Malcolm Turnbull (Wentworth, Liberal Party, Prime Minister) Share this | Hansard source

that imposes the least break on economic activity—so, it distorts economic activity as little as possible.

Some taxes, such as transaction taxes—like stamp duties—are obviously very distorting because they discourage trade. That is why years ago the states took off the stamp duty on share transactions—the stamp duty there. And, of course, the very large stamp duties on property transactions discourage trade in real estate transactions. Income tax, which is progressive, is very important, because it is the largest source of revenue. Also, because of it being progressive, it means that the burden of tax is carried disproportionately in accordance with income. So those with the highest incomes pay more of the tax, because they can best afford it. That is understood.

The GST itself is a very efficient tax. It is widely regarded as such, and is regarded as such by just about any economist and, of course, just recently by the OECD. The problem with the GST, of course, is that it affects households with lower incomes—

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