Wayne Swan (Lilley, Australian Labor Party) Share this | Link to this | Hansard source

Over the past three months, the Liberals have been flip-flopping all over the place in an incredible display of economic policy confusion. Today the Treasurer has yet again reaffirmed his determination to increase the GST to 15 per cent. This is damaging consumer confidence, but when you overlay that with speculation about an early election, that is a sledgehammer into consumer confidence! People in the community are now extremely worried.

This government, this Treasurer and this Prime Minister have had over three months to make up their minds about a tax package. The government has occupied the Treasury benches for 2½ years. All of the policy talks, all of the possible tax changes, all of the expenditure priorities—every single one of them—have been assessed and sit in the bottom drawer at Treasury. Yet the government remains completely paralysed, and the consequence is very damaging for consumer confidence.

The government moved into their offices and then they sat on their hands. Indeed, they went overseas for a while. The Prime Minister went overseas. The Treasurer went overseas. We still do not know what the government are going to do. The Prime Minister might take the occasional tram, but you can be absolutely sure he does not walk in the same shopping aisles as the average Australian. He would not be considering a 50 per cent increase in the GST if he did. A very big tax on almost everything, tens of billions of dollars, is what we are looking at from this government. Yet they remain paralysed, which is hitting consumer confidence.

Historical experience is very relevant here. The historical experience shows that, after compensation is paid to households, governments always collect a lot less revenue than they thought they would. In fact, the original GST package introduced by Treasurer Costello ended up costing the government $21 billion after compensation was paid. That is, that government had to spend $1.15 for every dollar raised from the GST when the package was first introduced. The point I am making here is that, after compensation, which will be inadequate, there will be no money. There will be no money for a corporate tax cut. There will be no money for additional spending on health and education.

So why are they putting the country through this farce? The answer is pretty clear. The long-held ambition of the Liberals and the Nationals is to shift the tax burden onto low- and middle-income earners and away from corporates and the wealthy. The long-term agenda of the Liberal Party is to serve the top table first. The long-term agenda of the Liberal Party is to comfort the very comfortable. That is the long-term agenda of the Prime Minister and the Treasurer. There can be no other explanation for why this farce of incoherence continues, damaging consumer confidence.