Victorian Premier Steve Bracks today demonstrated ignorance of tax reform with a series of gaffes when he attempted to attack Coalition tax policy on Melbourne radio.
1. Mr Bracks claimed "I believe theyll be paying more tax and Ill tell you why: because there is embedded tax in the chain as you work along."
This is completely wrong. There is no embedded tax with GST. Business gets an input tax credit for any tax paid on inputs.
What Mr Bracks was actually describing was the present Labor system of wholesale sales tax where inputs are taxed with no credit system.
2. Mr Bracks claim of paying more tax is completely wrong. Overall after income tax cuts, abolition of wholesale sales tax, abolition of other indirect tax, increases in pensions and allowances, Government revenues fall by about $6 billion.
Mr Bracks should seek urgent briefings from his Treasury officials before making any further comment.
3. Mr Bracks makes the astounding claim that "Its questionable whether the States will get a growth out of this." This is a 10 per cent tax on goods and services. The value of goods and services grows as the economy grows. GST, is by definition, a growth tax which the States have long fought for.
And another thing
Maybe at Davos Mr Bracks could ask for a show of hands from those countries that, like the Labor Party, want a wholesale sales tax in preference to a Value Added Tax.
He could report back to Victorians on his findings.