See-To: Guan Eng’s call to follow Australian GST model simplistic

The Barisan Nasional Strategic Communications unit’s deputy says making populist and selective statements is easy but the reality is much more complicated.

(FMT) – The Barisan Nasional’s strategic communications (BNSC) unit has described Penang Chief Minister Lim Guan Eng’s call for Putrajaya to return to each state half of the goods and services tax (GST) collected from them as being simplistic.

Its deputy director, Eric See-To, said the DAP secretary-general’s suggestion to follow Australia’s example to return part of the GST collection to the states did not take into account other variables.

“There is a danger in making simplistic statements such as this without considering other factors.”

He said Australia’s GST rate was 10% compared to the 6% imposed in Malaysia since the tax was introduced in April 2015.

“Australia’s personal tax rate is also much higher,” he said in a statement today.

“Australia starts taxing residents when their salaries are just A$1,500 (RM4,700) per month at a rate of 19%, versus 0% for those whose income is RM4,000 per month or less in Malaysia,” he said.

See-To also said Australia’s personal tax rate rose to 37% for middle-income earners while in Malaysia it only went up to 24% for the same category.

He added that Australia’s highest earners were taxed at 45% compared with the 28% taxed in Malaysia.

Also, Australia’s company taxes were 27.5% for small and medium-scale enterprises (SMEs), compared with 17% in Malaysia, and 30% for larger companies compared with 24% imposed by Malaysia, he added.

“Making populist and selective statements is easy but the reality is a lot more complicated than that,” See-To said.

“If Guan Eng was an opposition politician in Australia, he would probably be claiming that Australians are badly oppressed and struggling to survive while the country is going bankrupt as Australia’s household debt to GDP ratio is 125%,” he added.

In a statement yesterday, Lim had said that Penangites contributed RM5.56 billion in GST between 2015 and October this year, but not a single sen was returned to the state.

“To return 50% of the GST is reasonable because in Australia, all the GST contributed would be refunded 100% to the respective states by its government,” he said.