Brian Mitchell (Lyons, Australian Labor Party) Share this | Hansard source

I'm pleased to follow the member for Denison—or Clark, whichever it is at the moment—on this important bill, the Treasury Laws Amendment (Making Sure Every State and Territory Gets Their Fair Share of GST) Bill 2018. We do have different opinions on this. Just like the previous speaker, I have my concerns about the GST and how it's calculated, and I will go into that in my speech. Where we diverge, I think, is in how we deal with it. We can't just curl ourselves up into a ball and pretend the world isn't moving on. We need to deal with the issue before us. If this bill does not pass the House, Tasmania stands—in very real terms, Member for Denison—to lose $112 million over the seven years into the future, so we're dealing with some real issues here.

Labor do support the bill before the House, and we are pleased to have led the debate on this issue. Everyone in this place knows that, if it had not been for the pressure exerted by Labor, the legislative guarantee that forms the moral cornerstone of this bill would never have seen the light of day. The legislative guarantee in this bill means that no state will be worse off as a result of the changes to horizontal fiscal equalisation and the way it's calculated. It is a guarantee that carries legislative weight for seven years. Without that guarantee, without that signed-in-blood undertaking, that carries the weight of this parliament behind it, we in Tasmania know that our state faced great hardship. That's why I and my colleague the member for Franklin and my other Tasmanian colleagues fought so hard to ensure that a legislative guarantee formed part of this bill.

In Tasmania, 40 per cent of all government revenues come from GST receipts. Tasmania cannot afford to lose even one dollar of GST, and that is why the legislative guarantee is so important. Without that guarantee, all that we would have had to depend on in Tasmania would've been the hollow verbal promise of this Prime Minister that he'd make sure we were well looked after. This is a 'say anything' Prime Minister who has shown time and time again that what he says one day will not last till the next. This is a Prime Minister who, by profession, thinks spin is more important than substance.

The bill before the House will tie future GST calculations to the strength of New South Wales or Victoria, which are the two strongest and most broad-based economies in the Federation. The changes mean that Western Australia, which undergoes resources based booms and busts, will not be used for this calculation. The bill also provides Western Australia—and, indeed, any other state—with the comfort of knowing that its share of national GST receipts will never fall below 70c for every dollar that it contributes and later rising to 75c in every dollar. As a result of the mining and construction boom, WA's share of the GST fell to 30c. My WA colleagues may disagree, but this scenario may have been manageable, except that, by the time the GST formula had been adjusted to the lower amount, the mining construction boom had ended and mining revenues had already fallen off a cliff. So the flood of royalties slowed to a trickle at the same time that GST receipts dropped to 30c—little wonder that, even in Tasmania, we could hear the cries of pain from our friends across Bass Strait and the Nullarbor. WA was in real pain, and that is acknowledged. It is worth noting that the GST formula that led to this situation was a construction of the Howard government in concert with state governments—most of them at the time led by Liberals. Horizontal fiscal equalisation works to ensure that GST receipts are shared according to need. But, clearly, in the case of WA, something had gone askew.

While most of us look at WA and see a state of wealth, I have the unique perspective among my Tasmanian colleagues of having grown up in Perth and having lived most of my adult life in Fremantle. WA is a state of diversity in terms of wealth and privilege. It's not all Beemers and Bollinger. Yes, there are the millionaire rows, even billionaire rows, along Dalkeith and Applecross, City Beach and Margaret River. But there are also places like Maddington, where I grew up, and Langford, Darch and Orelia as well as of course the Indigenous communities in the far north. I have friends in WA who tell me that the state continues to suffer from what they call a retail recession and that swathes of Perth suburban centres have had 'to let' signs on shop windows for three or four years.

The state Labor government, led by Mark McGowan and Ben Wyatt, are making improvements but they were left an awful mess by Colin Barnett and the Liberals, who squandered the mining and construction boom and left the state with massive debt. So the clarion call from the WA Labor Party was to fix the GST. That was the first order of business. Anybody reading the front page of the West Australian newspaper and tuning into talkback in WA knows that this was the No. 1 issue in that state—fix the GST. It was federal Labor that listened. It was federal Labor, under the Leader of the Opposition and the member for McMahon, who first agreed to deal with this issue.

It's worth noting that the current Attorney-General, the Liberal member for the Western Australian seat of Pearce, used to be Treasurer in Colin Barnett's state government. As Treasurer he brought down a state budget that depended on the federal government changing the GST formula. The change never came, and that left a massive hole in state finances. So the Liberals rewarded this by preselecting him for federal parliament, where he is bringing the same level of competency and attention to detail to his current portfolio.

Tasmania's total government revenue is expected to be about $6.2 billion in 2018-19, and its largest source is GST revenue of almost $2.5 billion. As I said, we can't afford to lose even one dollar of this. GST receipts are absolutely vital to our state. Let's be clear about why. The fact is Tasmania has a limited opportunity to scale up development of our state. Not only do we have a relatively small population—just over 500,000 people—but our beautiful state is regarded by most Australians as their wilderness. We live in Tasmania, but I hazard a guess that all Australians believe they have a stake in it, similar perhaps to how Australians feel about Kakadu or the Great Barrier Reef. But this love carries a price for the people of my state. We have been prevented from developing our state to its fullest potential in terms of industry.

My state was prevented by this parliament from damming the Gordon-below-Franklin river, and that is a move that would have generated hundreds of millions of dollars in hydroenergy dollars. I'm not seeking to rehash the merits or otherwise of the decision about whether it should or should not have occurred, but the fact is this parliament told Tasmania, 'You can't do it. You can't develop that project,' and that had a direct economic cost to my state. We've had similar instances over the years with pulp mills and other development opportunities. Our state has tried to progress these issues and we are told, usually by mainlanders: 'You can't do it. We regard your state as a treasure. We don't want these things happening.' That comes at a cost. It comes at a cost to the people of my state in terms of jobs and development. So somebody has to bear that cost. Frankly, if it means that we have a higher proportion requiring GST receipts in Tasmania than other states, then so be it. We should not be regarded—as I think the Prime Minister referred to the Tasmanian Treasurer, a Liberal—as a mendicant as a result, because that is simply not true.

Tasmania's health system has been in the news daily for all the wrong reasons. GST revenue represents 64 per cent of our state's health budget. Even with that, we are struggling. Even with 64 per cent of our health budget coming from GST receipts, we struggle on a daily basis with overcrowded hospitals, with waiting lists to get into emergency departments, with six, seven, eight and nine ambulances being ramped at the hospital. This is why GST receipts to our state are just so vital. We cannot afford to see one dollar removed from Tasmania in GST receipts. We cannot afford to lose $1 from our health budget.

Education is another area where Tasmania suffers. Our education budget relies on GST revenue. Seventy-one per cent of education funding in Tasmania is delivered through GST receipts. Yet our state still trails the rest of the country when it comes to outcomes in primary and secondary school. We have low intake into colleges and university. So, if anything—and I do take the member for Denison's point on this—we need more GST receipts, not fewer. We need more assistance in this regard. Our state needs more, not less. At the very least, what this bill does is provide a floor—'make the floor the law'. That's something Labor fought hard for. We made sure this government delivered it. It would not have happened without our side putting pressure on that side. The Prime Minister was all about saying we didn't need a legislated guarantee. It was only with Labor and the opposition leader saying a legislated guarantee is absolutely essential that it was incorporated into this bill. On that note, I'm happy to cede the floor and commend this bill to the House.

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