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The most basic question for tax reform is 'how much money does the government need to raise?'

According to the Australian Catholic Social Justice Council, which met with the Senate Committee on a new tax' system, when governments fail to raise sufficient revenue, reduced services to lower and middle income groups are likely to result.

The delegation told the Senate Committee it is doubtful that the Government has actually made a convincing case for a GST. Further:

  • it has advanced proposals for a GST on the basis of non-revenue-neutrality;
  • it has combined the proposal with extremely unfair changes to the direct income tax schedules;
  • it has done nothing to reduce wasteful tax expenditures, and
  • it has done nowhere near enough to close down tax avoidance mechanisms.

Bishop Kevin Manning, who led the delegation, said that the Catholic Bishops and their agencies were involved in the tax reform debate because the issues are linked to matters of morality and justice.

'As Chairman of the Australian Catholic Social Justice Council I want to make it very clear that the Church has a right and a duty to be involved in these questions. The desire to promote the common good and distributive justice, and a special concern for those who are the poorest and most marginalised in our community are at the heart of our comment on tax reform', he said.

Dr Tim Battin, also a member of the delegation with secretariat chief executive officer Sandie Cornish and Council member Chris Keating, told the hearing that while the ACSJC is not opposed to tax reform, it believes that the Government's proposals would not only fail to address problems of unfairness and inequity, but would actually add to them.

'The Government's present proposals violate the principles of progessivity and ability to pay', he said.

Chris Keating told the hearing the ACSJC believes that wherever possible economic and social policy should not be devised such that compensation is necessary to address its inequitable effects. 'I am concerned about the adequacy of the compensation in the short term, let alone over the medium to longer term.'