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Cost-of-living relief for millions of Aussies

A call for Australians to be slapped with an increase in the goods and services tax in the midst of a cost-of-living crisis has been promptly rejected. Picture: NCA NewsWire/Tertius Pickard

A call for Australians to be slapped with an increase in the goods and services tax in the midst of a cost-of-living crisis has been promptly rejected.

Treasurer Jim Chalmers slammed the door shut on the proposal from the Business Council of Australia included in the group’s Seize the Moment report.

“We don’t have any plans or intention to change the rate of the GST,” he told reporters in Canberra on Monday.

“When it comes to tax reform, we made it very clear … across two budgets, we think the most fertile ground for tax reform is multinationals, high balance superannuation, compliance, cigarettes and the petroleum rent resource tax legislation (PRRT).”

The BCA report called for the government to undertake a wholesale review of the tax system, and said indirect taxes, such as the GST, should do more heavy lifting.

Stamp duty should also be abolished in favour of land tax and a more competitive company tax rate should be applied, the lobby group said.

Dr Chalmers rejected the BCA call but welcome its overall contribution. Picture: NCA NewsWire / Martin Ollman

The report argued that unless substantial changes are made to the economy, Australians’ living standards will be eroded and the nation will be left behind by competitors.

Its release comes ahead of the release of the sixth Intergenerational Report (IGR) on Thursday, which is expected to show Australia’s population will swell to 40m, while the number of people over 65 is set to double. The number of Australians over 85 will triple.

In turn, Australians will be having fewer children, reducing the income tax pool at a time when government will be expected to spend more on aged care and support services.

Since taking control of the government’s purse strings last year Dr Chalmers has been eager to open a series of “conversations” about tax reform in the name of budget sustainability.

Ahead of the October 2022 budget, he opened up about the stage three tax cuts (before being shut down by the Prime Minister). More recently, it was about changes to super tax concessions.

AUSTRALIA - NewsWire Photos - General view editorial generic stock photo of Australian cash money currency. Picture: NCA NewsWire / Nicholas Eagar
Dr Chalmers remained coy on what further tax changes could be eyed off down the line. Picture: NCA NewsWire / Nicholas Eagar

When asked, at the halfway point of the parliamentary term, what other reforms he was considering ahead of the next election, the Treasurer remained coy.

“Our focus is bearing down the changes … that we announced in the May budget,” Dr Chalmers said.

“We’ve indicated a willingness going forward to make difficult decisions where … necessary to make sure that we can fund the kinds of services in particular that Australians need and deserve as our society changes and evolves.”

But he claimed Australians were “ready” for the government to “take the big issues seriously”.

The first draft of the PRRT changes, which is touted to raise $2.4bn over four years by capping tax offsets at 90 per cent of assessable income, was also released on Monday.

Dr Chalmers framed the release a test for the Coalition and the Greens. The minor party has already indicated it would push for the amount raised under the reforms to be doubled.

“If the Greens want the industry to pay more tax sooner, then they will vote for that legislation and if the Coalition wants a model that best safeguards international relationships, and they will vote for it as well,” he said.