Is a GST hike the right thing for Australia’s retirees? 316



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Bill Shorten is out in the news this morning talking about how a GST hike would not be good for Australia.   He is taking an opinionated line on what is set to become Turnbull’s next battle ground  as we head towards a pre-election Federal Budget in 2016.    Some are suggesting that Turnbull will go to the polls seeking a GST hike mandate, for the good of Australia.  One wonders what will happen to the retirees and pensioners in the process, and whether you’ll feel supported or stripped by the change.  In fact I propose that the impact on older generations could become the biggest issue for the raising of the GST.  And no one is talking about it yet.

New Corp and AAP reported yesterday that the Government is considering raising the GST to 15 percent, offering tax cuts to middle income earners in our economy and keeping fresh food GST free.

“I think it’s the wrong idea for confidence, for families trying to make ends meet,” Mr Shorten said.  Families is all he could talk about on this subject matter.  Are retirees still invisible?  Families are easily ameliorated with tax cuts in the middle brackets, retirees on the other hand are living off their sole remaining monies.  Tax cuts don’t help.

And no one is yet talking about the potential impact of this.

It is all well and good to introduce a consumption tax and cut the tax rates on working Australians who earn money by going to work.  But what for those who have no ability to do this anymore and are reliant on their own savings or the pension to fund their longevity?  Will we raise the pension?

The idea of the GST being raised is not a new one.  It has been around for some time now.

The Henry Tax Review back in Rudd’s days gave out a long list of suggested tax reforms.  And whilst it never used the letters GST in writing, it referred heavily to the taxing of consumption rather than income as a future priority.

Hockey, Abbott and Turnbull have all gone back to the numbers in the recent months, trying to find two dimes with which to make our country tick now we don’t have a strong mining industry and made a surprising discovery, a GST is the most efficient way to grow the taxation pie.  But is it a fair one?  And can they make it such?

Fairness is a massive question for the over 60s as the GST comes to the front of political discussions.  Will the Government, any government that brings in a GST offset the impact on retirees and pensioners through increases to pensions and benefits and support for self managed retirees who have no ability to grow their pie bigger after they leave the workforce.

Does that mean we shouldn’t increase the GST?

That comes down to whether you think the potential economic gain from a GST is likely to hurt the older generations or be offset in a considerate manner.  


Rebecca Wilson

Rebecca Wilson is the founder and publisher of Starts at Sixty. The daughter of two baby boomers, she has built the online community for over 60s by listening carefully to the issues and seeking out answers, insights and information for over 60s throughout Australia. Rebecca is an experienced marketer, a trained journalist and has a degree in politics. A mother of 3, she passionately facilitates and leads our over 60s community, bringing the community opinions, needs and interests to the fore and making Starts at Sixty a fun place to be.

  1. All the pollies are missing the point …… there is a lot of votes in the over 60s.

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    • Sadly there are also a lot of over 60’s who mindlessly follow the LNP & would vote for them no matter how bad their policies

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      • You are so right Deanna! It has always been that the over 60’s tend to vote Liberal. Perhaps we become more conservative the older we get but it’s so damned shortsighted as we should all know that the social policies that benefit us over 60’s are far more likely to come from the Labor Party.

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        • Well I am over sixty and you oud never get me voting for the Liberal party

  2. No putting GST at 15% while we have corporations avoiding tax is so wrong and while we the people have to pay out regardless this increase gives these corporations even greater tax breakers. It’s only increasing the profits for large corporations thanks to Howard

  3. This will affect low income earners and anyone on any type of benefit, even if they exempt it from fresh food, our supermarket bills will go up, because we all need items like toilet rolls and cleaning products. Electrical items like Fridges need replacing with time, that make make it hard for pensioners to replace broken items because it will cost more

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    • Meanwhile, business owners can reclaim all their GST even on personal products for their own homes (which is obviously illegal). The GST is effectively a tax on the poor… 🙁

