16 Feb 2010

Australian business calls for GST review

1:44 pm on 16 February 2010

The Business Council of Australia (BCA) says a review of the nation's tax system should have included an examination of the GST rate.

The criticism comes just a week after New Zealand Prime Minister John Key promised personal income tax cuts across the board, which could be funded by raising GST from 12.5% to 15%.

The BCA, which represents the Australia's top 100 companies, says it's a mistake that Treasury Secretary Ken Henry's tax review will not address GST when it is released shortly.

The council's chief economist, Peter Crone, says a bold reform of the tax system is needed, and GST should be put back on the table.

Mr Crone told the ABC the tax system in place in Australia at the moment acts on a drag on the economy and distorts savings and investment decisions.

The BCA has pointed to research saying that consumption tax is one of the less distortionary taxes, and property tax is the least distortionary, he says.