❓ Opposition asks the Premier about his comments regarding GST increases and which states support such a move. The Premier defends his position, focusing on the unfair distribution of GST revenue and advocating for per capita allocation.
AnsweredQoN 549Legislative Assembly
QuestionView source ↗
STATE FINANCES — GOODS AND SERVICES TAX
549. Mr M. McGOWAN to the Premier:
(1) I refer to the Premier's comments on Lateline last week when he said —
So all states are saying actually
GST needs to go up.
Which states, apart from Western
Australia, have called for an increase in the goods and services tax?
(2) I refer to
the Premier's comments on Lateline —
Do Australians really mind that much if the
GST was 10 per cent or 12.5 per cent
Does the Premier still believe that taxes
should increase?
(3) Why does
the Premier believe, according to his comments on Lateline , that Western Australians should pay more just to send
more money east under the GST deal that the Liberal Party signed?
549. Mr M. McGOWAN to the Premier:
(1) I refer to the Premier's comments on Lateline last week when he said —
So all states are saying actually
GST needs to go up.
Which states, apart from Western
Australia, have called for an increase in the goods and services tax?
(2) I refer to
the Premier's comments on Lateline —
Do Australians really mind that much if the
GST was 10 per cent or 12.5 per cent
Does the Premier still believe that taxes
should increase?
(3) Why does
the Premier believe, according to his comments on Lateline , that Western Australians should pay more just to send
more money east under the GST deal that the Liberal Party signed?
AnswerView source ↗
(1)–(3)
As I said before, the issue is the distribution of GST. Those who argue that
this system works well are at fault. The GST distribution through the
Commonwealth Grants Commission is an antiquated process through an institution
that dates back to the 1930s. The signing and introduction of the GST did not
in any way change the Grants Commission or the rules for distributing the
money. All it changed was the pool of money to be distributed that was
previously drawn from income tax and company tax revenues. The GST provided a
different pool of money but the rules for distribution remain as they were, and
they are antiquated. It would be a great service to the Australian public to
abolish the Grants Commission—just get rid of it. That is certainly the
argument that I, and I think maybe some other Premiers, hold. The GST should
simply be allocated on a per capita basis; maybe take several billion dollars
off the top for weaker states such as Tasmania and South Australia. Last year,
the four Premiers of the four big states—New South Wales, Victoria,
Queensland and Western Australia—signed an agreed statement to the
effect that the GST should be transformed over a number of years to be
allocated on a per capita basis. That is what Western Australia wants.
A lot of informal discussion takes place at
Council of Australian Governments meetings. I am not going to name names or
states, but I can assure members that an informal discussion was that some
states say the growth in the GST pool is not enough. One solution is to put
tighter controls on online purchases—that has been a leakage. Another
solution is to get rid of some of the exemptions, particularly relating to
food, which is cumbersome and awkward. Another one might be to raise the rate
of GST. The card that Western Australia holds is that any change will require
Western Australian approval. Western Australia's test will be that we
want the distribution rules changed—that is the card.
As I said before, the issue is the distribution of GST. Those who argue that
this system works well are at fault. The GST distribution through the
Commonwealth Grants Commission is an antiquated process through an institution
that dates back to the 1930s. The signing and introduction of the GST did not
in any way change the Grants Commission or the rules for distributing the
money. All it changed was the pool of money to be distributed that was
previously drawn from income tax and company tax revenues. The GST provided a
different pool of money but the rules for distribution remain as they were, and
they are antiquated. It would be a great service to the Australian public to
abolish the Grants Commission—just get rid of it. That is certainly the
argument that I, and I think maybe some other Premiers, hold. The GST should
simply be allocated on a per capita basis; maybe take several billion dollars
off the top for weaker states such as Tasmania and South Australia. Last year,
the four Premiers of the four big states—New South Wales, Victoria,
Queensland and Western Australia—signed an agreed statement to the
effect that the GST should be transformed over a number of years to be
allocated on a per capita basis. That is what Western Australia wants.
A lot of informal discussion takes place at
Council of Australian Governments meetings. I am not going to name names or
states, but I can assure members that an informal discussion was that some
states say the growth in the GST pool is not enough. One solution is to put
tighter controls on online purchases—that has been a leakage. Another
solution is to get rid of some of the exemptions, particularly relating to
food, which is cumbersome and awkward. Another one might be to raise the rate
of GST. The card that Western Australia holds is that any change will require
Western Australian approval. Western Australia's test will be that we
want the distribution rules changed—that is the card.
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