Secret plan for inquiry into GST

THE Fraser government drew up a secret plan to begin work on a goods and services tax in its first year of office.

BEST not tell the voters, but the Fraser government drew up a secret plan to begin work on a goods and services tax in its first year of office.

Treasurer Philip Lynch won cabinet approval on July 21, 1976, to authorise the Commissioner of Taxation to consult with business about the design of a new broad-based indirect tax. The most interesting aspect of this move was Mr Lynch's recommendation to cabinet that the public be kept in the dark. He said in his submission there were two options to kick-start consideration of a GST.

"We could authorise the commissioner to make the inquiries without any advance announcement being made," he wrote. "As there would be discussions with industry groups, we would no doubt be asked at some stage what was behind it. We could have a press release ready for that event, explaining that the government has the indirect tax system under review, and that in the course of the examination the commissioner is discussing some practical questions with various groups."

The other option was to be up-front. "The alternative would be to make such an announcement first, in the budget speech, and authorise the commissioner to begin his inquiries immediately after that. The drawback of this course is that it tends to overemphasise the importance of the inquiries - they will only be a step towards cabinet's consideration of a broad-based indirect tax. I therefore prefer the other course."

However, the Fraser government never quite found the courage to go for a GST.