Tony Abbott's budget, tax strategy lacks conviction and logic
If Joe Hockey was actually determined to broaden the base of the GST he wouldn’t start by including food, he would start by imposing it on private school fees and private health insurance. Not only would he collect billions in revenue, he would raise it primarily from high-income earners. While the poorest Australians spend a relatively large share of their budget on food they rarely send their kids to expensive private schools.
Of course, the fact that such a shift would collect significant revenue from the well-to-do voters of Mr Hockey's seat and virtually nothing from the low-income electorates represented by the National Party is precisely why he won't do it. While the Treasurer talks a lot about sharing the pain, as last week’s budget shows, he clearly doesn't mean it.