STATEMENT BY THE PRIME MINISTER, THE HON P J KEATING MP
THE COST OF A 15 PER CENT GST ON AN AVERAGE FAMILY
An average family with children with both husband and
wife in employment and an income between them of $ 50,000
would be $ 75 a week worse off because of a 15 per cent
CST. This figure assumes that basic tgQdis untaxed and that
per cent of the abolition of-the -wholesale sales tax
is passed on to consumers.
This means that consumers potentially face a rise of 9.2
per cent in prices because of a 15 per cent CST before
receiving aiij' dupposed relief through the abolition of
payroll tax and lower fuel excise. This is based on Dr
' Hewson'Is e-stimates of whfat revenue -a 15 per cent GST
would raise after the wholesale sales tax is abolished
allowing for the exemption of basic food. It is also
based on estimated private final consumption expenditure
in 1990-91 adjusted for taxes.
This S75 loss to an average family is absolutely
guaranteed if Dr Hewson is elected on 13 March 1993.
What is not guaranteed is that Australian families will
be fully compensated.
Dr Hewson' s compensation _ packagep cannot be funded. This
was always the case but -in the last few days any
semblance of plausibility has been stripped away with the
discovery that Dr Hewson has an S8 billion hole coming
from the fact that Telecom is only worth $ 12 billion, not
the $ 20 billion he has claimed.
On top of that, consumers are most unlikely to benefit
from lower petrol prices.
The States will be forced to put up their petrol taxes
because Dr Hewson will cut State arants and will not
properly compensate them for the abolition of State
payroll tax. As the NSW State Treasury has informed
Premier Fahey, the NSW State Budget will be out of pocket
by between S300 and S400 million per annum because of Dr
Hewson' s policies. 6673
Dr Hewson will also impose a road user charge after the
election although he will de~ ny tis.
Now Dr Hewson is claiming that not only will families be
fully compensated for the GST, they will actually be $ 56
a week better off.
He is also saying that the GST will lead to a $ 20 billion
boost for business.
Dr Hewsont s fantasies know no bounds.
There is no way that Dr Hewson's numbers can add up.
Everyone cannot magically be better off with a big new
tax of 15 per cent on nearly everything people buy.
There is no magic pudding.
What is real is that with a Hewson Government, Australian
families will start $ 75 a week worse off because of the
GST and they will be on their own as they try and get
this back from Dr Hewson.
There is no way in the world that Dr Hewson can deliver
compensation of this magnitude. It cannot be afforded by
Dr Hewson and what relief he does grant will disappear
into the pockets of desperate businesses trying to
weather the storm of the GST and -into . t he hands of State
Governments trying to balance their books after they have
been ravaged by Dr Hewson's cuts.
As in Canada, all that a GST offers Australia is the
stalling of the recovery, higher unemployment and lower
living standards.
Unlike Canada, Australia can still avoid making a change
for the worse by ensuring that Dr Hewson never becomes
Prime Minister.
MELBOURNE February 1993
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