Key takeaways
- •The Grattan Institute's October 2026 report recommends lifting the goods and services tax from 10% to 15% and extending it to all food, but the federal government has said a rise is not on its agenda.
- •For a company already behind on its goods and services tax, the cost that matters today is the Australian Taxation Office's general interest charge: 11.51% a year for October to December 2026, compounding daily.
- •General interest charge incurred on or after 1 July 2025 can no longer be claimed as a tax deduction, and it keeps accruing while a company is on an ATO payment plan.
- •Quarterly lodgers have a July to September 2026 business activity statement due on 28 October 2026, and the tax it reports adds to anything still owed from earlier quarters.
- •A Secured Lending short-term business loan, from $250,000 and secured by a first or second mortgage over real property, can give a company the funds to pay the ATO in full, and can settle within 24 hours.
- •A Secured Lending loan to clear an ATO debt runs for 1 to 24 months, usually 3 to 6 months, and is repaid through a defined exit agreed before settlement, such as a bank refinance or a property sale.
The idea of a bigger goods and services tax is in the news. The Grattan Institute has recommended lifting the rate from 10% to 15% and applying it to all food, and the call was reported on 19 October 2026. It helps to keep it in perspective: this is a think tank's recommendation, not a change to the law, and the federal government has said a rise is not on its agenda.
For a business owner, the more pressing question is closer to home. If your company is already behind on the tax from earlier quarters, the policy debate does not change what it owes. What does change that figure, every day, is the interest the Australian Taxation Office charges on it.
That is where we can help. A short-term loan secured by property can give your company the funds to pay the ATO in full, and quickly. We lend our own funds, we can usually tell you within hours whether we can proceed, and we can settle within 24 hours. The money is paid to your company, your company pays the ATO, and the loan is repaid through an exit agreed at the start, such as a refinance with your bank or the sale of a property.
What the Grattan Institute proposed, and where it stands
The proposal comes from the Grattan Institute's report Budget reboot: How to fund Australia's future, published in October 2026 with Aruna Sathanapally as lead author. Its argument is that a larger goods and services tax would let governments shift tax away from personal income and towards consumption.
The change would come in two steps. First, the federal government would scrap the special deal on the tax that it made with Western Australia in 2018. Then it would lift the rate to 15% and extend the tax to all food. Grattan estimates this would raise about $76 billion a year, with about $58 billion of that going to income tax cuts for low and middle income earners and to higher welfare payments.
Grattan is not alone. As the Australian Associated Press reported on 19 October 2026, several prominent economists have also called for a higher rate. The federal Labor government, however, has said it is not on its agenda. For now the tax remains 10% on most goods and services, as the ATO explains on its page on how the goods and services tax works.
What the tax your company already owes is costing
The ATO asks businesses to set aside the tax they collect on sales, so the money is there when the bill falls due. When that money goes on wages, suppliers or rent instead, the unpaid amount becomes a debt to the ATO, and the general interest charge is added for as long as it remains unpaid after the due date.
For October to December 2026, that charge is 11.51% a year, a daily rate of 0.03153425%, according to the ATO's general interest charge rates table. The rate is reset every quarter, and three things about it matter if your company is behind:
- •It compounds daily, so the balance on the day you pay will be higher than the figure on the last ATO letter.
- •General interest charge incurred on or after 1 July 2025 can no longer be claimed as a tax deduction.
- •A payment plan does not stop it. The ATO's small business newsroom article on interest on ATO debt says the charge still accrues on a plan, which is why the ATO asks for plans to run over the shortest possible time.
The same article encourages businesses to pay as soon as they can, because that reduces the interest, and to talk to a registered tax professional. It adds: "Their advice may include a business loan, as some interest on loans connected with running a business may be eligible for a tax deduction." How the interest on any loan is treated for tax is a question for your accountant. We are a lender, and we do not give tax advice.
There is also a deadline close at hand. The business activity statement for July to September 2026 is due on Wednesday 28 October 2026, according to the ATO's page on due dates for lodging and paying your BAS, although a company that lodges online or through a registered tax or BAS agent may have extra time. Either way, the tax for that quarter is added to whatever is still owed from earlier quarters.
If your company has been paying the ATO by credit card, that option remains for now. The ATO had planned to stop accepting credit cards after 30 November 2026, but on 9 October 2026 it extended credit card payments until 30 June 2027.
If the rate did rise
The 15% rate is only a proposal, so this section sets out what the Grattan recommendation would mean if it were adopted, not a forecast. The first change is simple: a larger share of every taxable sale would be tax that your company collects and holds for the ATO.
The second change would affect food businesses most. Today most basic food is free of the tax, and a business can still claim credits for the tax included in the purchases it uses to make those sales, as the ATO explains on its page on goods and services tax free sales. Under the proposal, a grocer, butcher or baker selling mostly basic food would start charging the tax on those sales too.
