Summary of proposal: 

The proposal contains the following options, comprising changes to the Goods and Services Tax (GST).

Option 1: Increase the GST rate from 10% to 15%.

Option 2: Increase the GST rate from 10% to 15% and remove GST exemptions on: 

    i. food 

    ii. education 

    iii. health and childcare services (including pharmaceuticals, private health insurance, medical and health services, residential care, and community services)

    iv. water and sewerage.

Option 3: Increase the GST rate from 10% to 15% and provide each adult (18+ year-old) Australian citizen and provide permanent residents with a $20,000 annual ‘GST-free threshold’ on which 0% GST is charged. 

Changes to budget balances as a result of the proposal will impact the commonwealth budget – they would not be passed on to the state and territory budgets.

Distributional analysis of the impact of Options 1 and 2 on different quintiles of the income distribution. 

This proposal is ongoing and would begin on 1 July 2026.