The GST will not be raised

Good!

DEPUTY Liberal leader Julie Bishop has ruled out accepting Treasury advice to expand the GST or re-index the fuel excise, as former treasurer Chris Bowen claimed the department “never” advised him to increase the consumption tax.

Treasury secretary Martin Parkinson last night warned that Australia must be prepared for a recession in the next decade and cannot rely on rising income taxes to restore budget health.

Dr Parkinson, whose term as Treasury secretary has been extended by Tony Abbott for six months to the end of the year, also argued for increases in the GST to ease the burden on personal and company income taxes.

So the question remains, why is Martin Parkinson being kept around till November? Is there really no one the Coalition can think of to put in his place? It is a worry that Treasury, as in all departments, promote clones of the people at the top so where are they going to find someone who has a feel for the private sector. Still, Peter Costello was Treasurer as recently as 2007 so there must be some plant of his that has grown into the job and can be put into this slot

Parkinsons’s disease

If you keep a Keynesian as Treasury secretary you are going to get Keynesian advice. If you take advice from a Keynesian, you will never get the economy working properly again.

I have just seen this story at Andrew Bolt and it is a report of a speech given by the Treasury Secretary, Martin Parkinson, on what the government needs to do. Here is how it starts.

Treasury boss Martin Parkinson says the goods and services tax will have to be boosted or broadened if the budget is to have any hope of returning to surplus.

He must be from the same school of advisors who told the first President Bush to break his “no new taxes” promise. Paying for public service waste with higher tax revenues is both an economic loser and even worse, a political loser.

Stop fixating on the deficit. Do the specific things that make the economy work better. Lower public spending. Reduce regulation. Fix up IR. Encourage private industry in every way you can.

If you start raising taxes you will be out on your ear at the next election.