We must admit revenue problem: Weatherill

Jay Weatherill, already at odds with federal Labor counterparts over a GST hike, has now taken a swipe at the treasurer for not telling the truth about Australia’s revenue problem.

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The South Australian premier says Scott Morrison is perpetrating the same deceit on the Australian people as his predecessor Joe Hockey.

Mr Weatherill said Prime Minister Malcolm Turnbull promised a new government.

“But they perpetrate the same lies to the Australian people that we have a spending problem and not a revenue problem,” Mr Weatherill told Sky News on Monday.

“Unless we get some honesty about that, we are not going to get the sort of debate that is going to lead to any sustainable solution.”

The Labor premier said both sides of politics in this federal election year have to accept that this involves a difficult discussion to raise more taxation.

However, Mr Morrison’s focus is easing the overall tax burden and appears to be leaning towards making personal income tax cuts a priority over a reduction to the company tax rate.

At 30 per cent, the company tax rate is high by international standards.

“But equally and probably I would argue more importantly, the personal income tax rate is punishing Australians and next year, they’re going to pay more personal income tax … unless something is done about that,” he told reporters in Canberra.

Australian Chamber of Commerce and Industry chief executive Kate Carnell agreed it was unfair for middle-income earners to be paying more and more of their salary in tax through bracket creep.

But she urged the government to also pursue a cut in the corporate tax rate as part of a broad reform package.

“They are impacting on Australia’s competitiveness in the world and that is not in anybody’s best interest,” she told reporters in Canberra.

Liberal strategist Grahame Morris says any tax reform will cost the coalition seats at the election, but raising the GST could be the least damaging option.

Mr Morris said the coalition would “lose a few seats” under the GST plan, but not as many as his former boss John Howard did in 1998 when seeking the introduction of the 10 per cent consumption tax.

In that election, the coalition lost 19 seats but held onto government.

However, Mr Morris said there would be a much bigger backlash if it cracked down on superannuation concessions, negative gearing or capital gains tax breaks.