Neither change would alter what your company owes for quarters it has already reported. Pricing, invoicing and how any future change would apply to your business are questions for your accountant. The cost you can act on this month is the interest on the debt you have now.
How a short-term loan clears the debt
A Secured Lending loan gives your company the funds to pay its ATO debt in full, in one payment. Your company is the borrower, the funds are paid to it at settlement, and it then pays the ATO itself. Once the debt is paid, the general interest charge stops accruing on it.
The loan is secured by a first or second mortgage over residential, commercial or industrial property. That might be the commercial or industrial property your company owns, a director's home or investment property, or property held in a company or a trust. The main terms are:
| Who can borrow | Companies, including a company acting as trustee. We do not lend to individuals or sole traders |
| Loan size | From $250,000 |
| Interest rates | From 9.7% p.a. for tax debt loans. The written offer sets out the full cost |
| Loan-to-value ratio | Up to 70% of the property's value, across all loans on the property |
| Term | 1 to 24 months, usually 3 to 6 months |
| Speed | A decision in hours, and settlement possible within 24 hours |
One loan can pay goods and services tax, income tax, other activity statement debts and superannuation guarantee charge together, as long as the total stays within 70% of the property's value. A live ATO debt on its own is not a reason for us to decline, and we can still lend after a garnishee notice, a director penalty notice or a statutory demand has arrived. If one of those notices already has a date on it, our page on a short term loan to pay an ATO debt before a garnishee, director penalty notice or wind-up deadline covers that timetable.
One practical point: size the loan to the ATO balance on the day your company will pay, not the figure on an older letter, and include every overdue ATO account. If the problem is a tax bill falling due before the cash to pay it arrives, our article on bridging finance for goods and services tax liabilities covers that situation.
How the loan is repaid
The exit is agreed before settlement, so everyone knows from the start how the loan will be repaid: for example, a refinance to a bank once the ATO debt is cleared, or the sale of a property. When the loan is repaid, our mortgage is discharged from the title.
If you would like to see the numbers, our worked example of clearing a $250,000 ATO debt with a property refinance takes one illustrative property through the 70% calculation, a first or second mortgage, the monthly interest and the exit.
Case study: $1.15 million to pay an ATO debt for a pub operator
An experienced publican needed to pay an outstanding ATO debt for a pub in Melbourne's inner south. A bank had already issued a letter of offer, but it could not settle in time to meet the ATO payment.
The publican offered an investment property in Prahran, valued at approximately $2 million, as security. We issued indicative terms within 2 hours of the enquiry and lent $1,150,000 on a first mortgage over that investment property at a loan-to-value ratio of approximately 58%. The loan settled within 4 business days, and the ATO debt was paid in full.
The planned exit was the bank refinance, on a three-month minimum term. In the end the refinance completed early, and the loan was repaid in full during the second month.
Frequently asked questions
Is the goods and services tax going up to 15%?
No change has been made. The Grattan Institute has recommended a 15% rate that would include all food, and the federal government has said a rise is not on its agenda. The rate today is 10%.
Would a higher rate increase the goods and services tax my company already owes?
The proposal is about the rate on future sales. What increases your company's existing debt each day is the general interest charge, at 11.51% a year for October to December 2026. Your accountant can confirm how any future change would apply to your company.
Does an ATO payment plan stop the interest?
No. The general interest charge still accrues on the amount owed while a payment plan runs, and since 1 July 2025 it can no longer be claimed as a tax deduction.
My company owes last quarter's goods and services tax and the next statement is due on 28 October. Can one loan pay both?
Yes. One loan can give your company the funds to pay every overdue ATO account and the amount due on the new statement, as long as the total stays within 70% of the property's value.
Can my home secure a loan for my company's goods and services tax debt?
Yes. Your company is the borrower, and a director's home or investment property can secure the loan. The loan funds are paid to your company, which then pays the ATO.
How Secured Lending Can Help
If your company is carrying goods and services tax from earlier quarters, we would be glad to help it clear the debt so the general interest charge stops accruing. Our loan gives your company the funds to pay the ATO in full, secured by property your company or a director already owns, and it is repaid through an exit agreed at the start, such as a bank refinance or a property sale.
Speed is what makes a private loan suit a tax debt. We lend our own funds and our in-house team values the property, so nothing waits on an outside valuer or another funder. In most cases we decide within hours, issue a letter of offer as soon as terms are agreed, and can settle within 24 hours.
To get started, it helps to have three things to hand:
- •The ATO statement of account, and any notice your company has received, with its date.
- •The property that could back the loan, its estimated value and any existing loan on it.
- •How your company plans to repay the loan, and roughly when.
Call us on 1300 795 175 to talk it through, or send the details through and we will come back to you. Your accountant is welcome to call us too.
