Alan Cadman (Mitchell, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer outline the state of Commonwealth-state financial arrangements? What are the prospects for further reform to provide tax relief to business and to consumers?

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

I thank the honourable member for Mitchell for his question. I can tell him that in the five years from 2001 to 2005-06—really, six full years—the GST which has been paid to the states has totalled $187.2 billion, including a windfall of $4.7 billion. Everybody in Australia knows that the GST was introduced to replace other taxes. Many of those other taxes have been abolished, like the bank account debits tax, the financial institutions duty and stamp duties on shares. But now that the states are all in a windfall position, the Commonwealth requires the state governments to make good on the original deal and to abolish all of those taxes which have been slated for abolition as part of the intergovernmental agreement. That includes stamp duties on business conveyances and real property. The states have not yet agreed to a timetable in respect of that, even though the states will be getting a windfall in the next financial year of $3.3 billion; in the year after, $4.5 billion; and in the year after that, $4.9 billion.

I notice that Mr Iemma, the Premier of New South Wales, says that if only he can be given more GST he can observe the agreement in relation to the IGA. Let me point out that Mr Iemma and New South Wales are being given more GST year after year. This year they will be getting $10.9 billion; next year, $11.9 billion; the year after, $12.9 billion; and the year after that, $14 billion. And bear in mind that the New South Wales Labor government opposed the introduction of the GST, as did federal Labor, and now demand more and more of it. We say very simply that if the states want to take 100 per cent of the GST then the states can abolish 100 per cent of the taxes that it was introduced to get rid of. We in the federal government will maintain on behalf of the Australian people their entitlement to have those taxes abolished.

Who in this parliament do you think, Mr Speaker, would stand up for the state governments and try and justify the fact that they are not abolishing these taxes as agreed? None other than the state Labor patsies, the federal Labor Party, led by former Queensland public servant the Leader of the Opposition and his offsider, the member for Lilley. He comes into this place and he has every excuse under the sun for the state premiers because he will not stand up for the Australian people. Let me remind the House this government introduced the GST to get rid of other taxes. We will stand by the Australian people and we will demand that the Labor Party make good on that deal.