TAXATION – GOVERNMENT POLICY – AUSTRALIA

Soaring tax load hits workers

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Original article by Dennis Shanahan, Sid Maher
The Australian – Page: 1 & 4 : 16-Feb-16

The Heritage Foundation forecasts that Australia’s tax-to-GDP ratio could potentially rise to 27.5 per cent by 2019. The think tank has warned that this ratio will reach 25.9 per cent unless the Federal Government pursues tax reforms or there is a significant increase in global economic growth. The May 2015 Budget had projected a rise in the tax-to-GDP ratio to just 23.2 per cent by 2019. It had peaked at 24.2 per cent in 2005-06. Treasurer Scott Morrison has signalled that income tax reform remains on the agenda.

CORPORATES
THE HERITAGE FOUNDATION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN COUNCIL OF SOCIAL SERVICE, MINERALS COUNCIL OF AUSTRALIA, AUSTRALIAN LABOR PARTY, IPSOS AUSTRALIA PTY LTD, FAIRFAX MEDIA LIMITED – ASX FXJ, 2GB

Brakes on bracket creep to cost $12.5b

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Original article by Joanna Mather
The Australian Financial Review – Page: 5 : 15-Feb-16

Modelling by the Centre for Independent Studies (CIS) suggests that the cost of winding back "bracket creep" to the 2012-13 level would cost the Australian Government about $A12.5bn in 2017-18. This would rise to $A16.5bn in 2018-19. Andrew Potter of the CIS describes bracket creep as a "stealth tax" and argues that it should be included in any tax reform agenda.

CORPORATES
THE CENTRE FOR INDEPENDENT STUDIES LIMITED, AUSTRALIA. DEPT OF THE TREASURY

‘Big-bang’ tax reform gone

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Original article by David Crowe
The Australian – Page: 1 & 4 : 12-Feb-16

The Australian Government has abandoned plans for large-scale tax reform underpinned by a rise in the GST, although it still wants to reduce personal income tax rates. However, Treasurer Scott Morrison has conceded that tax cuts will have to be much more modest than originally intended. He also said that any reduction in the company tax rate would have to be implemented over several years. Meanwhile, Treasury estimates that economic growth will slow by 0.35 per cent over four years if income taxes are not reduced.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, KPMG AUSTRALIA PTY LTD, AUSTRALIAN LABOR PARTY, BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, INDEPENDENT ECONOMICS, AUSTRALIA. DEPT OF HUMAN SERVICES

Imputation query as company tax cut gives biggest bang

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 10-Feb-16

Prime Minister Malcolm Turnbull has ruled out increasing the GST to finance income tax cuts, after telling Coalition MPs that economic modelling has shown that it would not be economic feasible. The modelling showed that using a higher GST to finance company tax cuts would achieve the greatest economic benefit. Meanwhile, Australian Industry Group CEO officer Innes Willox has proposed reducing the company tax rate from 30 per cent to 20 per cent by scrapping the dividend imputation system.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, THE AUSTRALIAN INDUSTRY GROUP, AUSTRALIA. DEPT OF THE TREASURY, MACQUARIE UNIVERSITY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, COUNCIL OF AUSTRALIAN GOVERNMENTS, NEW SOUTH WALES. DEPT OF PREMIER AND CABINET, NORTHERN TERRITORY. DEPT OF THE CHIEF MINISTER, COUNCIL FOR THE AUSTRALIAN FEDERATION

PM scrambles for a tax policy

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 9-Feb-16

Treasurer Scott Morrison says tax reform will be included in the May 2016 Budget, although the Australian Government has backed down on its proposal to increase the GST. It will instead look at options such changes to superannuation tax concessions and reducing income tax rates via the abolition of tax deductions for work-related expenses. However, Morrison has ruled out making any changes to the negative gearing regime.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN LABOR PARTY, AUSTRALIAN TAXATION OFFICE

Tax options shrink after GST retreat

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Original article by David Crowe
The Australian – Page: 1 & 4 : 8-Feb-16

The Australian Government may be reconsidering its plans to increase the GST, after Prime Minister Malcolm Turnbull suggested that there may be no net benefit from increasing the tax and cutting personal income tax rates. The Government is expected to look at alternatives such as changes to the negative gearing regime for property investors. However, Business Council of Australia CEO Jennifer Westacott says her organisation’s modelling shows that a GST increase that is offset by income tax cuts would be the best to boost the economy.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, BUSINESS COUNCIL OF AUSTRALIA, THE AUSTRALIA INSTITUTE LIMITED, UNIVERSITY OF CANBERRA. NATIONAL CENTRE FOR SOCIAL AND ECONOMIC MODELLING, AUSTRALIA. DEPT OF THE TREASURY

Government losing appetite for GST hike

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Original article by Phillip Coorey, Primrose Riordan
The Australian Financial Review – Page: 3 : 5-Feb-16

Prime Minister Malcolm Turnbull says a push to increase the GST will only proceed if it can be demonstrated to have positive economic effects, such as creating jobs and lifting productivity. Meanwhile, a growing number of Federal Government MPs and senators have reservations about increasing the GST. Liberal Senator Cory Bernardi has vowed to vote against the Government on any bill to increase the tax, while MP Russell Broadbent says the Government has not presented a compelling case for a tax increase.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY

GST pitch just in time for election

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 5 : 2-Feb-16

The Australian Government is believed to favour lifting the GST to 15 per cent without broadening the scope of the tax. However, it is said to be looking at postponing the release of its tax reform package until shortly before the 2016 election rather than timing it to coincide with the Budget in May. The Howard Government adopted a similar strategy in 1999, when it outlined plans to introduce the GST just before the election.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN LABOR PARTY, NEWSPOLL, IPSOS AUSTRALIA PTY LTD, FAIRFAX MEDIA LIMITED – ASX FXJ, NEW SOUTH WALES. DEPT OF PREMIER AND CABINET

$100b GST hike to pay for tax cuts

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Original article by Phillip Coorey, Laura Tingle
The Australian Financial Review – Page: 1 & 4 : 1-Feb-16

The New South Wales Government will make a final push to achieve consensus among the states and territories on changes to the GST. Premier Mike Baird has previously advocated lifting the GST to 15 per cent and spending all proceeds on hospitals, education and compensation for the tax increase. However, he now proposes using the proceeds of the GST increase in the first year to finance corporate and personal income tax cuts, as well as compensation. Meanwhile, $A7bn of GST revenue would be allocated to hospitals and the education system in the three years to 2019-20.

CORPORATES
NEW SOUTH WALES. DEPT OF PREMIER AND CABINET, SOUTH AUSTRALIA. DEPT OF THE PREMIER AND CABINET, COUNCIL OF AUSTRALIAN GOVERNMENTS, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Fresh food may be spared GST by Coalition

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Original article by Phillip Coorey
The Australian Financial Review – Page: 3 : 28-Jan-16

The issue of tax reform and the GST will be on the agenda of federal Cabinet ministers on 28 January 2018. Increasing the GST to 15 per cent is believed to be the Government’s preferred reform option, although the National Party will oppose any push to extend the GST to fresh food due to concerns that it would particularly affect people on low incomes. The Government has already ruled out broadening the scope of the GST to include healthcare and education.

CORPORATES
NATIONAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, SOUTH AUSTRALIA. DEPT OF THE PREMIER AND CABINET