Carbon tax fairer than GST rise, analysis shows

A Parliamentary Library analysis has found that removing the current exemptions from the GST or increasing the GST to 12.5% would bring in a comparable amount of revenue to the original carbon tax, forecast to reach $29 a tonne, yet it will cost households around three to four times as much. Greens Treasury spokesperson Adam Bandt MP today said this analysis shows that raising revenue through bringing back a price on pollution would be a fairer move for Australian households than any increases to the GST, while also reducing pollution.

"A 12.5% GST would raise a similar amount of new revenue to a $28 per tonne carbon tax, but would cost households around three times as much," Mr Bandt said.

“By extending the GST to the current exemptions like fresh food, education and healthcare, it would raise a similar amount to the original carbon price yet cost households almost four times as much.”

"A 12.5% GST and a carbon price of $28 to $29 per tonne of pollution each raise between $10-$15 billion a year, but the GST costs households $31 per week while the carbon price costs about $11."

“Dollar for dollar, it is fairer to bring back a carbon tax than to lift the GST, and it would cut pollution as well.”

“This research exposes the 'Alice in Wonderland' logic of the Liberals, where a carbon price is a scary 'great big new tax', but a new tax on almost everything we buy is OK.”

"If everything really is on the tax reform table, as the Prime Minister claims, then a price on pollution should be considered."

"The Treasurer's vague suggestion of compensation misses the point. If a higher GST demands much more compensation than a carbon price but both can raise similar amounts of gross additional revenue, it must be better and fairer to go with the carbon price, especially as it will also cut pollution.”

Media contact: Adam Pulford, 0429 109 054

Table 1: Summary of Parliamentary Library analysis on estimated revenue raised and impact on households from a carbon price and changes to the GST*

Carbon price @$23 per tonne

Carbon price @ $27-$29 per tonne

GST at 10% without exemptions

GST at 12.5% with current exemptions

Estimated annual gross revenue

$8.5 billion

$10.58 billion

$14.2 billion

on top of revenue from existing GST in 2015/16

$14.26 billion

on top of revenue from existing GST in 2015/16

Estimated average impact on household expenditure ($ per week)


$10.68 - $11.47 



*This table summarises the key results from Parliamentary Library analysis for a carbon price at $23, $27-28 and $29, a GST at 10% without exemptions and a GST at 12.5% with current exemptions.

The impact on households of the carbon price at $23 is based on CSIRO modelling sourced by the Parliamentary Library. The impact on households of the carbon price at $27 to $29 is based on a formula provided by the Parliamentary Library.

The GST household impacts are based on the NATSEM modelling released last week.

These figures are gross figures and do not take into account any compensation households received under the Clean Energy Future package or any compensation that households may receive from a change to the GST.

**The Parliamentary Library analysis also found that "a comparison of headline revenue figures shows that a carbon price of about $27–28 per tonne CO2-e will bring in comparable revenue to a 10% GST rate with exemptions removed or a 12.5% GST rate" and estimated a carbon price of $28 a tonne would cost households an average of $10.92 per week.