Pensioners could better off if the GST is increased, says new report

New modelling from the Grattan Institute has show that increasing the GST to 15 per cent could generate as much as

New modelling from the Grattan Institute has show that increasing the GST to 15 per cent could generate as much as $27 billion annually for the Federal Government, and also benefit the lowest income earners in Australia, i.e. pensioners.

The Institute has suggested tax tradeoffs for low-income households, and that the model shows the poorest 20 per cent of households will be fully compensated for higher tax

Grattan Institute chief executive John Daly told the ABC, “People in the bottom 20 per cent would actually be in a better position than they are today,” he said.

“They would have more money to spend and after accounting for the GST, they would be able to buy more with the income they have than they can today”.

Prime Minister Malcolm has kept quiet on whether the GST will definitely be implemented, but it has been strongly suggested that it is inevitable.

The Grattan modelling found that a higher GST would impact more on higher-income households, with the top 20 per cent of households paying an additional $26 per $1,000, as opposed to the $25 payment by the lowest income households.

Mr Daly said the research make Labor reconsider their opposition to increasing the GST, because the lower income families will be better off in the long run.

“The assumption is that raising the GST would be regressive,” he said.

“If you change tax rates for people on lower incomes, many of those people are working part time, and the amount that they get to take home after tax and welfare is a material component of their decision to work an extra hour or not”.

So we want to know your thoughts today: Do you really think you’ll be better off with a GST increase? Are you worried at all about how far your dollar will stretch?


  1. Why am I not convinced? Don’t believe they have taken into account that EVERYTHING will rise in price! Another tax that the rich will dodge with their trusts and tax avoidance practices.

    • And instead of adding $50 GST to the price of a $500 fridge we will have to pay $75 GST. but because the GST has gone up on fuel, freight and everything connected with getting the item to my city a $500 dollar fridge will probably cost $600 instead. There fore the GST on the same fridge will be $90 dollars instead of the $50 GST we started with.

  2. How the hell do they work that out life is a struggle as it is for pensioners no huge payment for the rest of our lives like the cashed up politicians get

  3. Get rid of all taxes – personal, get, payroll, sales etc etc etc and replace it with everyone pays 5% (and that includes businesses etc) on whatever is bought…. Fairer..?

  4. Mike here-read a comment from a farmer in the morning paper a short while back. When asked whether a change in the gst wouldhave much effect on him, replied, “not really, my gst is tax deductible anyway”.

    • He’s not really telling the truth then is he. Business costs are tax and GST deductible – Personal expenses (Food clothes education expenses for the kids) aren’t tax or GST deductible. He’ll be paying the GST on them same as you and me (If he’s honest)

    • If he’s honest…… If he has a trust account, then he certainly won’t, and many of them do.

  5. I can’t see that we will be better off, even if they compensate it won’t be enough and the price of things constantly rise, the compensation will not rise with it

  6. And for that essential buy like a refridgerator if yours breaks down on top of the items you will already pay GST on? I bet you are not compensated for that and big ticket elctrical items DO NOT last a life time

  7. Don’t forget that they took rebates away from pensioners that the labor party gave to help wth the carbon tax. Remember how we where all supposed to have a savings of $600.00 per year when they cut the carbon tax and took away those rebates YEH THAT WORKED OUT WELL DIDN’T IT. So they saying is the lord giveth and the lord can take it away. DO NOT BE FOOLED by these bribes

    • Err no” they” didn’t. The rebates and concessions were left in place, although they should have been removed. Oh and your precious ALP will vote for the GST increase

    • I get my rebate on my Gas & Electricity bill every 3 months about $60,00 . BUT we still have THE refrigerant at HIGH cost and Tipping fees !!!!!!!!! no wonder people dump stuff now.

