The Australian government on Thursday ruled out making the electricity bills tax-free, voting down legislation which would have resulted in the 10 percent Goods and Services Tax (GST) being removed, giving relief to Australians from rising energy costs.
Australia is currently in the middle of an energy price crisis, with annual prices hundreds of dollars higher compared with 12 months ago, prompting the government to explore how to lower prices and secure supply.
But on Thursday, the government ruled out eliminating the GST on power bills, despite a hard push from the independent Senate crossbench.
Treasurer Scott Morrison said that eliminating the GST would only leave a tax gap which would need to be filled from somewhere else - hurting Australians either way.
"It's not clear to me how creating a tax merry-go-round, where you shrink the GST, forcing states to increase other taxes on families and businesses, fixes the problem," Morrison said.
"What states would then do to make up for their (GST shortfall) is that they'd put up other taxes, which would also hurt households, and if they didn't do that they'd probably follow their usual practice and blame the federal government and scream at them and demand (more money) from us," he added.
Australia is currently in the middle of an energy price crisis, with annual prices hundreds of dollars higher compared with 12 months ago, prompting the government to explore how to lower prices and secure supply.
But on Thursday, the government ruled out eliminating the GST on power bills, despite a hard push from the independent Senate crossbench.
Treasurer Scott Morrison said that eliminating the GST would only leave a tax gap which would need to be filled from somewhere else - hurting Australians either way.
"It's not clear to me how creating a tax merry-go-round, where you shrink the GST, forcing states to increase other taxes on families and businesses, fixes the problem," Morrison said.
"What states would then do to make up for their (GST shortfall) is that they'd put up other taxes, which would also hurt households, and if they didn't do that they'd probably follow their usual practice and blame the federal government and scream at them and demand (more money) from us," he added.
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