Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Hansard source

Yes, with mayo, without mayo, with salad dressing and so on. I do recall those moments. These dispatch boxes still exist but, sadly, the minister for resources—who obviously drifts in and out of the political Alzheimer’s club—fails to recall the strength of the advocacy of the Labor Party against the GST at that time. Now they are taking the GST off the states.

The reason we gave the GST to the states was that the states had growth areas of expenditure—granted, it is the case that health is an area of growth. Having worked in state government, one of the challenges for the states is that their revenue does not grow at the same speed as their necessary expenditure on health, education and so on. But, this is the point that Colin Barnett is making: if the federal government is going to provide assistance to the states in this area of significant growth—health expenditure—then the federal government should do it out of its own sources of revenue and not out of the revenue that is allocated to the states. I fully accept the concern of Western Australia in that regard, particularly given—whether it right or wrong—that Western Australia has a current concern about the Grants Commission formula.

Deputy Speaker, as someone who is familiar with this, you will appreciate that I have to move the following second reading amendment:

That all the words after “that” be omitted with a view to substituting the following words:

                 “the House declines to give the bill a second reading until:

             (a)    there has been laid on the table of the House a copy of an agreement reached between the Commonwealth and each of the states and territories about GST handback in relation to the measures in this bill;

             (b)    each of the states and territories has signed that agreement; and

             (c)    given that the state opposition parties in New South Wales and Victoria have signalled that they do not support the current agreement, the people of those states have voted in their upcoming state elections”.

This is a very important point. The government are asking us to vote on a bill that will be immediately undermined should there be a change of government in Victoria on Saturday or in New South Wales in late March next year. Therefore, now is the time to put in place a framework that ensures that not only does the government deliver on all the preconditions for this bill upfront but also the government does not go down the path of trying to legislate for something that will not be able to be delivered.

I make another key point. The GST was introduced to try and reduce the serious vertical fiscal imbalance in Australia by providing a large and growing revenue stream to the states. This is a very important point: the coalition are firmly of the view that governments should be responsible for raising the revenue that they choose to spend—this is a key principle. It is easy to spend other people’s money. It is hard to spend the money that requires political pain to raise it. That is why exacerbating vertical fiscal imbalance in Australia with this bill is a bad decision.

Even though the Commonwealth government collects the GST on behalf of the states, all the revenue goes to the states. Therefore, the states should be in the business of determining exactly where that money goes rather than having a fixed formula where only a part of the GST goes to the states. Most significantly, the states were the ones at the end of day that supported the GST through the Senate. I remember the impact on negotiations with the Democrats to get the GST through the Senate—as my colleague the member for Casey, who at that time was working for the Treasurer, will recall. It was significant for the Democrats to get their support that the revenue was going to the states.

Not all the states abolished all the taxes that were part of the GST deal. What a surprise that the New South Wales Labor government did not keep a deal! The only deals they keep are in relation to jobs for their own people, but they do not keep a deal between states. To be fair to old shoebox over the table, the minister for resources, he knows as I know that Kristina Keneally rejected the national approach to occupational health and safety and so there is a broken deal there. I think the minister for resources would be very keen for New South Wales to keep its commitments.

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