Feds and opposition agree: GST must be left alone
Australian politicians are in agreement that the country's good and services tax (GST) should be left untouched following recommendations made by the International Monetary Fund (IMF) on its report made public on Wednesday that calls for the further strengthening of consumer-based taxes.
The IMF argued that such tax measures were more stable source of federal income but Federal Treasurer Wayne Swan quickly shot down the idea on Thursday as he declared that despite the IMF report, "the government will not be changing the GST arrangement at all."
Prime Minister Julia Gillard echoed Mr Swan's sentiments when she told reporters in Canberra that the government is not bent on changing it tax policy soon and "we have ruled out increasing the GST," which was supported by Labor Senator Doug Cameron by saying that tinkering with the 10-year-old tax would be foolishness.
And the federal government found an ally in the opposition as Liberals head Tony Abbot flatly rejected the idea and instead exhorted the Labor-led government to simply resort to expenditure cuts as he told ABC that "the government should work harder and more quickly to try and get us back into surplus."
Mr Abbot, however, said that IMF's observations that the government's proposed mining tax must be extended to other minerals apart from its coverage of coal and iron ore explicitly pointed to the flawed fiscal policy of the government in achieving budget surplus goals.
On his part, Mr Swan said that while the IMF report may have contained some suggestions that Australia cannot heed at this time, he stressed that it generally highlighted the sound economic management that the government has been dispensing so far.
He said that the report heaped praises on the way Australia dodged recession during the global financial crisis, which emboldened Prime Minister Gillard to declare that the country should be encouraged by IMF's good words and commence building on its economic strengths by further investments on skills, infrastructure, the NBN, increasing savings and implementing MRRT.
However, Nationals Senator Barnaby Joyce still maintained that the mining tax was already a bad idea and expanding or implementing it would only make it worse as he noted that the Labor-led government must be reminded that the IMF report did not wholly redeemed their poor economic track record.
Senator Joyce said that Australians must be adequately informed that budget surplus would not necessarily lead to lower debts as he stressed that "our debt is racing ahead and we're becoming totally reliant on mining."