Malcolm Turnbull has killed off the idea of a GST increase for good.
The prime minister confirmed today the government would not be taking a proposal to increase the goods and services tax to this year’s federal election, having reassessed the economic benefits.
“We looked very carefully at several proposals to increase the GST. We had the models and the reality is that you do not get the economic growth dividend that people had assumed there would be. The growth dividend is somewhere between nil and very small,” he said from Queensland today.
“The work we have done demonstrates that the so-called GST tax mix switch does not give you the economic dividend, the growth dividend that would justify doing it. There will be no GST increase taken to the election.”
He also said that the government would consider any changes to negative gearing, which allows investors to write off the costs of income-producing investment assets, in a similar way.
“We will look at these issues, as we did with the GST, very carefully and thoroughly,” he said.
The AFR has more.