The GST was indeed the mother of all taxes and it ended up being inequitable in terms of its impact as it was the lower incomes that suffered the biggest effect of it in relative terms of their income as essentials were largely included in the calculation so the cost of ordinary living went up. It raised an extraordinary amount of money as the black economy came into the real economy, far more than expected.
I worry that the carbon tax will replicate it, as all the costs of living will increase due to the levies put on primary production. The australian economy is still largely built around discretionary spending, and indeed services make up something like 40% of GDP. So we have room to cut back, but its obviously going to be incredibly painful for Australians particularly on lower incomes as they will be cutting back all the luxuries they have become accustomed to. And it doesnt matter how much compensation and fiddling Labor do with the carbon economy, pain will be felt. And the electorate will not forgive them for it.
Gillard has to take this issue to an election or be judged as the worst prime minister of this countrys history.
