Let's be impudent for a moment and ponder what is the point of the Turnbull government?
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The Turnbull administration, installed in extremis because Abbott's narrative had ceased to exist, is sailing along altogether more agreeably. However the manner in which a deliberately ill-defined GST-slash-broader tax reform debate has been let loose on the public has insiders wondering if the government really knows as much about where it is going as it would have us believe.
Feeding those concerns is the view that Treasurer Scott Morrison has gone out harder on the prospect of a massive 50 per cent GST increase, than his boss, Malcolm Turnbull.
MPs close to the new treasurer say a steeper GST must be debated, because frankly, in the absence of extra funds, there will be no wider tax reform, and no tax cuts either. Without that additional revenue, the government cannot pursue its objectives of returning bracket creep, lowering company tax to 25 per cent, and chipping away at the budget deficit.
The MP said the government possessed plenty of political capital but little of the real thing. Given there was no appetite in voter-land for "any spending cuts", lowering income tax and company tax could only be achieved if revenue foregone is replaced with extra GST.
Turnbull's innermost preferences are perhaps harder to discern, save for the obvious fact that he is maintaining ready access to an escape route. He knows he may yet be required by deteriorating political circumstances to play Bob Hawke to Morrison's Paul Keating.
Keating had promoted a 12.5 per cent consumption tax in 1985 with the imprimatur of cabinet and the then prime minister Bob Hawke. But when the political going got tricky, Hawke went to water – an eleventh hour retreat that strained relations internally and had powerful long-term repercussions.
Worse, it meant the difficult terrain of tax base broadening would have to be traversed all over again leading to substandard results. First there was John Hewson's 1993 "Fightback!" which Keating, by now prime minister himself, demolished.
Fightback!'s searing demise would bring about Hewson's as well and eventually lead to John Howard's reprise. But such were the political complexities that Howard would be forced to give away huge slabs of the proposed GST base in order to get it through the Senate. However their cut-outs contributed to the GST's dwindling efficacy, such that it now applies to just 47 per cent of transactions in Australia – New Zealand's GST remains right up there in the high nineties.
And that in turn, explains why there is so much energy being expended on lifting its rate, or broadening its base to include exemptions. In short, the returns are huge – $33 billion a year from a jump to 15 cents. The gains leave in the shade other options being floated such as taxing super contributions at the relevant marginal income tax rate, minus 15 per cent, which, while very worthy, would return just $6 billion.
The inside word is that the government will narrow the GST/tax reform debate by month's end. For many MPs that is too long to bleed. But if, as many believe, the government eventually backs down, there are risks too. Along with the obvious query "what was all that pain for?" arises a whole new question: what would be the point of a second term Turnbull government if it has already retreated on tax reform?