The Guardian February 16, 2000


Out with the GST

In a Press statement issued on Monday this week, the Communist Party of 
Australia called on the ALP to pledge to repeal the GST legislation when 
next elected.

"Nothing short of the complete repeal of the GST will overcome the huge 
robbery of low-income earners, pensioners and others", said CPA General 
Secretary, Peter Symon. "Many will be forced into poverty", he said.

"The CPA supports trade union demands for wage increases to compensate for 
the inevitable increase in prices that will be brought about by the GST.

"We reject the claims of Ted Evans, Treasurer Secretary, and Ian 
Macfarlane, Governor of the Reserve Bank, that wage claims are unjustified 
and could jeopardise the economy", said Mr Symon.

The problems arising from the GST are becoming clearer every day  the 
inevitable price rises, the unfairness of a GST on many items, the huge 
compliance costs imposed on businesses (which will be passed on to 
consumers) and on organisations are only some of the immediately apparent 
problems.

"The claim by John Howard and Peter Costello that the GST is a `fairer' tax 
system is completely dishonest as is the claim that a `typical' family will 
be $40 to $50 better off. This is obvious nonsense", said Peter Symon. "The 
Government's arithmetic does not add up."

The hard reality is that low-income earners spend almost all of their 
income on goods and services whereas those of higher incomes pay a much 
smaller proportion of their income on such purchases. Those with lower 
incomes will pay proportionately much more in taxes. 

In calling for the repeal of the GST legislation the CPA suggests 
principles for an alternative tax system which should include:

(a) termination of any form of a general goods and services tax while 
recognising the justification for special taxes on luxury items;

(b) restructuring of the tax system to ensure that those with high incomes, 
with unearned income from share dealings, company profits and property 
speculation, pay higher taxes while taxes on wages and salaries are 
proportionately reduced;

(c) closure of corporate tax avoidance loopholes;

(d) levying of normal taxes on profits earned in Australia but sent 
overseas;

(e) an end to government handouts to the wealthy corporations in the form 
of direct grants and tax concessions;

(f) maintenance and support for publicly owned enterprises;

(g) a crackdown on family trusts which are used by high-income earners to 
avoid tax; and

(h) raising the tax-free threshold from $5,400 to $13,000 ($250 per week).

"There is no such thing as a fair GST", concluded Mr Symon.

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