❓ Mr. Norberger questions the Premier on potential benefits from proposed GST changes, prompted by the Prime Minister's commitment to address WA's inadequate share. The Premier highlights the unfair distribution and its impact on WA's finances and population.
AnsweredQoN 491Legislative Assembly
QuestionView source ↗
GOODS AND SERVICES TAX — PRIME MINISTER'S
COMMENTS
491. Mr J. NORBERGER to the Premier:
Thank you, Mr Speaker —
Several members interjected.
The
SPEAKER : That question is finished.
Mrs
M.H. Roberts interjected.
The
SPEAKER : Member for Midland, I call you to order for the first time.
Mr
J. NORBERGER : I was delighted to see the Premier secure an undertaking from
the Prime Minister to address WA's woefully inadequate share of GST.
Could the Premier please update the house on the potential benefits the
proposed changes will deliver?
Several members interjected.
The
SPEAKER : Member for Joondalup, I call you to order for the first time.
Member for West Swan, I call you to order for the first time. Member for
Butler, I call you to order for the first time.
Mr
J. Norberger interjected.
The
SPEAKER : Member for Joondalup, I call you to order for the second time. You
have finished your question.
COMMENTS
491. Mr J. NORBERGER to the Premier:
Thank you, Mr Speaker —
Several members interjected.
The
SPEAKER : That question is finished.
Mrs
M.H. Roberts interjected.
The
SPEAKER : Member for Midland, I call you to order for the first time.
Mr
J. NORBERGER : I was delighted to see the Premier secure an undertaking from
the Prime Minister to address WA's woefully inadequate share of GST.
Could the Premier please update the house on the potential benefits the
proposed changes will deliver?
Several members interjected.
The
SPEAKER : Member for Joondalup, I call you to order for the first time.
Member for West Swan, I call you to order for the first time. Member for
Butler, I call you to order for the first time.
Mr
J. Norberger interjected.
The
SPEAKER : Member for Joondalup, I call you to order for the second time. You
have finished your question.
AnswerView source ↗
I thank the member for the question
and I also thank the Prime Minister—the first Prime Minister to take a strong
position on the GST. Aren't the actions of the Prime Minister, Malcolm
Turnbull, this weekend in sharp contrast to Bill Shorten, who said he would do
nothing about the GST—nothing at all?
Several members interjected.
The
SPEAKER : Members!
Mr
C.J. BARNETT : Aren't they upset, Mr Speaker.
Can I just briefly state the
situation. Any fiscal measure should be judged on its fairness and its
economics. In the matter of fairness, I think it is an overwhelming case. Western
Australia, as everyone knows, gets back just 30 cents in the dollar. The big
states—New South Wales and Victoria—both get back about 90 cents
in the dollar, and Queensland, for some reason, gets $1.17, South Australia
$1.41, Tasmania $1.77 and the Northern Territory $5.28. WA loses this financial
year $4.7 billion in GST. That should be of concern to every Western Australian.
In dollar terms this is perhaps even more striking.
Ms
S.F. McGurk interjected.
The
SPEAKER : Member for Fremantle!
Mr
C.J. BARNETT : When the GST came into place in 2001, Western Australia in
the first year received —
Ms
M.M. Quirk interjected.
The
SPEAKER : Member for Girrawheen, thank you.
Ms
M.M. Quirk interjected.
The
SPEAKER : Member for Girrawheen!
Mr
C.J. BARNETT : In the first year, 2000–01 —
Ms
M.M. Quirk interjected.
The
SPEAKER : Member for Girrawheen, I did not want to call you, but now I will
call you to order for the first time.
Mr C.J. BARNETT : In that first year, Western Australia received $2.375 billion.
Sixteen years later, we received $2.035 billion—actually less in dollar
terms. In the meantime, the GST pool of money had grown from $24 billion to $60
billion, and our dollars actually went down. In the meantime, the population of
Western Australia —
Several
members interjected.
The SPEAKER : Member for Butler, I call you to order for the second time. Member
for Victoria Park and member for Kwinana, you are lucky the member for Butler
drowned you out!
Mr C.J. BARNETT : Not only did the GST pool go up from $24 billion to $60 billion and
the dollars WA received actually fall, at the same time the population of Western
Australia rose from 1.87 million people to 2.6 million people—another
730 000 people to educate and look after their health. That is the outrage of
it. That is the fairness case—overwhelmingly unfair to the people of
this state.
Several
members interjected.
The SPEAKER : Members!
Mr C.J. BARNETT : Let me look at the history.
Several
members interjected.
The SPEAKER : Members!
Mr C.J. BARNETT : We know the Labor Party does not care about equity for Western Australians;
we know it does not care. We know the Labor Party is irrelevant because its
federal leader said he did not care, effectively, and he would do nothing about
it. The Labor Party is irrelevant to this issue.
A
lot of the debate around the country states that Western Australia benefited in
the past. Yes, post-Federation we did benefit as part of tariff compensation,
and we were a relatively poor state. But the discrimination between states has
never been anywhere near the scale it is today. If we go right back to the
start of uniform taxation during the Second World War, the lowest share, if you
like, on the equivalent in terms of relativities was Victoria in 1942, which
received the equivalent of 68 cents in the dollar. Under the GST from 2000 on,
the lowest share was New South Wales at 84c in 2005. We are at 30c. There is no
precedent either way for what has happened to Western Australia. Can I conclude:
the fairness thing, the inequity and the breakdown of the GST in the
Commonwealth Grants Commission process is self-evident. The decision on
distribution is not up to the states. The states have a role. The states'
approval, universal approval, is required to change the rate in the GST or the
coverage of the GST—for example, to fresh food—but the
distribution is the responsibility of the federal Treasurer alone on the advice
of the grants commission.
