HomeNewsTeal politician Allegra Spender from Australia's richest electorate calls for higher GST...

Teal politician Allegra Spender from Australia’s richest electorate calls for higher GST so income tax can be reduced


A teal independent MP representing Australia’s richest electorate has called for an increase in the GST – arguing it would be fairer on the young.

Allegra Spender, who holds the Sydney eastern suburbs seat of Wentworth covering ultra-exclusive Vaucluse and Point Piper, has suggested the 10 per cent rate for the Goods and Services Tax is too low.

‘I believe that everything should be on the table: GST should be on the table,’ she told ABC Insiders host David Speers on Sunday.

Ms Spender, a first-term MP holding a former Liberal electorate, said Australia was too reliant on raising revenue from income taxes to support an ageing population, arguing this was unfair on the young, working-age population.

‘Young people are feeling abandoned by the tax system, by the housing system, and I think the tax system has to play a part in addressing that,’ Ms Spender said.

‘Let’s have some of that big conversation.’

Allegra Spender, who holds the Sydney eastern suburbs seat of Wentworth covering ultra-exclusive Vaucluse and Point Piper, has suggested the 10 per cent rate for the Goods and Services Tax is too low

Allegra Spender, who holds the Sydney eastern suburbs seat of Wentworth covering ultra-exclusive Vaucluse and Point Piper, has suggested the 10 per cent rate for the Goods and Services Tax is too low

Ms Spender’s suggestion of increasing the GST has been made a week after the Business Council of Australia, the lobby group for millionaire chief executives, called a higher consumption tax.

However, increasing the GST would disproportionately hurt the poor, with the level unchanged since it debuted in July 2000, with exemptions for fresh food and bread.

Ms Spender’s electorate is so wealthy that it includes five of Australia’s top ten postcodes for taxable incomes, average taxable incomes are north of $200,000. 

Her argument about raising the GST is based on reducing income taxes, which makes up more than half of federal government revenue.

‘I see there’s a real challenge on our reliance on income tax – it’s at a historical high,’ she said. 

‘That is on the basis of fewer and fewer working age people being in the population.’ 

Treasury’s Intergenerational Report, released last week, forecast personal income tax receipts growing from 50.5 per cent of total tax receipts in 2022–23 to 58.4 per cent by 2062–63.

That forecast includes the stage three tax cuts coming into effect in July 2024, that will reduce the number of tax brackets from five to four for the first time in four decades, and see those on $200,000 get back $9,075. 

Others have previously called for a higher GST to raise more revenue for state government services.

In 2015, former South Australian Labor premier Jay Weatherill and his New South Wales Liberal counterpart Mike Baird advocated an increase to the GST.

Tony Abbott, as prime minister, backed their call in July of that year, based on the idea that a higher GST would give the Commonwealth Grants Commission more funds to distribute to the states and territories.

But two months later, Malcolm Turnbull, a former member for Wentworth, deposed Mr Abbott as Liberal leader.

New Zealand has a 15 per cent rate while the UK has an even higher 20 per cent Value Added Tax.

Treasurer Jim Chalmers last week ruled out increasing the GST, following that call from the Business Council of Australia.

Dr Chalmers’ Labor hero Paul Keating won the 1993 election campaigning against Liberal leader John Hewson’s plan for a 15 per cent GST.

Dr Hewson was also the member for Wentworth who famously drove a Ferrari. 

Despite representing Australia’s wealthiest constituents, Ms Spender is also in favour of reviewing the 50 per cent capital gains tax discount for those who sell an investment property.

‘Capital gains tax should be on the table,’ she said. 

‘These are issues that we all have to face and say, “What are the implications both for sort of fairness but also for productivity and making the economy run better?”.

Ms Spender, a first-term MP holding a former Liberal electorate, said Australia was too reliant on raising revenue from income taxes to support an ageing population, arguing this was unfair on the young, working-age population (pictured are Woolworths shoppers in Sydney's east)

Ms Spender, a first-term MP holding a former Liberal electorate, said Australia was too reliant on raising revenue from income taxes to support an ageing population, arguing this was unfair on the young, working-age population (pictured are Woolworths shoppers in Sydney’s east)

Australians don’t pay capital gains on their principal place of residence but since September 1999, investors selling a rental property have been entitled to a 50 per cent capital gains tax discount. 

That means that if a house went up in value by $100,000 during the time they owned it, only $50,000 would have to be included in their income for that year when filing a tax return. 

On retirement incomes, Ms Spender hinted she was leaning towards favouring Labor’s plan to double the tax rate, to 30 per cent from 15 per cent, for the 80,000 individuals with more than $3million in super.

‘If it was something that was much more saying, “You’re increasing the tax rate of big balances”, that’s something I would support,’ she said.

‘I’m open to reducing concessions on super for very big balances because we need to move to a system, where it’s more equitable between the generations.’

But she has reservations about the federal government’s plans to tax unrealised capital gains.

‘The idea of taxing unrealised capital gains, I think, is bad tax policy to be honest,’ she said. ‘It’s really concerning to me.’

Ms Spender, the daughter of the late fashion designer Carla Zampatti, said wealthy people in her electorate were worried their children would not be able to afford a house in a nice part of Sydney.

‘I had a lot of older Australians who say, “I just don’t know how my kids are ever going to be able to afford a home over live near me”,’ she said.

‘I’ve had people, just last week, people in good careers with good levels of assets who said, “It’s not in my interest but I actually believe we should look at these things”.’ 

Ms Spender in April convened a tax roundtable with former Treasury secretary and National Australia Bank chairman Ken Henry.



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