The Abbott government has dismissed calls from Treasury secretary Martin Parkinson to consider raising taxes to get the budget out of trouble, including lifting the rate of the GST.
Treasurer Joe Hockey's office on Thursday rejected the suggestion that the government would raise the GST to plug holes in the budget.
“We are not changing the GST – full stop, end of story,” a spokeswoman for Mr Hockey said. “Our position hasn’t changed.”
Treasurer Joe Hockey has rejected a call from Treasury Secretary Martin Parkinson to raise the GST. Photo: Alex Ellinghausen
“In this speech the Treasury secretary is expressing his own personal views on the budget and the economy. Secretary Parkinson last night outlined the challenges the Australian economy and the budget will face over the next decade.
“These challenges include dealing with Labor’s legacy of $123 billion of deficits over the next four years and debt rising to $667 billion in a decade unless action is taken.”
Foreign Minister Julie Bishop was also asked on Thursday whether Dr Parkinson's advice to lift the rate of the GST was a conversation Australians needed to have.
“We're not changing the GST,” Ms Bishop replied to the ABC interviewer.
“Our promise at the last election was that there'd be no increase to the GST and that remains our position.”
Ms Bishop has been campaigning in Western Australia for this weekend’s re-run of the Senate election. The Coalition is hoping to win three Senate seats as it did in the original count before the result was declared void by the High Court because the Australian Electoral Commission admitted losing more than 1300 ballot papers.
Any hint that the Coalition would raise the GST would be seized upon by Labor in the final days leading up to Saturday’s poll.
Neither side of politics is keen to talk about new taxes. Shadow treasurer Chris Bowen told ABC Radio on Thursday he had “reached a different conclusion” to Dr Parkinson on the subject of the GST. Mr Bowen said Labor’s view was that raising the GST would be “regressive” and would unfairly harm low-income earners.
Ms Bishop refused to engage at all in a discussion about the government’s problems in raising enough revenue to return the budget to surplus. In her ABC interview on Thursday the Foreign Minister ignored entirely the subject of taxes and would only discuss the Coalition’s plans to cut government spending.
“What we're going to do is make some hard decisions over government spending,” Ms Bishop said. “It was out of control under the former government. We're determined to be a government that lives within its means.”
“Certainly,” the interviewer replied. “But you have two ways of going about restoring a budget surplus - that is to cut spending and to lift taxes. Are you looking at lifting taxes?”
“We're not a government that believes in higher taxes,” Ms Bishop said.
“We believe in lower taxes and I know Joe Hockey and the team are working very hard to cut out the unnecessary wasteful government spending that we've seen over the past six years under Labor.”