Spooner again

The Age cartoonist John Spooner returned to climate policy this weekend. I won’t have go at Spooner as I did after last weekend’s effort but I will discuss his theme. Spooner maintains that the carbon tax and GST double up, giving the example of a little boy with his lawyer trying to avoid a shopkeeper double taxing his chocolate. What Spooner is doing here – to put a generous point on it – is to reflect what many people are thinking.

So how realistic is this scenario? On Friday, the Minister for Climate Change Greg Combet and the assistant treasurer David Bradbury issued a joint statement that GST does not apply to the $23 per tonne price of permits. This avoids double taxation where GST is charged on GST (which they shouldn’t be anyway). Where permits are given free, the prices will not be carried through, limiting its effect. I can’t see however, that GST won’t be levied on general goods and services as reported here. But these numbers will be comparatively small.

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