Young pollies want tax reform—but it’s the older Aussies who’ll pay for it

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.


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GST untouched for 25 years—until now. Image source: Pexels/Andrea Piacquadio


‘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.

Key Takeaways
  • CPA Australia called for GST reform, suggesting a higher or broader tax to ease pressure on younger workers.
  • Exemptions on fresh food and essentials created imbalance, with retirees and welfare recipients contributing less tax.
  • Personal income tax made up over half of federal revenue, while GST mainly supported state budgets.
  • Treasurer Jim Chalmers signalled openness to debate ahead of an August roundtable, though reforms would need safeguards for low-income earners.

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
 

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How does broadening and increasing the overall cost of living with a gst increase ease the burden on anyone let alone the younger generation? Everyone knows as prices increase, so does the gst take, it's self regulating. I'm glad Labor have rejected such a proposal, and sorry the Coalition have only done it with reservations. The CPA shamefully have made their position known and should know better. How about pushing for the abolition of stamp duty being paid more than once on a property or asset.
 
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Again I ask, WHO VOTED LABOUR IN!!
It's LABOR Macca, and it's Labor who have rejected the proposal by what seems to be an influential business the CPA, and the Coalition have only done so with reservations, glad Labor do govern as I'm sure the Opposition would welcome the increase.
 
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Forced into joining a union to earn a living, no way would I vote Labour on principle. I've heard all the arguments on the merits of unionism but I totally disagree with having to join one to work. With the exception of a couple of pricks it still holds true that if you want fiscal responsibility don't vote Labour.
 
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Typical of the young ones, earn far more than pensioners and most superannuants
and they want to pay less!!!! We would all like to pay less. If the young ones didn't want to but everything new on the market they wouldn't be paying so much GST!!!!
 
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Some wealthy people are paying less tax than pensioners are paying through the GST.
The wealthy and big business need to pay through a financial transaction tax over $2million.
Don't let big business and the wealthy control the debate as they usually do!
They always seem to get around it,just like Packer did years ago.
 
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So once again seniors are being hit in the hip pocket because we had the hide to work and pay taxes all our lives so we could retire and enjoy life before we hit the bucket.
Of course the Labor Treasurer is in favour of it, any way to grab more money from the elderly is a huge plus for him.
Amazing how it’s always the least paid who have to fit the bill to keep the Highly paid in the lifestyle they think are entitled to.
Rise in GST won’t make any difference to the politicians or the wealthy, it’s those who have next to nothing, will end up filling the coffers for the snouts that run this country.
Australia is one of the very highest countries in the world that pay tax on absolutely everything, it will never stop and they will never stop blaming the seniors for getting the pitiful pension to stay alive.
How about those who don’t and won’t work, immigrants who are given handouts as soon as they hit our shores, Centrelink payments given out when not one of them have contributed any tax in this country.
Doesn't matter which party gets in on an election, they are all the same , greedy, arrogant and self centred arses.
You said it in a nutshell, remember when immigrants were allowed in I believe in Rudds ?term they were given $10,000 to buy essentials while Aussies were abandoned.
 
How does broadening and increasing the overall cost of living with a gst increase ease the burden on anyone let alone the younger generation? Everyone knows as prices increase, so does the gst take, it's self regulating. I'm glad Labor have rejected such a proposal, and sorry the Coalition have only done it with reservations. The CPA shamefully have made their position known and should know better. How about pushing for the abolition of stamp duty being paid more than once on a property or asset.
I understood the stamp duty was to be dropped when GST came in ! Hungry State governments wouldn’t let that happen we are being double taxed .
 
So have I got this right……GST reform will ease pressure on our ‘young’ workers, by increasing GST on just about everything, paid by increasing the prices of just about everything….. and yes, hitting the pockets of the vulnerable in our society who are currently struggling as it is……kind of like robbing Peter to pay Paul, only Peter can’t afford Paul, and Paul greed is unforgiving…. Oh, and reforms would need to have safeguards for low income earners….doesn’t mention safeguards for pensioners relying solely on their pension to get by……makes me wonder how much more needs to be sacrificed, and when enough is enough….
 
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Spot on, starting with greedy pollies
Large corporation CEOs need to be first.

Some unpronounceable CEO of Sri Lankan extraction, the Macquarie Group's boss, earns almost 50 times that of Anthony Albanese annually. She only has 20000 employees to look after, while Albanese has 27 million under his wing.

Who is the greedier?
 
The writer of this article did a great job of creating an Us Vs Them vibe. Maintain the rage!!!

In reality a consumption tax hits those who consume more the most. The tax-avoiding millionaires consume most, & so pay most, & cannot avoid it. Most seniors are not big consumers, & those who are are the well off amongst us. If there's concern for the needy, then some of the higher GST revenue can be redirected to those who need it (as opposed to funding tax returns for the millionaires). A rise of 5% in GST would cover a 5 or even 10% rise in pensions, etc, & still raise much more revenue to reduce the country's debt, fund health properly, etc.

It makes less sense to tax earnings & businesses most, & our country is struggling because of it.
In this scenario I really don’t care how much consumption tax our tax-avoiding millionaires pay because clearly they can afford it and probably don’t even think about it anyway…
Most seniors are not at all wealthy, some might be comfortable with their lifestyle, and some are just downright poor and existing from week to week on a very inadequate pension looking at the prospect of having to pay more for their shopping…
IF there’s concern for the needy, does that mean that our government may or may not have concern for the needy….Anyway you said if….So if there’s concern for the needy, are you going to tell our government politicians to redirect some of the GST paying millionaires revenue to those that need it, as you say, as opposed to funding tax returns for the millionaires…………And does what you say mean that currently the GST paid by the very wealthy millionaires, is being redirected to fund their tax returns …….. I did not realise this…
Maybe it does make less sense to tax earnings, but it shouldn’t come at a cost that millions could not afford……..
This was said in the article

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.

I have no faith in that statement…
 
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