    • John Green Bea Little keeps on about this , on & On i have told her she is wrong BUT Labor supporters are one eyed

    • Dawn Bruce
      And you don’t think the LNP supporters are one eyed.
      John Green
      The federal government stopped funding the rebate system to the states so the states had to end up finding money to continue paying them. Get your facts right.

    • Bee don’t let the facts get in the way of your story. The rebates were not removed.

    • i know not everyone can be compensated with a proposed 50% GST rise but as a self funded retiree i feel i will be on the losing end of this argument !!!

      • Golden Oldie  

        I belong to the forgotten group in all the discussions. Made the decision to downsize value of house before the asset test changes were announced, so that as soon as I occupy my new house I lose my part age pension, all the current concessions, will have to pay the extra GST on everything I need, will not benefit from any extras given to pensioners to compensate for the changes, cannot get any relief from lower tax rates as I don’t pay income tax, and will get a lower return from my Superannuation Fund than the current level of a full age pension, and earn less than 2% on any funds held outside of super. So much for working long and hard to get a little extra on retirement.

        • roma guerin  

          To Golden Oldie. Even as a sole-income pensioner, I completely sympathise with the invidious situation you are in. When the recent brainstorm about us selfish so-and-sos downsizing to let young couples into the housing market was proposed, I worked out that I would be in exactly the position you are in. With one exception – my house in a small country town would not fetch enough money for me to buy even a dogbox in the suburbs, where I would need to go to access health services. Catch 22.

          • We are in exactly the same position. My husband is an SFR and I earn a little bit of money doing part time work, he doesn’t qualify for even a part pension. Neither of us pay tax, so there’s no tax concession for us. We get no rebates, but do at least have Seniors cards.
            I’m giving up work next year, but he still won’t qualify for a pension. We own a house, but can’t really downsize because we look after our 3 grandchildren several days a week to save the kids costs. We even have 3 living with us now so they don’t have to pay rent while their house is built. But then, we’re the selfish ones, living in a big house.
            Any increase in the GST just comes out of our pockets, with no way of compensation. Unfortunately Messrs Turnbull & Morrison just don’t see this side of life.

    • Dawn Bruce I am trying not to laugh here.. but Bea Little might be one eyed but that one eye is right on our finances and she is right

    • Your electricity bill is only $60 for 3 months Dawn Bruce? where do you live in a tent? mine is nearly $200 for 3 months but I am always washing and cleaning

    • Rosalind Battles
      I agree. I am very frugal with my electricity yet I still get a $250 bill every three months.

    • Alan Bell
      Read my reply re the rebates. The federal government stopped funding them in 2014 leaving the states to pick up the slack.

    • And by the way I have two very good eyes and yes the federal govt took rebates away from single mothers pension disability pensions the states now pick up the slack for age pensions. And I find it very difficult to fathom a $60.00 bill for electricity unless you have solo and live in the desert.

    • Dawn Bruce never said her electricity bill is $60 a quarter. Re tead what she said, Bea Little.

    • Jane Whitfield you might need glasses she said every three months maybe you need to read

    • Well Dawn what rubbish you write I have always voted labor, but I would vote for anyone that is good for Australia, on the other hand comments like you have just made makes you very one eyed,


    • Rosalind I pay $44 per fortnight and then usually another 30 or $40 on top of that, almost $300 and there is only me.

    • Rosalind Battles We were discussing the REBATE for GST I said I get $60 every bill, NO , my bill is closer to $700 every 3months & thats with a 22% rebate I just got through 2 gb , Gas is separate as I have cylinders for stove & heating . It looks very clear to me what I said I get my rebate on my gas &Electricity bill every 3 months, You don’t bother to read anything

  8. Being self funded retirees, this will cost us.There is no compensation for our group of oldies ever! The only benefit we get is the health card, which gives us cheaper scripts,
    Dependant upon income

    • Absolutely right. Self-funded retirees will be the group most disadvantaged by a rise in the GST. I can’t see the Liberal Party giving anyone on low or fixed income any fair compensation.

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