Federal Treasurer Joe Hockey doesn’t want to see tax reform simply ending up as tax increases.
But internet shoppers can expect to pay extra in the future for their now GST-free foreign goods.
A meeting last week between Prime Minister Tony Abbott, premiers and chief ministers agreed to broaden the GST to include overseas online transactions less than $1000.
Asked on ABC radio if the GST threshold could go as low as $20, Mr Hockey said: “It could, it may well go to zero as well.”
Mr Hockey and the nation’s other treasurers will consider the issue at a meeting next month.
The leaders meeting also agreed to further consider an increase in the GST rate from 10 per cent to 15 per cent, or an increase in the Medicare levy to help pay for the country’s future health funding.
Premiers such as South Australia’s Jay Weatherill say the increased revenue should go exclusively into health.
But Mr Hockey wasn’t ready to jump on board with that idea.
“It’s no surprise that state leaders may say `we’ve got a spending problem and we want you to raise the taxation revenue’,” Mr Hockey said.
His comments came as business consultants KPMG Australia called for sweeping changes to the tax system, including a 15 per cent GST rate rather than a rise in the Medicare levy as a solution, in its submission to the tax white paper debate.
It calls for linking tax thresholds to average full earnings to eliminate bracket creep, the abolition of stamp duty and other inefficient state taxes.
It also wants the corporation tax rate slashed to 26 per cent.
KPMG Australia chairman Peter Nash said there needed to be far-reaching proposals, rather than just tinkering at the edges.
Mr Hockey said he was willing to look at tax concept named after US billionaire Warren Buffet that this weekend’s ALP national conference agreed to consider. The concept would force the nation’s highest income earners to pay at least a minimum rate of tax.
For example, recent Australian Tax Office figures show about 75 Australians earning more than $1 million a year paid no tax.
But Mr Hockey says 10 per cent of the working population contributes 50 per cent of the income tax paid in Australia and if the right formula wasn’t struck then those high income earners could move overseas.
“I don’t want to see tax reform simply end up as tax increases,” Mr Hockey said.