The Wrap with Matt Grudnoff
This week, we published important research that looked at terrible flaws in the GST that are costing Australians billions of dollars in important government services, like health, education, housing, and infrastructure.
When the GST was introduced, it was promised to be a growth tax that would help make the states and territories financially independent. But growth in the GST has not kept up with the rest of the economy. The slow growing GST means less revenue flowing to the states and territories, forcing cost cutting to essential public services.
This slow growth is expected to continue, costing the states and territories $26 billion this financial year and a staggering $122 billion over the next four years.
Short-changing the states and territories is having real impacts on the vital government services they provide. Shortfalls in funding of health, education, and other vital public services are commonplace across Australia.
The slow growth in the GST is caused by rising inequality, which is driving less spending on things that are subject to the GST. For example, the housing affordability crisis means people are spending more on rent and mortgage repayments, which means they have less money to spend on things that are subject to the GST.

