This proposal has three options.

Option 1: Personal income tax, company tax, and excise and customs duty

This option has three components:

• Personal income tax changes
  • increase the tax-free threshold to $40,000
  • reduce the marginal tax rate for taxable income above this threshold to 20 per cent
  • abolish the Medicare Levy, the Medicare Levy surcharge, and the Low Income Tax Offset (LITO)
  • reduce the Fringe Benefits Tax (FBT) rate to 20 per cent.
• Company tax rate reduction
  • reduce the company tax rate to 20 per cent for all companies.
• Abolish excise and customs duties
  • abolish excise on tobacco, alcohol and fuel, and all customs duties on imports.

Option 2: Personal income tax, company tax, excise and customs duty and Goods and Services Tax (GST) on food and beverages

This option includes Option 1, with an additional GST component to apply the GST to all food and beverages.

Option 3: Personal income tax, company tax, excise and customs duty and align the coverage of Australia’s GST with that of New Zealand

This option includes Option 1, with an additional GST component to apply the GST to the same goods and services that are subject to the GST in New Zealand.

The Commonwealth would retain any additional revenue resulting from the GST components of Options 2 and 3.

The proposal would be announced and have effect from 1 July 2017.

The request sought the financial implications to 2026-27.