Analysis of Pauline Hanson’s flat 2 per cent tax shows it would help overseas importsMarch 19, 2017
Analysis of Pauline Hanson’s flat 2 per cent tax shows it would help overseas imports
Shane Wright, The West Australian, 8 March 2017
Pauline Hanson’s plan for a flat 2 per cent tax would cost the Federal Budget more than $230 billion and aid imports at the expense of the local manufacturing sector.
Analysis by the left-leaning Australia Institute shows it would be the most radical tax overhaul in Australia’s history.
Senator Hanson has backed a two per cent tax on all income, including welfare payments, as well as abolition of the GST.
One Nation’s policy statement commits the party to explore removing Federal taxation and “direct and indirect taxes on employment”.
But the institute’s analysis suggests such a major departure would punch a $232 billion hole in Federal finances in one year.
A 2 per cent tax on business turnover, property and income would raise almost $147 billion.
This year’s Federal Budget shows the Government will collect $379 billion in taxes.
Institute executive director Ben Oquist said a simple flat tax would leave the Federal Budget in tatters.
“This amounts to a cut equivalent to all Commonwealth payments to the States, including $8 billion to WA, plus the aged pension, plus Medicare and all income support to the disabled – just to name a few,” Mr Oquist said.
“This would be the most radical taxation policy in Australian, probably OECD history.”
One Nation has argued its tax policies would drive a lift in economic growth that would make the country richer and generate extra tax revenues. But the institute analysis suggests the biggest winners would be high-income earners and overseas firms.
A person earning more than $1 million would make a tax saving of almost $420,000. An international firm such as Shell would save $660 million. According to the institute, a turnover tax as suggested by One Nation would encourage large firms to produce goods and services in-house rather than outsource that work to small and medium-sized companies.