GST increase : a surrogate debate.

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Peter Whiting. 

The Refugee Action Collective organised a march and protest on Saturday 2 April 2011 against children in immigration detention outside the Melbourne Immigration Transit Accommodation at Camp Road, Broadmeadows.  Despite Labor's October announcement that all children would be released from detention, there are still more than 1,000 children locked up including more than 140 young asylum seekers from the ages of 13-18 are detained in the Melbourne Immigration Transit Accommodation at Camp Road, Broadmeadows.
Free the children – Refugee Children in Immigration Detention Protest Broadmeadows Takver, flickr cc.

Unusually, Australian politicians seem to agree that taxation reform is necessary, in order to generate the revenues required for sound budgetary outcomes, achieve an efficient taxation system at State and Federal levels, and increase international economic competitiveness.

Agreement stops there, however; deep divisions about the ‘how’ of reform are apparent within and between parties, as well as between the States themselves .

While only one of a number of proposals before the Federal Government, the prospect of an increase in the GST to 15% is currently making headlines.

Those opposing the increase cite three main streams of argument :

  • The focus should be on reduced spending
  • An increase in GST is heavily regressive, impacting most severely those at the low end of the economic scale, and hence requiring design of complex and potentially inadequate forms of offsetting transfer payments
  • Other avenues for redressing the budget problem should have preference, particularly those which benefit those already relatively well off (negative gearing, superannuation benefits, capital gains, etc).

As the grounds for opposing the increase imply, the GST debate, as it presently stands at least, is really a surrogate debate bypassing the wide debate about now entrenched and worsening social and economic inequity in Australia. The lucky country, with ‘plenty for all’ and commitment to a ‘fair go for all’, seems to be no more.

Data presented at a roundtable in Canberra in January 2014 showed the wealthiest 20 percent of households in Australia now account for 61 percent of total household net worth, whereas the poorest 20 percent account for just 1 percent of the total. In recent decades, the income share of the top 1 percent has doubled, while at the same time poverty is increasing, and many of those dependent upon government benefits, including the unemployment benefit, have fallen well below the poverty line.*

There are myriad reasons for this, of course, but undoubtedly the neoliberal economic policies applied at Australian and global levels have been very influential. In Australia, tax cuts have disproportionately favoured the rich, and globalisation has in many cases been detrimental to those at the low levels of the economic ladder.

In this newsletter, Brian Lawrence in his article, The economic foundations of family life are being undermined: rumblings beneath, points to the failure of the Australian wages system to maintain the relative value of minimum wages.

Refugees & social equity

Not only are we failing those Australians who lack the economic power and voice to present their needs, it seems we are also deaf (and arguably blind, too) to the needs of those who seek out Australia as a refuge from a harsh world of war and oppression. John Menadue, in his article, What has happened to the 11,990 Syrian refugees?, contrasts unfavourably Australia’s response to the Syrian refugee crisis to that of Canada. He concludes that the Australia which was concerned about equity of opportunity and valued the humanitarian tradition of shared responsibility to help displaced and persecuted people is surrendering its proud tradition. In his article concerning the plight of refugees in Australia, Australia’s moral crisis: shipping babies and families off to Nauru, Bruce Duncan not only decries the loss of our humanitarian tradition, but also calls for an end to this moral blight on the reputation of our country.

Yes, we need to be involved in the GST debate and in the question of broad taxation reform. But critically, Australians need a national conversation about the inequality fostered by our current policies. We need a system of taxation and redistributive transfer payments which enables those on low economic rungs not only to live above the poverty level, but also to access services and opportunities to prosper.

We need policies relating to refugees and asylum seekers which balance the need for border controls with the recognition that, as Australians, we have the opportunity and responsibility to offer a humane and caring environment. We all need to recognise that our policies not only impact on us as individuals, whether wealthy or struggling, but they also impact on our society and on our culture. If our political leaders are to act to bring about these ends, then they need unequivocally to hear that conversation calling for a return to equitable and humane values.

During 2016, Social Policy Connections will continue to be one of many voices calling for an informed debate about what society Australia seeks to be, as well as a resource for those who would share our view that Australia can and should be a light of care and responsibility to those who, through no fault of their own, find themselves displaced or in poverty. At Social Policy Connections, we continue to advocate not only for equity in these social issues, but also in our role in the world community, particularly in the climate-induced problems facing the globe.

Advance Australia Fair? What to do about growing  inequality in Australia. Report following a roundtable held at Parliament House Canberra in January 2014, Bob Douglas, Sharon Friel, Richard Denniss, and David Morawetz. Published May 2014 by Australia21 in collaboration with The Australia Institute.


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