'No easy paths': why calls grow for a GST hike

A respected research group, the Grattan Institute, has proposed raising the Goods and Services Tax (GST) in Australia to 15% and expanding it to cover all food items. This move aims to address the country's growing national debt, currently exceeding $1 trillion. The proposed tax overhaul would generate an additional $76 billion annually, which could be used to lower taxes for low-and-middle-income earners and boost welfare payments.

The institute's lead author, Aruna Sathanapally, emphasized the need for this reform to stabilize both state and federal budgets. The higher income from the additional tax would allow for an increase of 20% in JobSeeker and Youth Allowance benefits, along with a 50% rise in rent assistance to offset the increased GST costs. Despite some opposition, such as from former Liberal treasurer Josh Frydenberg, several prominent economists support the proposed changes.

However, Prime Minister Anthony Albanese has pledged to maintain the current GST deal with Western Australia, a stance deemed "perverse" by the commission report. Critics argue that scrapping this deal would save $6 billion per year.