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      • As a As a small business owner over 60 I have to state that you are wrong Rex, the GST is a huge imposition on small business. I have to pay between $2000 – $3000 a quarter to the government in GST, which pre 2000 did not have to be paid, plus I now have to hire a bookkeeper for 4 hours a week, which pre- 2000 I did all by myself. Sure we claim back the GST we have paid, but we have to charge and pay GST to the ATO on all of the the goods that we sell. The GST is simply a tax on profits over and above the income tax, which did not exist pre- 2000. I thought that I could retire before 65, but GST and the GFC, which caused me to withdraw all of my super in order to keep the business afloat, put paid to all that and as things currently stand I shall be working until at least 73, if I live that long.

  4. I have been saying for 2 years that the GST has to go up to 15%. We have to increase our revenue some how or the many baby boomers will not be getting pensions… is the best idea to come from the LNP since elected. It is only 5% more than we are paying now…..pensions go up twice a year and a lot of aged at the moment have supers to live off. I do not see it will be a problem.

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    • But the gov’t has linked gst rises to tax cuts for the better off – how does that relate to any notion of fairness for the less well off, retirees or not?

    • How do you know Judith that a lot of pensioners have super to live on. I’m a widow and I certainly haven’t

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      • I don’t have super . I am a widow, and there was no such thing for women when I started work. It wasn’t even compulsory for men either back then. That only came in later..

    • With you Brenda…..we get two pension increases a year WOW….about $5 a week…..yeah..that should be than enough to cover the extra taxes..

    • Super did not come in the 1990’s Judith Forbes and not everyone had Super, low income earners and casual workers had none, and what about the 80, 90 and 100 year old pensioners this country has? They had none at all. You are a selfish woman , you think only of your own situation

    • I do not have a super but I know a hell of a lot that do. It is not an arrogant statement at all….a little pain for a future gain. I am not a selfish women at all thank you, and I do not only think of my situation at all, you are one of the most negative nasty people I have ever come across. If people agree with you they are great but god forbid they should have a different opinion to you, out comes the keyboard troll nasty name calling. I have told you over and over that I live on a pension and pay high rent too. I just except that money to give us the lifestyle we are accustomed to has to come from somewhere!!!! Oh by the way I worked through the 80’s and 90’s and we had super taken out in my jobs. A lot of 80, 90 and 100 year olds live in Aged care.

    • And many have very little or no super! Get real.

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      • People who have worked for the Government, have great super schemes, but unfortunately most of us did not have that chance, and only started contributing a few years before retirement……so we still depend on a Government pension, sad but true….!!

    • Judith Forbes But that 5% increase is a 50% increase on the 10% we pay at present 🙂 Play with statistics all you like – just as the gov’t and the media do all the time.

    • I am not out of touch and I am real…..I just happen to spend a lot of time finding out things when I am out in the community. Just find out how many are in Aged care facilities compared to living alone 100 or more to 1. So if you pay GST of $3 on something now you will be paying $4.50 with 15% big deal. Rent, bills and food payed first…..then what is left over will be for extras….if there is less so be it, not the governments place to give you extras to use for your own entertainment.

    • Judith Forbes You are of course correct about the increase. Now look at your power bill say $440 at present. That will go up by $20 if the gst increases to 15%. All these “little” amounts do add up and will be one hell of an impost for those of us on low incomes. This is not about the gov’t “giving” us anything, rather potentially taking away more.

    • My bill for getting my house painted was over $10,000 . Would mean an extra $500 on top of that. Would need an increase of $10 week to cover that. Not going to happen

    • Robert Hind The more you use the more you will pay, but the benefits that follow are more. This is simply user pays,

    • Judith Forbes,please provide your evidence/proof of the percentage of the aged have Super.

    • I thought we paid our taxes when we were working so that we could have a decent retirement. I was gobsmacked to hear Malcom Turnbull say the other day that we need educated young people to have good jobs so they can pay for our retirements and health care when we get old. WE HAVE ALREADY PAID!

