GST rise would add $900m to the cost of Christmas: Labor

Dampener: Christmas shopping will lose some of its pleasure next year if the GST is raised. Photo: Glenn Hunt Opposition Leader Bill Shorten visits the Sydney Markets to discuss the GST, on Friday. Photo: Alex Ellinghausen

You’d better watch out: Christmas could cost Australians an extra $900 million if the Turnbull government jacks up the GST.

The average Australian would be charged about $56 more – regardless of whether they’ve been naughty or nice – for festive season spending on gifts, travel, food and Boxing Day sales if the government brings in a broadened 15 per cent GST.

Labor has made the calculations based on Commonwealth Bank festive spending analysis from last year, which estimated Australians spent close to $1100 each on Christmas-related things  each between December 1 and early January.

Consumers in NSW spend the most on Christmas, dropping about $1340 extra – meaning they would be whacked about $70 in added GST.

Consumers in Victoria were roughly in line with the national average.

Overall, Australians spent an estimated $18 billion on Christmas last season – $7.5 billion in NSW and $4.4 billion in Victoria. Gifts accounted for more than $7 billion of the national total.

Labor has also applied a GST increase on a modest family lunch, predicting a $30 jump in costs.

A lunch that includes a leg of lamb, some turkey and prawns, coleslaw, salad, pudding and custard – along with a slab of VB, a couple of bottles of wine and some soft drink – would go from $266 to $297 based on the prices contained in a recent Coles catalogue.

Opposition Leader Bill Shorten said a GST increase would make it much harder for Australians already struggling to make ends meet to bring some Christmas cheer to their families.

“It means higher costs of gifts for loved ones and travel to see friends and family. And 15 per cent more on the cost of ham, pudding and the turkey with all the trimmings,” he said.

“Australians shouldn’t have to sit at Christmas lunch this year worrying about how much more expensive next year’s Christmas will be because of a government full of GST Grinches.”

A GST increase is still on the table after Prime Minister Malcolm Turnbull and Treasurer Scott Morrison met their state and territory counterparts for COAG talks on Friday.

The government maintains people would be compensated for any rise in the GST, possibly through income tax cuts. But it insists it hasn’t made any tax reform decisions.

The Parliamentary Budget Office released modelling last week showing the government could raise between $4.8 billion and $49.3 billion in extra revenue a year depending on which GST scenario it decided to pursue.

But recent Labor polling has again highlighted the difficulty of selling a GST increase to the public.

It found 48 per cent of voters thought they would be much worse off or somewhat worse off with a GST rise, even if it was coupled with income tax cuts. Just 15 per cent of people thought they would be better off.

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