John Murphy (Lowe, Australian Labor Party, Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

True to form, the Howard government is all too willing to criticise Labor state governments on Australia’s taxation quagmire while ignoring its own failure to address the underlying issues causing problems in our flawed fiscal system. It is a given that there is a serious imbalance between the states’ revenue raising powers and expenditure responsibilities. It is beyond doubt that the Howard government is taking away more money from the Australian taxpayer than any other government in our history, yet it all too happily points the finger at every other Australian government—this time the Western Australian government—in its usual exercise in cynical political opportunism.

What about its own contribution to the flaws in Australia’s taxation system? When one scratches the surface, it becomes apparent that the federal government is neck deep in responsibility for the hardship faced by the ordinary Australian taxpayer. The Treasurer has raked in tens of billions of dollars more each year in revenue since the Howard government came to office in 1996. When people pay their taxes, there is an expectation that they will obtain a return that is spent on hospitals, roads and schools in a manner that is rational and justified by statistical and economic analysis—yet the Howard government has continued to take funds away from the states and to reallocate them according to an anachronistic formula that not even the Grants Commission properly understands. Worse still, while all too willing to point the finger at the Western Australian government about the tax burden, the Howard government has failed to own up to taking billions of dollars out of that state and sitting on a healthy surplus until such time as it can pork-barrel marginal seats Australia wide in the run-up to the next election.

How does this address the tax burden being faced by Western Australians? While the Howard government raises billions of dollars, it is still failing to fulfil its basic service obligations. All the while, state governments have substantial line responsibilities but do not have their own revenue sources to fund these responsibilities. They are beholden to flawed fiscal transfers from the Howard government, which controls most of the notional tax base for the additional revenue needed to fund their responsibilities.

We are in this chamber today to discuss such things as Western Australia’s mortgage duty and rental duty. Why are we not discussing matters this government can control, such as the imbalance between expenditure on services, infrastructure and revenue provided to the states? Why are we not discussing the Howard government’s failure to address Australia’s severe skills shortage, which is undermining the ability of the states, including Western Australia, to continue their path towards sustained economic growth and prosperity?

Like never before, we are seeing increased cost-shifting towards the states while the Howard government remains in complete denial about the increasing levels of expenditure required. While the Howard government is willing to ride on the coat-tails of Western Australia’s economic growth, it has failed to recognise all of the costs that the Western Australian government has incurred in supporting this development. The Howard government has derived large company tax revenues from Western Australia’s strong resources sector, as well as rent taxes from oil and gas extraction off the state’s coast, yet it denies that Western Australia is bearing an onerous cost to support these resource developments.

Now the Howard government is failing in the one duty it does have, which is to provide the skilled workers to ensure that this resources boom—which it is taking for granted—continues. To move a motion in this House that is critical of the Western Australian government while ignoring the failure of the federal government on a wide variety of matters is breathtaking and hypocritical in the extreme. Never has a federal government put such a squeeze on the states and never has the future prosperity of this nation been placed under such threat by the wilful ignorance of a Commonwealth government. The member for Fraser pointed out again in this House today that this government is the highest taxing government since Federation.

All the while, Australian taxpayers are doing it tougher by paying huge levels of Commonwealth taxes while seeing services suffer because the money is either sitting in consolidated revenue waiting for a pork-barrelling session or being redirected according to an 80-year-old formula that should no longer carry much weight. Despite paying $13 billion in GST, residents in my home state of New South Wales are receiving only $10 billion back. That is $3 billion less in services and infrastructure than the people of New South Wales deserve.

We know the Howard government is sitting on huge surpluses. The Treasurer is sitting on money that belongs to the people of New South Wales; it is not his own. The dysfunctional nature of state-federal arrangements is putting each state under enormous pressure and is grossly unfair to the long-suffering taxpayer. The lack of leadership shown by the Treasurer and the Howard government on reforming Australia’s fiscal system is appalling. I condemn the motion. Parliament’s time would be better utilised in debating the government’s disgraceful media reform agenda, which is all about massively concentrating media ownership in Australia and handing over our democracy to Australia’s two biggest media companies, and that is a bloody disgrace.

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