workplace Communication

Effective communication helps teams stay organised, share ideas and keep track of important information. While digital tools are now common in many workplaces, a whiteboard continues to provide a simp...

Daily Bulletin - avatar Daily Bulletin

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Business Case for Choosing Australian Fabricators Over Imported Alternatives

For a long time, you might have defaulted to overseas suppliers when sourcing fabricated metal components for a project. The unit price was lower on paper, and the maths seemed straightforward. That...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Why Your Dental Clinic Is Not Getting Enough New Patient Bookings From Google

Introduction SEO for Dentist is not just about getting a dental clinic to appear somewhere on Goo...

Low Water Pressure in Sunbury: Is the Problem Inside Your Home or Outside It?

Low water pressure is one of those problems that can send a homeowner in the wrong direction. A we...

4 Beige Rugs for Beautiful and Comfortable Wooden Flooring

Wooden flooring already brings warmth and character to a room, but a beige rug can make that found...

How to Fix Poor Subfloor Ventilation in Older Homes

Older homes have character, but many were built before today's ideas about moisture and airflow were...

Early Engagement on Instagram: What Those First Reactions Really Tell You

The first few hours after an Instagram post goes live are worth paying close attention to. A massi...

Why Preventive Care Matters for Heavy-Duty Equipment

Heavy-duty equipment is designed to operate reliably under demanding conditions and over extended ...

7 Natural Tips to Restore Shine and Softness to Dull Hair

Healthy, lustrous hair often feels like an unattainable dream when you are dealing with dry, brittle...

Buying Property with Someone else? Settle these Questions First

Buying a home with a partner, a sibling or a friend can make a purchase possible that neither of you...

How to Handle a Blocked Drain in Bribie Island Before Starting Deck Repairs

Planning an outdoor upgrade brings excitement, but building a beautiful timber deck requires caref...