Editorial: Back from the dead
Back from the dead
Rather like something unspeakable in a Hollywood horror movie, the goods and services tax has once again risen from the dead. Speaking on the Channel 9 Sunday program on November 9, Prime Minister John Howard renewed his pledge to go to the next federal election campaigning for a GST.
This doesn't mean, of course, that Howard will even mention a GST during the campaign — merely that, if re-elected, he will claim a "mandate" to introduce one. It seems more likely that the Coalition will try to campaign on restricting property rights solely on the basis of skin colour, and on its demand not to be called "racist" for doing so.
What is it that explains the multiple lives of the GST? It is universally regarded as the chief cause of John Hewson's defeat in the 1993 federal election. For three years thereafter, the Liberals — and none more loudly than John Howard — proclaimed the GST ancient history, dead, buried, with a stake through its heart. In the 1996 campaign, Howard renounced the GST so frequently and fervently that his pledge not to introduce one in his first term is almost the only promise he hasn't had the nerve to break yet.
But no sooner had the votes been counted than the establishment media and government politicians discovered a public demand and a burning need for a GST.
Both those claims are lies. The GST is still about as popular as a dead cat, although the liars hope to sell it to the gullible by calling it "tax reform". This is why Howard hasn't dared to break his 1996 promise, and why the ALP has publicly opposed a GST.
The supposed "need" for a GST relies on one or both of two arguments: that the government's tax revenue needs to be increased, and that existing taxes are unfair or inefficient compared to a GST.
The reality is that the Labor federal government created the tax shortfall by massively reducing taxes on the rich: cutting company tax and the marginal tax rate for the highest income brackets. Only part of the loss was recouped by allowing inflation to push middle and better paid workers into higher marginal brackets.
If the aim were really to restore government revenue and do it more fairly, the government could simply restore the pre-1983 income and company tax rates (indexed for inflation).
But that isn't the aim. The aim is to further benefit the wealthy by further shifting taxes onto ordinary working people and the poor. Howard himself acknowledged as much when he spoke a little too honestly on Sunday, saying that he was aiming for a tax "reform" package "which is fair, delivers significant personal income tax cuts and is seen as taking Australian business into the 21st century".
"Fair" here was just hot air. "Income tax cuts" means more "incentives" for executives with multimillion-dollar packages. And what "Australian business" wants in the 21st century — and what Howard intends to give it — is 19th century taxation policies.
That explains why the GST keeps returning from the dead: business wants it. It doesn't matter how often the public says "no" to it, if business is saying "yes". (The ALP's equal devotion to the demands of business mean its present opposition to a GST can be quickly forgotten when it returns to government.)
If nothing else, this should serve as a lesson in the nature of Australian democracy: it's the system in which, every three or four years, the people are allowed to choose the rulers who will carry out the policies the people oppose.