Recent cuts to public spending clearly demonstrate the inadequacy of the current tax take. The new proposals will merely exacerbate this deficiency by paying out more in income tax cuts than will be collected through increases in consumption tax. Revenue collected through a GST is proposed to be paid straight to the states on the proviso that they abolish a number of their own taxes. Essential areas such as health, education and community services will again come under threat. The proposal to tax all except a very limited number of services will have its largest impact on women, who are both the major users and majority employees in the services industry.
Figures show that the services industry is the fastest growing sector in the Australian economy.
Imposition of a tax on services will adversely affect employment within the industry. The government acknowledges that a tax on labour reduces the ability of small business to increase employment, yet this is exactly what a tax on services equates. At the same time as the government is calling on the states to abolish payroll taxes they are proposing themselves to introduce a new labour tax on services. If small business is to be looked to as a potentially large employer there must be assistance rather than hindrance in its ability to employ additional staff and offer quality services. A tax on services will also adversely women's ability to take part in all areas of public life, particularly the paid labour market.