<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The government is facing a new call to raise the GST but shield low-income earners from the ill effects by handing out a hefty rebate to all taxpayers each year.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The new proposal, put forward by teal independent MP Kate Chaney and highly respected economist Richard Holden, would hike the GST from 10 per cent to 15 per cent.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>At the same time, it would remove the current exemptions for the likes of fresh food and private education and health.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>EXPLAINED:</span></strong><span> </span><a href="https://www.9news.com.au/finance/gst-why-are-there-calls-to-change-it-australia-tax-system-explained/90b4e02e-8aec-4a15-8727-e2ba31209a98" rel="" target="" title="Why experts want to raise the GST"><strong><span>Why experts want to raise the GST</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>In order to ensure low-income earners aren't unfairly impacted by the take hike, Chaney and Holden have proposed a universal $3300 "basics rebate", to be paid to every Australian adult, which would effectively provide a $22,000 GST-free threshold.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>They say the changes would leave the lowest 60 per cent of income earners better off than under the current system, while at the same time giving the federal budget an extra $23.8 billion in revenue in 2026-27.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Intergenerational inequity is built into our tax system," Chaney said.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/finance/gst-raise-proposal-kate-chaney/0dac5b2c-c253-4115-bd46-e3482986816e" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Younger generations are facing the growing burden of funding an ageing population and will bear the cost of future interest payments to cover the structural deficit forecast for the next decade.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"We have to have courageous conversations about other revenue sources to avoid handballing this problem to future generations."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/world/donald-trump-usa-united-states-recession-jobs/26d410eb-9401-47f6-894c-23d9e7589d04"><strong><span>Why the report that infuriated Donald Trump actually served as a warning</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Holden said the proposal would have the added benefit of allowing the government to cut income tax rates and index them, ending bracket creep in the process, and still provide billions of extra funding for the budget.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Ahead of its productivity roundtable this month, the government has faced repeated calls to change the tax system to remove the reliance on personal income tax and fix the structural deficit the budget has fallen into.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Australia's tax system is pretty strange relative to other... advanced economies," Holden told 3AW this morning.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/australia-weather-rain-sydney/491d6ea7-3df6-428d-a3fc-bfac027b486b"><strong><span>Millions brace for second imminent winter deluge</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"We get about twice as much of our revenue from income tax and about half as much from the GST, or value-added taxes, as other countries.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"That's very inefficient, it holds back productivity, it holds back innovation, it has intergenerational problems where it taxes younger people of working age a lot more."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Although Treasurer Jim Chalmers is sceptical of raising the GST, and Prime Minister Anthony Albanese has all but ruled it out, the consumption tax has been cited by economists as an obvious target for reform because it is so efficient.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Holden acknowledged politicians had typically been averse to raising the GST, but said he hoped the time was right for the government to embrace the courageous move.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/world/chikungunya-what-is-the-virus-now-spreading-in-southern-china-explainer/f559f574-f2b8-4bc7-8f5f-8bee35bc9dd4"><strong><span>What you need to know about chikungunya, the virus now spreading in China</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This moment with the Chalmers economic roundtable is the moment where this has got a little more traction and a little more attention," he said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"So I think that's the question: is the upcoming August 19 roundtable going to be a moment for genuinely thinking about bold ideas?"</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Senior Nationals senator Bridget McKenzie this morning encouraged the government to use its massive parliamentary majority to properly address tax reform and stagnating productivity.</span></div></div><div><iframe frameborder="0" height="150px" src="https://omny.fm/shows/3aw-breakfast-with-ross-and-john/how-a-15-per-cent-increase-to-gst-to-could-fix-australias-inefficient-tax-system/embed" width="100%"></iframe></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This is a great opportunity that only comes around every couple of decades," she told </span><em><span>Today</span></em><span>.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This government's got a huge mandate. They have to use it.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"It might get some people off, particularly their traditional stakeholders, but they've got to use it. They've got to be bold."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><a href="https://www.9news.com.au/national/how-to-follow-9news-digital/29855bb1-ad3d-4c38-bc25-3cb52af1216f" target="_blank"><strong><em><span>DOWNLOAD THE 9NEWS APP</span></em></strong></a><strong><em><span>:</span></em></strong><span> </span><em><strong><span>Stay across all the latest in breaking news, sport, politics and the weather via our news app and get notifications sent straight to your smartphone. 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