The Bastard No-one Would Claim


The love-child Howard was never prepared to acknowledge in his budgets will finally find its place this May.

The ALP has always called the GST a bastard. But it will nevertheless take full account – and advantage – of it in the budget that the new Treasurer Wayne Swan will table in Parliament in May.

It can’t afford not to. Although it is not yet a teenager, the GST is already bringing in big bucks. It will drag more than $43 billion into the Federal Treasury’s vaults this financial year – and the Treasury expects it to raise almost $46 billion next financial year.

Howard had long been in denial about the GST, which he once famously said would "never, ever" be born. But it was, soon after the 1996 election which brought Howard to power.

Both Howard and his Treasurer, Peter Costello, kept the GST out of their budget books. They tried to justify that by saying it was a State tax, as the States got the money.

Better book-keepers, including the Auditor General Ian McPhee and the Australian Statistician, Brian Pink, have never accepted that.

Their message has been simple: the GST is a Commonwealth tax, because the Commonwealth collects it.

The new Rudd Government agrees, and wants to keep a straight set of budget books, so the GST will be fully accounted for in its first budget.

However, Labor was right when it first opposed the GST all those years ago, describing it as a thoroughly regressive tax. That hasn’t changed

The GST is levied, for example, on every pair of nylon socks that a family in Campbelltown buys at their local chain store.

But the silk stockings that a Vaucluse lawyer might buy his lady love while on an expensive holiday in Paris, effectively won’t be taxed.

Those sheer delights would, of course attract the European equivalent of the GST. But, as a foreign visitor, the lucky lady would be entitled to claim that tax back, under the European Union’s de-tax system as she leaves the country.

That’s how the rich get richer and the poor get poorer in the 21st Century.

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