GST, Medicare hikes still live options
Changes to the GST and a hike in the Medicare levy are still on the table after a meeting of the nation’s leaders.
Despite opposition from Victoria and Queensland to a NSW proposal to hike the GST rate to 15 per cent from 10 per cent as a way of plugging a hole in future health funding, an historic leaders retreat on Wednesday agreed to keep alive the option.
However, the summit did decide on some other changes, including agreeing to broaden the GST to cover overseas online transactions under $1000 and supporting the Northern Territory’s bid to become a state by mid 2018.
Following Prime Minister Tony Abbott’s leaders retreat with premiers and chief ministers in Sydney yesterday, a formal statement released on Thursday said there was an agreement to refer this issue to a meeting of the country’s treasurers.
All leaders agreed to keep options on the table for future tax reform, including GST and the Medicare levy.
“There was a unanimous commitment among leaders that we need to confront these issues head on and keep an open mind on ways to better fund the needs of our citizens,” the communique said.
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The leaders agreed there was an opportunity to consider more durable revenue arrangements to address growing financial pressures facing all governments.
Any revenue arrangements needed to be fair, efficient and lasting.
“All leaders agreed that the Federation reform process provided a rare opportunity to tackle these issues and that, if we didn’t, Australians would face the risk of declining services in the future,” the communique said.
“Now is the time for an honest and candid conversation with the Australian people about these issues.”
The leaders unanimously agreed to focus reform on health, education, infrastructure and housing.
While Australia had one of the most efficient healthcare systems in the world, it was agreed that health was a top priority for all levels of government with a serious funding challenge made more difficult by an ageing population.
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A new focus on primary care and keeping people out of hospital was necessary, the communique said.
When it came to chronic care, the issue of diabetes, heart disease and mental health required particular attention.
There was also recognition of the need to consider working towards extending Medicare to cover treatments in hospitals based on efficient pricing.
What the leaders decided
* Broaden the GST to cover overseas online transactions under $1000.
* Keep tax changes on the table including increases to the GST rate and the Medicare levy as a way of addressing future shortfalls in health funding.
* Support Northern Territory’s bid to become Australia’s seventh state by July 1, 2018.
* Shift responsibility for vocational education training to the Commonwealth so long as states and territories could elect to remain TAFE providers within a national system.
* Slash duplication between Commonwealth state housing agreements and the federal government’s provision of rental assistance to low-income earners.
* Number-crunch the scale of future funding shortfalls in areas such as health.
