Canberra, Australia – Treasurer Josh Frydenberg dismissed suggestions to increase the GST, leaving the younger Australians to most likely pay the debts of the country due to the coronavirus pandemic.
There have been calls for the GST to increase, which would stop the younger generation to shoulder the debts incurred for the country’s coronavirus pandemic recovery. Other suggestions from groups include reductions in both corporate and personal income tax rates and introducing a land tax.
However, the Treasurer quickly dismissed the notion during an interview in Canberra on Tuesday. Mr Frydenberg stated that the primary focus of the Australian Government right now is to boost the economy. He noted that they have no plans or intention to increase the GST, although he agreed that there would be debts that Australian people have to pay moving forward.
Previously, Robert Breunig, the head of the Tax and Transfer Policy Institute, said that the tax system would allow Australian retirees to pay much lesser amount compared to those who are economically active.
Professor Breunig stated that the reform would significantly reduce the period for the country’s economic recovery from the ongoing health crisis to at least five years compared to the ten years it would potentially take.
He further stated that the choice for the country right now is either providing fewer government services or higher taxes, but both will significantly affect younger Australians in the future.
Mr Breunig also warned about the country’s reliance on corporate taxes and personal income. He said that it could see younger Australians needing to foot majority of the recovery bill. Mr Breunig estimated the amount that taxpayers have to pay in the coming years to around hundreds of billions.
Meanwhile, he commented that it would be fair if all Australians have the same wealth or amount of assets, or inherit expensive real estate, which is not the case for most people.
According to Mr Breunig, most countries in OECD already imposed increased tax rates such as land taxes or GST. He highlighted that the Government going for those kinds of fees makes it much harder for taxpayers to avoid.
Further, Mr Breunig said that with the corporate taxes much lower, Australian companies would stop moving their assets overseas to minimize their burden in the country. He also commented that family homes should be part of the asset tests for all Australian pensioners.
Professor Breunig further stated that the shutdown in the economy primarily affects younger working Australians. They made up the majority of the country’s casual workers, including those who recently graduated, new employees, and those who will experience the challenge of finding jobs in a much slower economy.
He believes that it would be possible to leverage on some of his suggestions despite the rejection it received from the coalition last year and the Labor’s massive tax reform plans. However, he added that any changes made should be gradual to help Australians better shift into a new system.
Meanwhile, the World Health Organization (WHO) stated that the coronavirus disease hadn’t reached its peak yet. This comment came following countries, including Austria and Spain, allowed partial returns of employees to their work. Meanwhile, India, UK, and France extended their ongoing lockdowns to prevent the further spread of the deadliest virus in the century.
Based on recent reports and data, there are almost two million people from all over the world who got infected by COVID-19. Out of those who tested positive of the virus, over 119,200 already died. The epicentre of the deadly virus was previously in China, where it first emerged in a city in the country in December. However, the current highest confirmed COVID-19 cases and the death toll due to the virus is in the United States. The US currently records 23,568 total deaths due to coronavirus.
Meanwhile, the rise of new cases already eased up a bit in some parts of Europe, including Spain and Italy. Italy, however, remains on the top two for the highest death toll due to the virus worldwide. On the other hand, coronavirus outbreaks in Turkey and Britain continue to grow.
According to WHO, most of the outbreak cases, 90% of the total recorded cases are from the US and Europe. Margaret Harris, the spokesperson for WHO, stated that with this figure, the world outbreak is not seeing its peak yet.
In Australia, the cases of COVID-19 related to the Ruby Princess cruise ship increased. Australian authorities confirmed that a total of 139 crew members of the vessel tested positive of the disease.
Initially, the cruise ship was to leave the Australian waters by tomorrow night, but with the new cases, the vessel will remain docked at a port in the south of Sydney.
With over a hundred crew members in quarantine, authorities will provide pre-packaged meals and care packages to those who can’t get off the vessel.
Since disembarking late in March, there are already hundreds of confirmed cases linked to the cruise ship with 18 of its passengers now dead due to COVID-19.
Meanwhile, the death toll in Tasmania due to coronavirus increased to six people after the death of a 91-year-old woman.
As of today, Australia already reported a total of 6,400 confirmed cases of COVID-19 and 62 deaths recorded due to the virus, with over 366,000 tests conducted all over the country. There are 41 new cases of coronavirus added from the total documented cases yesterday.
The highest number of confirmed virus cases is still in New South Wales, with a total of 2,870 recorded evidence of the disease. Victoria and Queensland follow the chart with 1,291 and 998 confirmed COVID-19 cases, respectively. Meanwhile, the Australian Capital Territory recorded 103 confirmed cases. The Northern Territory, South Australia, Tasmania, and Western Australia recorded 27, 433, 151, and 527 confirmed COVID-19 cases, respectively.
On the other hand, Australia is also on the verge of economic shock that experts predict will be the size of the Great Depression. This downturn is due to the impacts brought by coronavirus pandemic.
Brendan Coates, the household finances program director at Grattan Institute, cautioned that the $130 billion worth of subsidy by the Australian Government might be hiding the looming economic downturn.