There
is one other point I want to make and that is the economic case. When the GST
was introduced, it was because of tax reform—that Australia was too
reliant on direct income taxes, a lack of incentive. The GST allowed an
indirect tax to make us more internationally competitive in line with other
OECD nations. John Howard had the inspiration to make that change to the tax
system to allocate the revenues from the GST and give them to the states, and
in return the states gave up their rightful share of income tax collections. It
was a swap and it would give the states a stable growth source of revenue. It
has not worked out that way; it has failed economically because of the grants
commission process. Malcolm Turnbull recognises the tax is unfair and that it
fails Australia economically. The commitment is that when Western Australia's
share rises above a floor level—I have advocated 75c; it might be 70c—it
will be implemented for all states; so Western Australia, and no other state,
will face that. The objective of the Prime Minister is to have that system in
place this year.
and I also thank the Prime Minister—the first Prime Minister to take a strong
position on the GST. Aren't the actions of the Prime Minister, Malcolm
Turnbull, this weekend in sharp contrast to Bill Shorten, who said he would do
nothing about the GST—nothing at all?
Several members interjected.
The
SPEAKER : Members!
Mr
C.J. BARNETT : Aren't they upset, Mr Speaker.
Can I just briefly state the
situation. Any fiscal measure should be judged on its fairness and its
economics. In the matter of fairness, I think it is an overwhelming case. Western
Australia, as everyone knows, gets back just 30 cents in the dollar. The big
states—New South Wales and Victoria—both get back about 90 cents
in the dollar, and Queensland, for some reason, gets $1.17, South Australia
$1.41, Tasmania $1.77 and the Northern Territory $5.28. WA loses this financial
year $4.7 billion in GST. That should be of concern to every Western Australian.
In dollar terms this is perhaps even more striking.
Ms
S.F. McGurk interjected.
The
SPEAKER : Member for Fremantle!
Mr
C.J. BARNETT : When the GST came into place in 2001, Western Australia in
the first year received —
Ms
M.M. Quirk interjected.
The
SPEAKER : Member for Girrawheen, thank you.
Ms
M.M. Quirk interjected.
The
SPEAKER : Member for Girrawheen!
Mr
C.J. BARNETT : In the first year, 2000–01 —
Ms
M.M. Quirk interjected.
The
SPEAKER : Member for Girrawheen, I did not want to call you, but now I will
call you to order for the first time.
Mr C.J. BARNETT : In that first year, Western Australia received $2.375 billion.
Sixteen years later, we received $2.035 billion—actually less in dollar
terms. In the meantime, the GST pool of money had grown from $24 billion to $60
billion, and our dollars actually went down. In the meantime, the population of
Western Australia —
Several
members interjected.
The SPEAKER : Member for Butler, I call you to order for the second time. Member
for Victoria Park and member for Kwinana, you are lucky the member for Butler
drowned you out!
Mr C.J. BARNETT : Not only did the GST pool go up from $24 billion to $60 billion and
the dollars WA received actually fall, at the same time the population of Western
Australia rose from 1.87 million people to 2.6 million people—another
730 000 people to educate and look after their health. That is the outrage of
it. That is the fairness case—overwhelmingly unfair to the people of
this state.
Several
members interjected.
The SPEAKER : Members!
Mr C.J. BARNETT : Let me look at the history.
Several
members interjected.
The SPEAKER : Members!
Mr C.J. BARNETT : We know the Labor Party does not care about equity for Western Australians;
we know it does not care. We know the Labor Party is irrelevant because its
federal leader said he did not care, effectively, and he would do nothing about
it. The Labor Party is irrelevant to this issue.
A
lot of the debate around the country states that Western Australia benefited in
the past. Yes, post-Federation we did benefit as part of tariff compensation,
and we were a relatively poor state. But the discrimination between states has
never been anywhere near the scale it is today. If we go right back to the
start of uniform taxation during the Second World War, the lowest share, if you
like, on the equivalent in terms of relativities was Victoria in 1942, which
received the equivalent of 68 cents in the dollar. Under the GST from 2000 on,
the lowest share was New South Wales at 84c in 2005. We are at 30c. There is no
precedent either way for what has happened to Western Australia. Can I conclude:
the fairness thing, the inequity and the breakdown of the GST in the
Commonwealth Grants Commission process is self-evident. The decision on
distribution is not up to the states. The states have a role. The states'
approval, universal approval, is required to change the rate in the GST or the
coverage of the GST—for example, to fresh food—but the
distribution is the responsibility of the federal Treasurer alone on the advice
of the grants commission.
There
is one other point I want to make and that is the economic case. When the GST
was introduced, it was because of tax reform—that Australia was too
reliant on direct income taxes, a lack of incentive. The GST allowed an
indirect tax to make us more internationally competitive in line with other
OECD nations. John Howard had the inspiration to make that change to the tax
system to allocate the revenues from the GST and give them to the states, and
in return the states gave up their rightful share of income tax collections. It
was a swap and it would give the states a stable growth source of revenue. It
has not worked out that way; it has failed economically because of the grants
commission process. Malcolm Turnbull recognises the tax is unfair and that it
fails Australia economically. The commitment is that when Western Australia's
share rises above a floor level—I have advocated 75c; it might be 70c—it
will be implemented for all states; so Western Australia, and no other state,
will face that. The objective of the Prime Minister is to have that system in
place this year.
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