Terri Butler (Griffith, Australian Labor Party, Shadow Minister for Young Australians and Youth Affairs) Share this | Hansard source

The Treasury Laws Amendment (Making Sure Every State and Territory Gets Their Fair Share of GST) Bill 2018 is a very important bill to the entire nation, but it is of particular importance to the states that tend to have more booms and smaller populations. I include in that, of course, Western Australia and Tasmania, but I, being a Queenslander, particularly include in that the great state of Queensland, which, like Western Australia, has been the beneficiary of a resources boom and, like Western Australia, is now moving to a situation where the plants have been built, the mines have been largely built and we're moving out of construction and into operation. As you very well know, Mr Deputy Speaker Hastie, being a Western Australian, there is the example of the LNG plant—maybe 10,000 people to build one and around 300 people to run one. So there's a material jobs impact once you move out of the construction phase into the operational phase.

We're very pleased in Queensland to see the progress being made in our resources sector, but, like everybody else, we certainly don't want to put all of our eggs into one basket. You have to diversify your economy and you have to have a diverse range of sources of tax revenue as a government as well. As you know, Deputy Speaker Hastie, in a country where we have both vertical fiscal imbalance, which means that the states have to rely heavily on the Commonwealth for their tax revenues, and a history of horizontal fiscal equalisation, the formulas that are used in order to distribute tax revenues are very important. We have seen, over a very long period of time, the Commonwealth Grants Commission using the principles of horizontal fiscal equalisation to try to find an equitable way to distribute Commonwealth tax revenues to the states to enable states to ensure that the services that they provide and the infrastructure they build are of a reasonable standard and that people in smaller and less populous and sometimes less well-off states aren't disadvantaged merely by geography. It's a massive challenge and we shouldn't underestimate the inherent difficulties in finding a fair way to distribute tax revenues from the Commonwealth to the states and the territories. I might also say, given the member for Solomon was here speaking so passionately earlier today, that we shouldn't underestimate those difficulties but we should expect there to be continuous attention given to seeking the fairest way of reallocating and allocating tax revenues.

It is sensible that the Productivity Commission looked at the way that the Grants Commission administers the principle of horizontal fiscal equalisation, and it is sensible that we're now looking at a way to update and modernise the way that GST is distributed between the states by the Commonwealth, having regard to the way that the Commonwealth Grants Commission is applying the principles that it has to use. I'm sure most people here would look from time to time at the Commonwealth Grants Commission's decisions and see the task that's before the commission in seeking to apply the principle in a way that is fair and robust.

One of the things that has concerned me, being a Queenslander, in looking at what's happening to Western Australia is that I could see a similar thing possibly happening to Queensland in the future. I think it is a sensible compromise position and something that Labor has been leading on to look at a way to try to prevent the operation of the principle in a way that doesn't accommodate outliers. Of course, at the moment, Western Australia is the outlier economy. Instead of equalising to the best performing state fiscally, moving that to the second-best performing state will have a smoothing effect, which will go some way to dealing with the outlier issue. When you change formulas like that or change principles like that, you need to think about the possible winners and possible losers, to put it in particularly crude terms. I don't want my state to be a loser in relation to the GST.

I'm very pleased that there is movement on having a GST floor and, of course, I'm very pleased that there is a transition period during which there'll be a guarantee that no state will be worse off. But, like everyone here, I'll be taking a very close look at what happens after that transition period, in the event that I am still in public office at that time, and I'll be taking a very close look at the way that the government applies the guarantee that they're making. We certainly don't want to see, for example, money being given with one hand and taken with the other. In other words, we want to see a very firm commitment from the Commonwealth that they won't try to recoup the money that goes to the states through the GST distribution through other means, such as cutting funding to, for example, hospital partnership agreements or remote housing agreements, to pluck two examples from the air. The state government in Queensland has been very concerned about funding cuts in both health and remote housing and has been very vocal about that, so I expect the Commonwealth to honour both the letter and the spirit of the commitment that it's making: no state will be worse off.

I'm sure every Queenslander here will be doing everything they can to hold the government to account, no matter which party they're from. Whether we are from the party of government or whether we are from the party that's in opposition, every single one of us will be watching very keenly to make sure that the government honours in spirit its commitment that no state will be worse off. And we'll be watching that the government does not seek to make sneaky cuts in other places to try to recoup the money that's being allocated to prevent the erosion of states' revenue. I understand that the Treasurer has written to state treasurers to make a commitment to that effect. I don't know whether the Treasurer has tabled that letter here in the parliament yet. I certainly would encourage him, if he hasn't tabled the letter here in the nation's parliament, in the House of Representatives, to do so. It would give further assurance to Queenslanders that the coalition will be, as I said, upholding both the letter and the spirit of the commitment to ensure states are not worse off. As I said, I certainly look forward to making sure there is no erosion of the benefits of GST distribution to Queensland following the transition period as well.

I'm very pleased that we've reached a position that parties and states of diverse interests can get behind. I'm pleased that we're in a position to support this government bill here in the House. I certainly look forward to seeing any comments on it that arise in the other place, but I'm pleased that there is some way of resolving this to give everyone certainty. Our state governments deserve certainty, and of course the people that we serve here in this place deserve certainty. I'm very pleased to see that the bill is progressing in this manner and I'm proud of my colleagues from Labor for the constructive manner in which they have engaged with this very difficult issue, which can pit state against state. As always, they have done it in a way that is stable and unified and where they have been kind to each other—and we could all do with a bit more kindness in public life. Ultimately, everyone has taken a very firm position, everyone has worked very hard in the interests of their own state and their own constituency, and we're in a position where we are now able to reach some agreement, as I said, across party and state lines in relation to the proper distribution of the GST. I'm very happy to support this bill.

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