The CPA Australia-commissioned research looked in detail at four different scenarios for changes to the base and rate of the GST, accompanied by the abolition of a range of inefficient taxes.
The research modelled a 10 per cent GST on a broader base; a 15 per cent GST with current exemptions; a 15 per cent GST applied to health and education but exempting fresh food; and a 15 per cent GST applied to health, education and all food.
The results showed additional GST revenue generated in the first year of reform would be $12.1 billion, $26 billion, $36.8 billion and $42.9 billion respectively.
Discussing the report, CPA Australia chief executive Alex Malley said the research makes clear that the fear and misinformation often associated with GST discussions is misplaced.
“What our report shows is that additional GST revenue can be used to abolish a number of inefficient state taxes and also provide for personal income tax cuts and compensation for low income households, while also boosting economic growth,” Mr Malley said.
“It is the packaging of changes to the GST with the removal of other taxes that is critical, and is so often missing when it comes to the GST debate.
“The additional revenue raised in each of the scenarios can be used to retire or reduce inefficient and unpopular taxes, including stamp duties on insurance, motor vehicles and conveyancing on residential and commercial properties.
“The modelling reveals that there is also sufficient revenue to return to households as income tax cuts or as compensation for low income households who would not benefit from changes in income taxes,” he said.
Mr Malley said the results indicate that the net outcome in all the reform scenarios analysed is that households across the income spectrum can be better off.
“CPA Australia’s report shows clearly that there is considerable upside for both households and broader economy to a calm and rational look at the GST," he said.
“In all four of the scenarios, our GDP is bolstered over the medium to longer term, which means more economic activity and growth.
“If Australia is to grow and compete globally, we need a world-class tax system that incentivises businesses to grow; encourages innovation and attracts investment; enables the delivery of the services we expect of a sophisticated economy; and increases our overall standard of living.
“This is a time for real leadership from politicians on both sides of the political fence so we can have the calm and rational discussion we need about the best tax mix for our country,” Mr Malley said.