The Financial Services Council (FSC) has called for the goods and services tax rate to be increased to 15% and its base broadened, as well as a reduction in the company tax rate to 22% by 2020.
The recommendations form part of the council’s submission to the federal government’s tax reform white paper.
The submission argues for a range of tax reforms, which the council says will bring Australia’s tax system into the 21st century. Along with changes to the GST and the company tax rate, the FSC wants to see personal income taxes lowered and state-based stamp and transaction taxes abolished.
“Our 1950s tax system is in need of reform,” said Andrew Bragg, FSC director of policy, in a statement accompanying the council’s submission.
“Australia is already a relatively high-taxing nation; therefore increasing the overall tax burden is not the answer. We need to fix the tax mix.”
“Australia has the second highest reliance on company and personal taxes in the OECD and one of the lowest and narrowest consumption taxes. Our tax mix is the converse of the OECD average – it is heavily reliant on personal and company taxes, whereas the average OECD nation has a higher reliance on consumption taxes.”
Bragg said raising the rate of GST from 10% to 15% and broadening the base of the tax, while still providing compensation to lower income earners, could generate an extra $42 billion in government revenue in just one year.
Car parts manufacturer underpaid factory worker $16,000
A Melbourne-based car parts manufacturer has entered into an enforceable undertaking with the Fair Work Ombudsman, after it was found to have underpaid a migrant factory worker close to $16,000 over a four year period.
The worker, who spoke limited English, worked for car components manufacturer Katjen Enterprise between January 2010 and May 2014.
During that time she was paid a flat hourly rate of $13 for weekend, overtime and public holiday work, however, she should have received up to $46.09 an hour as she was covered by the Vehicle Manufacturing, Repair, Services and Retail Award 2010.
The worker was also underpaid for ordinary working hours and annual leave.
Katjen director Ly Khoung Chau told Fair Work the worker had agreed to be paid $13 an hour but Fair Work Ombudsman Natalie James said in a statement employers cannot enter into agreements that undercut the minimum lawful requirements of employees.
The company has paid the owing entitlements and agreed to implement workplace relations training for managers. The company will also commission external professional audits of its pay practices every six months over an 18-month period as part of its undertaking to the Fair Work Ombudsman.
Investors shaken after no vote
Local shares took a dive this morning but have made some recovery, a sign of shaky markets after Greece’s no vote yesterday.
Quay Equities analyst Tristan K’Nell said in a statement shares were bound to open the week in the red because of the outcome of the vote and continued commodity volatility.
“As anticipated, the Australian share market has opened the week in the red as news of a no vote from the Greek referendum combined with a volatile session from commodity markets to send our local market lower,” K’Nell said.
K’Nell said Wall Street’s closure on Friday and the “negative sentiment out of the Euro zone” was always going to conspire to be a “difficult day across the board”.
The S&P/ASX200 benchmark was down 1.3%, falling 70.4 points to 5467.9 points at 12.09pm AEST. On Thursday, the Dow Jones closed down 0.16%, falling 27.8 points to 17730.1 points.