Think tank urges Australia to raise GST to 15% and broaden its base
The Grattan Institute recommends lifting the GST to 15% and taxing all food, claiming it would generate $76 billion annually for debt reduction and welfare boosts.
A new Grattan Institute report proposes a major overhaul of Australia’s goods and services tax, raising the rate to 15% and extending it to all food items. The think tank argues the reform would produce $76 billion per year, allowing for a 20% increase in JobSeeker and Youth Allowance, a 50% rise in rent assistance, and a $150-a-week benefit for low-income single-parent families, while higher-income households would pay more.
It also recommends ending the 2018 GST arrangement that guarantees Western Australia a minimum share of the tax pool, a move projected to save $6 billion annually. While several economists back a higher GST, the Labor government says the idea is not on its agenda, and former Liberal treasurer Josh Frydenberg’s similar suggestion was dismissed by party leader Angus Taylor. The institute frames the plan as essential for repairing both state and federal budgets amid a national debt that has topped $1 trillion.
Why it matters
The proposal could reshape Australia’s tax system, affect millions of households, and influence the nation’s ability to manage its growing debt.
How the sides frame it
MODERATE AGREEMENTLeft-leaning coverage highlights the GST hike as a way to fund tax cuts and welfare boosts, center coverage warns that delayed reform is creating a looming fiscal crisis, and right-leaning coverage reports the think-tank proposal with details and notes the Labor government’s lack of interest and political reactions.
LEFT
Frames the GST increase as a necessary step to generate revenue for tax cuts for low- and middle-income workers and to boost welfare payments.
CENTER
Frames the issue as a failure to act on economic reform, warning that procrastination is leading to a fiscal crisis.
RIGHT
Frames the proposal as a think-tank-driven overhaul, detailing the revenue potential and political resistance from the Labor government.
The left emphasises
- GST increase to 15% could generate $76 billion annually
- $33 billion earmarked for income-tax reductions for lower- and middle-income workers
- $25 billion for boosting JobSeeker, pensions and rent assistance
The right emphasises
- GST raise to 15% and extend to all food items
- Revenue would allow a 20% increase in JobSeeker and Youth Allowance, a 50% rise in rent assistance, and a $150-a-week benefit for low-income single-parent families
- Labor government says the idea is not on its agenda; former Liberal treasurer’s similar suggestion was dismissed
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