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A teal independent MP representing Australia’s wealthiest electorate has called for an increase in the GST, arguing it would be fairer for young people.
Allegra Spender, who holds the seat in Wentworth, Sydney’s eastern suburbs covering the ultra-exclusive areas of Vaucluse and Point Piper, suggested the 10 per cent rate for goods and services tax is too low .
“I think everything should be on the table: GST should be on the table,” she told ABC Insiders host David Speers on Sunday.
Ms Spender, a first-term MP from a former Liberal constituency, said Australia was too dependent on revenue from income tax to support an aging population, arguing it was unfair to the young population and of working age.
“Young people feel let down by the tax system, by the housing system, and I think the tax system has to play a role in addressing that,” Spender said.
“Let’s have some of this great conversation. »
Allegra Spender, who holds the Wentworth headquarters in Sydney’s eastern suburbs covering the ultra-exclusive areas of Vaucluse and Point Piper, suggested the 10% rate for goods and services tax is too low.
Ms Spender’s suggestion to raise the GST came a week after the Business Council of Australia, the lobby group for millionaire business leaders, called for a consumption tax hike.
However, an increase in the GST would disproportionately hurt the poor, with the level unchanged since its introduction in July 2000, with exemptions for fruit, vegetables and bread.
Ms Spender’s electorate is so wealthy that it includes five of Australia’s top ten postcodes by taxable income, with individual averages above $200,000.
His argument for increasing the GST is based on reducing income tax, which accounts for more than half of federal government revenue.
“I see that our reliance on income tax is a real challenge: it’s at an all-time high,” she said.
“This is because there are fewer and fewer people of working age in the population.”
The Treasury’s intergenerational report, published last week, projects personal income tax revenue to increase from 50.5 percent of total tax revenue in 2022-23 to 58.4 percent by 2062-63.
This forecast includes the third phase of tax cuts which will take effect in July 2024, which will reduce the number of tax brackets from five to four for the first time in four decades, and allow those who earn $200,000 to recover $9,075.
Others have already called for a higher GST to generate more revenue for state government services.
In 2015, South Australia’s former Labor premier, Jay Weatherill, and his New South Wales Liberal counterpart, Mike Baird, advocated an increase in the GST.
Tony Abbott, as Prime Minister, backed their call in July of that year, based on the idea that a higher GST would give the Commonwealth Grants Commission more funds to distribute to states and territories.
But two months later, Malcolm Turnbull, former MP for Wentworth, removed Mr Abbott as Liberal leader.
New Zealand has a tax rate of 15 percent while the UK has an even higher value added tax of 20 percent.
Treasurer Jim Chalmers last week ruled out raising the GST, following the call from the Business Council of Australia.
Dr. Chalmers’ Labor hero Paul Keating won the 1993 election campaign against Liberal leader John Hewson’s plan for a 15 per cent GST.
Dr Hewson was also the MP for Wentworth who drove a Ferrari.
Although she represents Australia’s wealthiest voters, Ms Spender also supports revising the 50 per cent capital gains tax reduction for those selling investment property.
“Capital gains tax should be on the table,” she said.
“These are issues we all need to face and ask ourselves, ‘What are the implications both for some fairness, but also for productivity and for a better functioning economy?’
Ms Spender, a first-term MP with a former Liberal constituency, said Australia was too dependent on revenue from income tax to support an aging population, arguing it was unfair to the young and growing population. working age (pictured are shoppers at Woolworths in Sydney). East)
Australians do not pay capital gains tax where they principally reside, but since September 1999 investors selling rental property have been entitled to a capital gains tax reduction of 50 per cent.
This means that if the value of a home increased by $100,000 while they owned it, only $50,000 would need to be included in their income for that year when filing a tax return.
On retirement income, Ms Spender hinted that she favored the Labor Party’s plan to double the tax rate, from 15 to 30 per cent, for the 80,000 people with more than 3 million super dollars.
“If it was something that said more like, ‘You’re raising the big-sale tax rate,’ that’s something I would support,” she said.
“I’m open to reducing concessions on supers for very big sales, as we need to move to a more equitable system between generations.”
But she has reservations about the federal government’s plans to tax unrealized capital gains.
“The idea of taxing unrealized capital gains is, in my opinion, bad tax policy, to be honest,” she said. “It’s really concerning to me.”
Ms Spender, the daughter of late fashion designer Carla Zampatti, said her wealthy constituents feared their children could not afford a home in a nice part of Sydney.
“A lot of older Australians have said to me, ‘I just don’t know how my children will ever be able to afford accommodation near me,’” she said.
“I had people, just last week, people with good careers and good asset levels saying, ‘It’s not in my interest but I actually think we should be looking at these things. “.”
Ms Spender hosted a tax roundtable in April with former Treasury Secretary and Chairman of the National Australia Bank, Ken Henry.