GST Reform Australia: Fresh Data, Fierce Debate & the Big Tax Reckoning

August Showdown: GST Reform Takes Centre Stage

Circle your calendars — GST reform is set to steal the show at the Productivity Reform Roundtable, running 19–21 August. But this isn’t your average Canberra talkfest. It’s the government’s headline act for long-term economic reform, with everyone from union bosses to business heavyweights and policy wonks pulling up a chair.

Tax reform — yep, including the GST — will be front and centre, right alongside big-ticket topics like productivity, sustainability, and rebuilding the budget. With the Treasurer throwing open the door to bold ideas and the Business Council itching to pitch high-impact proposals, you can bet GST will get a fiery workout.

If ever there was a moment to watch the future of Australia’s tax system take shape, this August is it.

1. Why Bother? The Case for Shaking Up the GST

Well, the future isn’t exactly throwing us a lifeline. Australia’s population is greying fast — by 2063, the number of folks over 65 will more than double. At the same time, fewer people will be in the workforce. Translation? The tax base is shrinking right when we need more dollars for health, aged care, and everything in between.

The OECD didn’t mince words: if we keep milking income tax, we’ll overburden a dwindling bunch of workers. Their advice? Widen the GST net or nudge the rate up. Or both. Gulp.

2. Boom or Bust? Productivity vs. Pain

PwC did the maths and laid out four reform paths. The prize? Up to $40 billion a year — yep, billion — if we expand the GST base and/or bump the rate to 12.5%. That’s not pocket change; it's enough to bankroll our entire public university system.

Even greener taxes are getting attention. One study showed that using GST revenue to slash payroll tax can supercharge GDP, cut emissions, and create jobs — the fabled “triple win.” Now that’s a unicorn worth chasing.

3. Will Aussies Work More — or Chuck It In?

Here's where it gets juicy. The Grattan Institute reckons removing exemptions and getting more women and older Australians into the workforce could add a cool $70 billion to GDP over the next 10 years. Not too shabby.

And if we pair a broader GST with smart income tax cuts? We might just make it worth people’s while to say “yes” to that second shift, or stay in the game a little longer. The potential is real — we just have to get the incentives right.

4. Who Gets Hit the Hardest? Spoiler: It Ain’t the Rich

Let’s not sugar-coat it. A straight GST hike to 15% without any sweeteners would hurt the poorest households the most — they'd fork out an extra 7% of their income in tax, compared to just 3% for the top earners. Ouch.

But all is not lost. If the government uses around a quarter of the new GST revenue to boost welfare or offer tax credits, that pain could be eased — or even erased — for low-income families. It’s all about political will.

5. To Tax or Not to Tax: Food, Health, and Schools in the Firing Line

Taxing food? That’s usually a political third rail. But ANU’s data says taxing previously GST-free food at 15% could raise $8.6 billion — enough to fully shield the bottom 40% of households from the hit.

Education’s a tougher nut. Slapping GST on private school fees could trigger a flood of enrolments in public schools — costing states like Queensland millions. So if we’re going down that road, we'd better rethink how we fund both sectors.

6. The Digital Wild West: Time to Tax the Tech Titans

Big Tech’s been dancing around GST for years, especially as more spending shifts online. Enter the Digital Services Tax — a made-in-Australia 3% levy on tech giants. The Greens reckon it could rake in $11.5 billion over a decade.

It’s not a silver bullet, but it sure helps cushion the blow if we’re planning to bump up the GST rate. Besides, why should local retailers pay their fair share while global behemoths get a free ride?

7. Fairness Across Generations: Who’s Really Paying—and Who’s Left Holding the Bag?

Let’s zoom out for a second.

Right now, a huge chunk of government spending is heading toward care and support services — and it’s only going up. According to Treasury, by the time today’s toddlers are paying mortgages, that slice of the pie will have doubled. But here’s the kicker: many of the retirees driving that growth aren’t paying GST on key services they consume.

Widening the base doesn’t just bring in more cash — it helps rebalance the load between workers and non-workers. That’s not about punishment; it’s about fairness and sustainability. If we want a tax system that holds up for the next generation, this could be a critical piece of the puzzle.

But let’s get real — what kind of Australia do we want to pass on in 2050? One crumbling under outdated tax settings? Or one built to go the distance?

Final Word: Change Is Coming — So Let’s Not Botch It

Here’s the thing: no one loves tax reform. It’s messy. It’s political. It’s easy to punt down the road. But at some point, the road runs out.

The GST system we’ve got today wasn’t built for the economy we’re heading into. The good news? We've got the data, the tools, and the insight to fix it. Done right — with fairness baked in, with support for vulnerable Aussies, with the next generation in mind — this isn’t just about plugging a hole. It’s about future-proofing our entire tax system.

So yes, the window’s narrow. But the view on the other side? A more resilient economy. A tax base that grows with us. A fairer deal for all Australians — now and in the decades to come.

The decisions made this August could shape that answer — so now’s the time to pay attention, speak up, and demand a system that works for all of us.