    • You must be in a reasonable position to say that. Imagine having an old age pension and paying rent. Each time you get a small increase the rent goes up. Being in that position makes life so much more difficult now! Can’t afford the electricity, public transport and/or other utilities. Income tax was supposed to raise money so that the Govt supplied services to the public at a subsidised rate and take care of roads etc. keep lowering the tax rate and guess what happens? Pay more for everything. Then add the GST!!! Then take off penalty rates for weekend workers. Whammo Services are going out the window. Who will be least affected by the GST? Not hard to work it out. Who will be the most affected?

    • Well said Judith. Too many whingers on this site who like to tear apart anyone who has an opposing view to their Labor views. I am sure pensioners would be compensated if the gst was increased. . We have to think of the future with an ageing population and less in the work force where is the money coming from to fund pensions. Of course it is always easy to whinge at least they get a pension plus all the additional benefits. Plenty of countries with no pensions or very little.

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      • Jeanette I do believe that pensioners will get an increase in their pension to help with the GST increase….and that is only fair too….

    • What an incredibly unbelievably ignorant statement Judith. You sound like a Liberal supporter. I bet you cried when Abbott got the sack. You believe that a 50% hike in GST is going to fix the financial woes of this country? How can that possibly be when there are so many people struggling to survive on the wages they are getting now. The LNP wanting to remove penalty rates as well. Do you know how much a full time worker gets paid? With basic wages hovering around the $20 an hour mark, how do you expect people to find the extra?
      The 50% GST hike.
      Crikey you are thick.

    • How about the tax avoiders bankroll our shortfall? The mining companies for one example. Why are we subsidising them? The multi nationals that take their profits off shore. Why are they being let off the hook?

    • bringing in revenue is easy actually Judith – tax the tax avoiders, it would bring in billions.

    • And double dipping Politicians too Marlene. Let the buggers show some integrity and lead by example. They should all be prepared to take substantial pay cuts and lead the country back into prosperity.

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      • Have to agree with with you there Gregory, Politicians are grossly overpaid, and have so many “lurks and perks”, and still as we have seen with in the last months, they abuse the system big time……shame on them that do….just pure greed….!!!

    • Gregory Joseph Patterson It is almost impossible to get the pigs away from the trough.

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      • Absolutely true…unfortunately, and yet they expect the most needy to tighten their belts even further….like go without essentials like food and heating……atrocious for a country like ours !!!

    • Try cutting waste before we accept cutting services to our people.
      $200M looking for some foreign plane that crashed a trillion kilometres from Australia. Why?
      Spending $100 billion on the JSF because the Americans asked us to Rotten plane that no-one wants unless the US government forces them into it
      $40M to resettle FOUR refugees
      How much for a plebiscite to decide the issue of gay marriage. Why not a plebiscite to decide every issue?
      Countless and hidden dollars to support an INdian company wanting to mine our coal cheaply and become the most profitable coal miner in the world?
      Dont tax miners like every other resource rich country does, It might force all the minewrs to pack up their holes and take them to the Caymen islands!
      Don’t spend any money on education Australians aren’t worth spending on when the multinationals can just import cheap Indian and Chinese and … labour and exploit them here
      DONT please DONT tax supernational companies fairly The poor babes cant afford it or they will go away and not sell us ipads or mobile phones or TV sets or cars
      Dont risk money supporting Australian start-up companies. They will just grow and provide jobs for above mentioned unworthy Australians and PAY TAXES to our government.
      Only offer lawyers accountants and union hacks as politicians Then when they stuff up the world they can use the excuse that they never understood science or engineering so why do we need it?

  5. We have a country that is in serious debt..its time to stop going , Oh poor me. I would rather it be a little tuff on me than have my grand kids suffer. You are all so negative, its depressing.

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    • I think most of us are practicle, we are all on a budget and we know how far that budget will extend, most of us have no fat left to cut

    • Nor do I David James but do we assist in destroying our beautiful country and deny our kids the rights we had by being raised in a near debt free country.

