If your thought Abbotts week couldn't get any worse ,We get the truth for the Libs big new Tax on everything ,well it was his mentor Howard who first brought the thing in.
Nick Minchin: “The GST, in terms of its rate and its scope, will have to be revisited in the medium term.” Photo: David Mariuz
Gemma Daley and Jacob Greber
Australia’s longest-serving finance minister, Liberal Nick Minchin, said the federal government had to look at increasing the GST rate or broadening its base in the next decade to deal with a long run of budget deficits that will make the central bank’s job tougher.
Mr Minchin, who was one of the architects of the 10?per cent GST, also said spending should be cut as part of a five to ten year medium-term fiscal strategy to deal with “huge” structural problems and a looming funding crisis.
“The GST, in terms of its rate and its scope, will have to be revisited in the medium term,” Mr Minchin told the AFR Weekend on Friday. “It’s unavoidable in terms of a revenue side and a consumption tax is the best way to address the revenue problem.”
Mr Minchin said the fiscal outlook was at a “critical” level, and the aid budget and health expenditure needed to be urgently reviewed.
“The aid budget needs to be frozen immediately and health expenditure is the major problem for federal and state governments because it is demand driven. Most Commonwealth programs have a cap and when the money runs out it runs out – health is immune to that and it is just unsustainable.”
Mr Minchin’s intervention – which flies in the face of Labor and Coalition refusals to look at the GST – came as Labor faced new doubts about its budget position.
A report commissioned by the Minerals Council of Australia warns of a “large structural hole” that needed a $14?billion cut in spending or an unprecedented period of fiscal restraint to be avoided.
