Alby Schultz (Hume, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer inform the House whether all states and territories have agreed to abolish their inefficient state taxes in line with the 1999 GST agreement? Is he aware of any state which is not honouring the agreement?

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

I thank the honourable member for Hume for his question. I can inform him that at the meeting of state and federal treasurers on Friday the GST proceeds—

Opposition Members:

Feral treasurers?

Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Regional Development) Share this | Link to this | Hansard source

You’re a feral Treasurer!

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

I welcome the member for Hotham back again—the sound effects man. How we would have missed him if Senator Conroy, Mr Shorten and Mr Pakula—Mr Peculiar—had had their way and run him out of Hotham. It was not just Mr Peculiar, either: the Leader of the Opposition, the running dog of the roosters, if he had his way would have rubbed him out in Hotham as well. Anyway, I get distracted. Let me get back to GST. GST is distributed between the states in accordance—

Opposition Members:

Opposition members interjecting—

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! There is far too much noise. The Treasurer will be heard.

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

GST is distributed between the states in accordance with horizontal fiscal equalisation under an agreement between all of the states signed in 1999. In 2005-06 New South Wales will receive the sum of $10.2 billion of GST revenue. I might point out that when that was allocated at last year’s conference not a word of objection was raised by New South Wales in relation to its entitlement. The then Treasurer, Mr Refshauge, did not object to that distribution. The formula of equalisation between the states administered by the Commonwealth Grants Commission has now been operating since 1933. The only reality about distribution between the states is that if one state gets more another state must get less. This is a zero sum gain. The $39 billion is distributed between the states. If one state gets more, another state must get less. The Commonwealth does not keep any of the revenues.

As everybody in Australia knows, GST was introduced to abolish a whole raft of other taxes. Although each and every other state has now agreed to a timetable for the abolition of those other taxes, there is one state in Australia which refuses to name a timetable for the abolition of those other taxes.

Anthony Albanese (Grayndler, Australian Labor Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Mr Speaker, I rise on a point of order. I ask you to draw the member for O’Connor’s attention to standing order 62.

David Hawker (Speaker) Share this | Link to this | Hansard source

I believe the member for O’Connor has resumed his seat.

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

There is one state of Australia which refuses to honour this agreement and which believes that it is entitled to keep in place the GST and the taxes which it was designed to replace. That is the shameful state of New South Wales. Premier Iemma wants to double tax the people of New South Wales. He wants them to pay GST and he wants them to pay stamp duty on their mortgages and stamp duty on their leases and stamp duty on their hire-purchase agreements and stamp duty on their unlisted marketable securities and stamp duty on commercial conveyances. The New South Wales Labor government has so mismanaged the state of New South Wales that it now wants to take GST revenue and keep the taxes that the GST was introduced to replace. Do we hear a word, a murmur, about this from anybody on the other side, any member of the opposition, including the member for Grayndler, who may have an interest in the New South Wales government and its tax policy? Not a word of complaint.

Whilst I am on the subject, is there any political party at the federal level that supports the New South Wales government in its demand to take money off other states and give more to New South Wales? We have not heard the federal Labor Party say that either. In fact we had the situation before the last election where the Leader of the Opposition was promising more money to Western Australia, notwithstanding the fact that Western Australia is a recipient state under horizontal fiscal equalisation.

I note that the federal Labor Party does not support the New South Wales government in its demand to take revenue off other states and to increase the New South Wales share of GST, but I also note that the federal Labor Party does support the New South Wales government in maintaining those taxes which the GST was introduced to replace. On this side of the House, having gone through the hard yards of tax reform, we demand that the people of New South Wales get their entitlements: that those taxes are abolished, that they are not double-taxed and that they are not put to a special penalty through an incompetent New South Wales Labor government.