For more than two decades, one major tax has remained mostly untouched—until now.

A powerful push for change is gaining momentum, and it could leave many older Australians feeling the financial pinch.

Here’s why a quiet shift in the system might end up costing you more at the checkout.


Australia’s Goods and Services Tax (GST) had stood still since it was first introduced 25 years ago—set at 10 per cent and untouched ever since.

Compared to countries like New Zealand, where GST was 15 per cent, or the United Kingdom with a 20 per cent Value Added Tax, Australia’s rate was considered low by global standards. But that stability might soon be under threat.

A new push from CPA Australia—a leading accountancy group—had reignited the conversation about tax reform. Its chief executive, Chris Freeland, made it clear the organisation believed it was time to rethink the system.


‘GST belongs at the heart of any discussion of tax reform,’ he said.

Freeland argued that broadening or increasing the GST would help lift the heavy burden younger working Australians currently shoulder.

As it stood, most government revenue came from personal income tax, even though GST was originally intended to reduce reliance on it. He warned the current setup was unfair and unsustainable.

‘OECD statistics show that Australia has an unsustainably high burden on income tax, which means workers and businesses contribute a lot more of the base compared to other countries,’ he said.

Under the current structure, fresh food items—such as fruit, vegetables, unflavoured milk and uncooked meat—were exempt from GST thanks to a deal struck by John Howard’s Coalition government with the Australian Democrats in the Senate when the tax was first introduced. But CPA Australia now said those exemptions created a major imbalance.

‘It’s time for a grown-up conversation about Australia’s tax system and the GST’s structural weaknesses,’ Freeland said.

‘For the past quarter of a century, the GST has remained virtually unchanged, and its inconsistencies and design flaws—such as taxing some foodstuffs and not others—have been ignored.’


He also noted that exempting basic items meant retirees on the age pension and welfare recipients contributed relatively less tax overall—leaving working Australians to foot more of the bill.

‘Most tax specialists believe that increasing the GST is the key to broadening the overall tax base. Reducing the reliance on personal income tax would put more money in people’s pockets and ultimately generate more revenue to drive economic growth,’ he added.

As the federal government looked ahead to the 2025–26 financial year, it expected to collect $349.7 billion from income taxes—accounting for 51.7 per cent of total Commonwealth revenue. That figure was projected to jump even further, hitting $420.3 billion by 2028–29 and making up 54 per cent of total revenue.

In contrast, GST revenue flows directly to states and territories. For New South Wales, it was expected to make up 22.4 per cent of the state’s $124.2 billion revenue in 2025–26.


Treasurer Jim Chalmers appeared open to discussion, hinting at potential changes ahead of an economic roundtable scheduled for August.

‘What I’m going to try and do—because I know the states will have a view on it, I’m going to try not to dismiss every idea that I know that people will bring to the roundtable,’ he told the National Press Club in Canberra.

‘I suspect the states will have a view about the GST—it’s not a view that I’ve been attracted to historically, but I’m going to try not to get in the process of shooting ideas between now and the roundtable.’

Still, any shift in the GST would not be without consequences—particularly for older Australians. Those aged 67 and over were eligible for the age pension, making them more likely to be among the 5.4 million Australians born during the post-war baby boom.

By 2024, the youngest of that group had turned 60, allowing them to tap into their superannuation and stop paying the 15 per cent earnings tax if they were no longer working.


CPA Australia acknowledged that any changes would require support for low-income households and pensioners.

‘Of course, you also have to look at who would be impacted, such as lower-income households and pensioners, to make sure they’re adequately compensated during the transition,’ Freeland said.

Currently, single Australians on the age pension could receive $1,051.30 per fortnight, rising to $1,585 for couples. The family home remained exempt from the assets test, and those who sold their primary residence were not subject to capital gains tax—as long as it had not been used as an investment property.

It was a politically sensitive topic. The Liberal Party had famously lost the 1993 election under John Hewson with a policy proposing a 15 per cent GST. But five years later, the party returned to power in 1998 with a more modest 10 per cent GST plan—which ultimately became law.

Now, a quarter of a century on, calls for reform were getting louder. And with personal income taxes climbing, government revenue needs rising, and generational fairness under scrutiny, it seemed likely that the debate around GST was far from over.


With a potential GST shake-up on the horizon, many older Australians could soon feel the impact where it hurts most—their weekly shop.

If reform is on the table, voices from every generation deserve to be heard.

Do you think it’s fair for pensioners to pay more tax to ease the burden on younger Australians?

As talk of GST reform heats up, it's clear that Australia is rethinking how and where it collects its revenue—and older Australians are right to wonder how these changes might affect their wallets.

This isn’t the only tax shake-up on the table either. There’s also been chatter about making tech giants pay their fair share through a digital services tax, though progress has been slow.

Read more: Australia could tax Google, Facebook and other tech giants with a digital services tax – but don’t hold your breath