GST on bread, milk? Howard's all for it

Former Prime Minister John Howard talks to a business breakfast in Brisbane. PIC: Peter Wallis Source: The Courier-Mail

FORMER Prime Minister John Howard has raised the prospect of extending the GST to essential food in a lively speech to a post-budget business breakfast in Brisbane.

Attended by more than 2000 people at the RNA Convention Centre, the breakfast also heard from Queensland Treasurer Tim Nicholls and economic commentator Peter Switzer.

Mr Howard outlined the need for further taxation reform in Australia to help wipe out some of the debt accumulated in recent years.

He said despite the "marvellous fiscal inheritance" the (Labor) government gained in 2007, the country was "running on empty".

"We've squeezed the lemon dry," Mr Howard said.

"We have to take up again the challenge of reform."

He detailed the challenges of introducing a GST which was first proposed in 1975 but not delivered until July 1, 2000.

"One of the reasons why the GST is not working as well for the States as it should be, is because it doesn't cover food.

"And it doesn't cover food not because we didn't want it too, but because the Australian Labor Party in the Senate took it out of the GST package," Mr Howard said.

"We all know demand for food is relatively inelastic, and if we had food in the GST now, the States would be getting more money out of the GST."

The former PM also repeated recent comments that Australia's economy was in "better shape than most other developed countries".

Mr Nicholls said he did not take Mr Howard's comments to mean that the GST should be extended to food, or could be under a Tony Abbott-led government.

"In terms of what an Abbott Government would do, I think they've made their position around the GST clear, and that's a matter for them to answer to," said Mr Nicholls.

"I think simply Mr Howard was reflecting on the political circumstances that saw Labor and the Democrats oppose sensible reform in Australia at the time when Mr Howard was Prime Minister."

He summed up the Federal Budget as a "smoke and mirrors" budget that would make his own economic blueprint for Queensland even more challenging.

"You can't lose $210 million in GST, you can't have forward payments of $1 billion taken out without having an impact on the decisions," said Mr Nicholls.

"We'll be working out those in the next days and weeks before we finalise our position on June 4."

View the original article here