Twenty years since GST reform in Australia: A critical assessment

Abstract

This chapter presents a critical and comprehensive evaluation of the Goods and Services Tax (GST) introduced in Australia with effect from 1 July 2000. The assessment is more comprehensive than similar past exercises. Firstly, it goes beyond the traditional tax policy principles in considering the political and administrative dimensions of the GST. Secondly, it adopts various approaches for evaluating the success or lack thereof of the GST. The scope of the chapter encompasses the GST-based tax reform (GST and associated measures) although it focuses primarily on the GST itself. It is argued that the GST can be considered a success in terms of public policy and implementation. However, when it comes to specific policy objectives, the GST reform has scored poorly. In particular, the GST is not revenue sustainable in the long run, making future GST reforms, such as base broadening or a rate increase, both desirable and inevitable.