The Howard government struck a deal with the Democrats in 2000 to make fresh food, health and education exempt from Australia's Goods and Services Tax (GST) charges. However, a country Liberal National Party (LNP) member said on Monday that the Abbott government must complete the "unfinished business" that was left outstanding by the turn-of-the-century agreement. For LNP Member of Parliament (MP), Dan Tehan, this meant "broadening the GST" and eliminating "intellectually lazy" tax exemptions.
Described by the Sydney Morning Herald as "popular", Mr Tehan's viewpoint emerged in an opinion piece for Fairfax Media's Australian Financial Review on Monday. The article also allowed the MP to show that his argument was not confined to honoring the legacy of former Howard-government treasurer, Peter Costello. He explained that, without the introduction of the measure, "a bound and broken Australia" will be "inherited by the nation's children".
According to Mr Tehan, a removal of the exemptions can generate an annual total of A$22 billion that would facilitate a reduction of income and business taxes.
While the prime minister said that he does not have a problem with the discussion of such issues among his colleagues, Tony Abbott conclusively told the media on Tuesday that a broadened GST base will not be introduced during his first term as Australia's leader.
Speaking to reporters while still in the Middle East, the PM made it clear that the nation's tax laws "simply cannot change unless all of the states and territories, including the Labor states and territories, agree and there is a consensus in the Parliament and it won't change in this term of Parliament."
Meanwhile, Assistant Treasurer Josh Frydenberg continues with his investigation into the possibility of closing a GST loophole that makes online goods bought overseas GST-exempt, if their value is under $1000. Liberal Senator Cory Bernardi said that he was "just disappointed" at any kind of revisitation of GST legislation, and instead shone the spotlight upon the excessive size of government across the country.