Think tank says lift the GST to 15 per cent to pay for big tax cuts

The Grattan Institute says the change would raise about $76 billion a year, but the Opposition says it would hurt families.

Confirmed

The Grattan Institute wants the Goods and Services Tax (GST) to rise from 10 per cent to 15 per cent and to cover all food. The GST is the tax added to most things people buy. In a report released on Monday, the think tank says the change would raise about $76 billion a year. About $33 billion of that would pay for income tax cuts, which Grattan calls "the largest for nearly 20 years". About $25 billion would go to welfare, including bigger JobSeeker, Youth Allowance, Rent Assistance and pension payments. The rest, about $18 billion, would go to the states. Grattan says "the poorest 40% of households would on average be better off". The report also proposes scrapping the special Western Australia GST deal. Shadow Treasurer Tim Wilson is against the idea. "The solution isn't to push people's heads under financial water," he said. The plan is only a proposal. It is not government policy.