    • Elizabeth Waters I am glad you said that because the last time you people went on about our grandchildren suffering because many of us could not afford the cuts the the CPI rise, the Senate unlike you, understood that Pensioners are struggling now. So hopefully this thought bubble will be canned to because , we can’t afford it !! Our dollar has fallen under this Liberal Government and anything imported from over seas..which is a lot because manufacturing here is almost dead..will cost us even more with a GST price hike

    • No we don’t Elizabeth Waters, you are so right it is just a little pain we have to bare to give the future what they deserve.

    • Why should we suffer when the well fattened politicians fat cats and big corporations sit back and laugh at the little man. No way. Make it fair for all.

    • The little pain you are talking about will cost each household around $58 per week. That is 2/3 of my grocery bill. So where does the money come from to feed us. It will increase things like power, water, rates, garbage collection, medications, food, rent, repairs, fuel, etc , etc.

    • Yes I know it will Ruth, but in the long term it is necessary to raise the revenue needed to keep our lifestyle.

    • You all think that politicians and the rich won’t have a sting in their pockets to, to pay this extra too. Yes they have more money than us but they will still loose out too. They will probably loose out more than us in some ways as they have more pies to loose GST money from.

    • Judith Forbes do yo live in the same Australia the rest of us do? Politicians will just give themselves another wage rise to cover it

    • It’s a lazy & ruthless way to raise revenue. If everyone paid their fair share of taxes there would be no problem.It’s easier to hit the powerless than to close the loopholes that allow the super wealthy to escape their responsibilities.

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    • Bruce Mason
      Read the statements from economists around Australia. It is you who is delusional if you believe that all these things won’t be affected. It is called a Goods and Services Tax. Therefore, it will be added to all goods and services just like the current GST is.

    • Judith Forbes
      Do you really believe that asking a low income person and pensioners to find $58 extra a week is good for the economy. Where do we find it. What do we go without. Unfortunately it is usually health care that suffers first which means more crowded public hospitals. We won’t be keeping our current lifestyle. We will be lowering it substantially. More people will lose their homes which means more homelessness and more people will turn to criminal activity to supplement their income.

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    • I agree Ruth … that $58 you mentioned is almost my fortnightly food budget. I eat once a day now and as GST impacts rent, power, health care etc this is money I just don’t have.
      To those who are delusional enough to think the rich will suffer as well from the GST increase you might want to read an earlier response I posted … here it is again “GST is a regressive tax with the definition being “A tax that takes a larger percentage from low-income people than from high-income people. A regressive tax is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder” Simply put that means taxes that apply to essentials are generally considered to be regressive because expenses for food, clothing and shelter tend to make up a higher percentage of a lower income consumer’s overall budget. In this case, even though the tax may be uniform (such as 15% GST), lower income consumers are more affected by it because they are less able to afford it. For example, if a person has $100 of income and must pay $10 GST on purchases/services, this represents 10% of the person’s income. However, if the person has $200 of income, this $10 tax only represents 5% of that person’s income.
      Are you still going to argue this is fair on pensioners and low-income earners?”

  6. Fairness! The gst hits those on lowest incomes hardest especially if it is extended to cover education, health or fresh food. It is of course an easy tax for the gov’t to collect as the retailers/service providers do all the work. Hits us even more as we get older and less capable of doing odd jobs around the house – need those gutters cleaning out, those bigger trees pruning . . . ?
    First effort should be to cut back on tax “loopholes” or concessions that benefit the super-wealthy, not to mention all those multinationals who pay bugger all tax in Aus.

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    • Your a fool – tax concessions to the low income earns would balance the cost. You must be a Labor or Greens supporter, or on the doll.

    • Joe you are not only rude but I think you have cornered the market on being a fool. Do you really feel a couple of dollars a week compensation will make up for all the additional expenditure we will face when the GST is increased by 50%?

    • Joe Rudzyn Welcome back Joe! I see you are still the same old arrogant, rude . . . Oh and by the way you can’t spell either.

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