Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

I have got hold of this report, which was commissioned by the Labor state premiers. It says, ‘If the Commonwealth had been serious about giving the states fiscal autonomy, it would have ensured the states had access to revenue that covered and eventually exceeded the loss of state taxes’—which we did—‘the loss of financial assistance grants’—which we did—‘and specific purpose payments.’ A 10 per cent GST covers the abolition of state taxes and financial assistance grants. But the premiers say that that was not serious enough and that it should have also covered the loss of specific purpose payments. Let me inform the House that specific purpose payments from the Commonwealth to the states are at $29 billion. In order for the GST to cover specific purpose payments, the GST rate will have to increase to 17.2 per cent. That is the report which has been commissioned by the state premiers—a report that says we should have been serious enough to introduce a 17.2 per cent GST to cover specific purpose payments.

Le me make this clear: there is only one way that the GST can be increased in Australia. It can only be increased if every state and territory wants it, if the Commonwealth agrees to it and if it is legislated through the House and the Senate. We now have eight Labor state premiers and chief ministers. If there were an increase in the GST, they would get all of the revenue. They have a very strong incentive for an increase in the GST rate. This government will not agree to any increase in the GST because we believe that the states already have sufficient revenue—which they are not properly accounting for—and we are not going to increase it. But if we had a new federal government with a majority in this House—which it would have by definition—and in the Senate, then that new federal government, with the agreement of the states, could increase the rate of the GST.

You would then have the situation, if the Leader of the Opposition becomes Prime Minister, where you would have an inexperienced Prime Minister with eight premiers and chief ministers, all with a lot more clout and experience than him, putting the weights on him for an increase in GST, which they would get the benefit of. There would be no checks; there would be no balances. I have said in this House before: when the state premiers say ‘jump’, the Leader of the Opposition cannot jump high enough.

Whether it is in relation to royalties demanded by the Western Australian government, whether it is in relation to infrastructure demanded for the Gold Coast by his candidate, Eddy, the other day or whether it is in relation to a whole host of other state demands, the risk of Mr Rudd being Prime Minister is the risk of an inexperienced person being beholden to the demands of eight Labor premiers and chief ministers, who have commissioned a report saying that they believe the GST should give them enough to cover specific purpose payments—and that is a 17.2 per cent GST. This is the risk with an inexperienced Leader of the Opposition becoming an inexperienced Prime Minister: that the Labor Party would be able to have its way—and the Labor Party, in government at every level, would be able to increase the GST.

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