Structural trends in GST
|Structural trends in GST||1005.78 KB|
This report examines trends in GST receipts relative to the size of the economy over the last twenty years, including the impact of demographic change, and possible trajectories for future GST collections.
The analysis finds that although the GST was originally promoted as a ‘growth tax’, it has not kept pace with economic growth over the last twenty years, reflecting four key historical trends affecting the GST-to-GDP ratio: unequal price growth, the way household consumption is measured when calculating economic activity, demographic trends, and the composition of the economy.
The report includes medium term projections for future GST collections against three different scenarios. These suggest that if current trends continue, the GST-to-GDP ratio is likely to continue to decline further, reaching 3.2 per cent in 2030–31; equivalent to a shortfall of up to $24 billion compared to the early 2000s.