Can anyone answer some of these questions in relation to what appears an almost certain increase in the GST from 10% to 15% :
1) If the prices of goods/services rises, will not the law of demand hold true and generally, sales will decrease? How will that affect projected revenue raised?
2) If tax payers/families/fixed income recipients/self funded retirees, etc are “fully compensated” (as I’ve heard Scott Morrison say), does that mitigate against (1) above? So, if consumers are fully compensated, where does the extra revenue raised (and given to the States) come from eg. I would think that the extra revenue raised has to come out of consumers back pockets or from company profits?
3) As GST revenue goes to the States/Territories, if the a major component of the “compensation” will be a reduction in income tax rates (which goes to the Federal Government), where does that leave the Federal budget? Will that mean transfer of some or all spending on Health, education, etc, from the Fed’s to the States?
4) Federal Labor’s position and (now Senator) Katy Gallagher: As Chief Minister (now Senator) Katy Gallagher was a strong and vocal supported of increasing the GST (no doubt to help cover the ACTs record Territory budget deficit and the impending b$1 cost of stage 1 of the tram). So, where does that leave Senator Gallagher’s view now that Federal Labor is opposing the GST increase?
5) When Howard introduced the 10% GST, the States were supposed to get rid of State levied taxes such as Stamp Duty. However, this was never enshrined in law, in a written agreement, etc. So, they didn’t. Will this occur again? If it does, where does that leave the up to tripling of Annual Rates by the ACT Government which is supposed to make up for the reduction in Stamp Duties in Canberra – will/can the ACT Gov’t “double dip” ?
I have an overriding fear that the States/Territories will waste the massive revenue generated – again – rather than invest in infrastructure projects and sustainable job creation and in another 10 years or so, it will be “lets increase the GST to 20%”.
I request enlightenment please.