Guy Barnett (Tasmania, Liberal Party) Share this | Hansard source

I would like to refer to the Commonwealth Grants Commission Report on state revenue sharing relativities: 2007 update and its relevance to Tasmania—specifically, the considerable benefits that Tasmania is now receiving as a result of the windfall gains of GST revenue. I want to put it on the record that this report makes it very clear, and the federal budget statements make it very clear—as indeed the Tasmanian budget statements make it very clear—that in this financial year the Tasmanian government will receive a windfall gain of $117 million in the 2007-08 year. That will give the state government an opportunity to axe state business taxes, as was agreed back in 1999. It would also provide the opportunity for the state government to do other things. For example, it could fund 3,500 jobs. It could build six new high schools in Tasmania. We have had a debate in the last day or so about the number of schools that are about to be closed by the state government. It could build 12 new district hospitals. It could buy 805 new ambulances. It could build 483 housing division homes. The GST revenue windfall gain to Tasmania makes it very clear that the state government has a responsibility to the Tasmanian people to use that money wisely, either in cutting taxes or ensuring that essential services are provided, particularly in the areas of health, education, police and so on.

In terms of the ongoing windfall gain, I want to make it clear that the GST windfall from 2003 to 2011 is humungous in size. In 2003-04 it was a $69.5 million windfall gain; in 2004-05, $106.1 million; in 2005-06, $102.2 million; and in 2006-07, $109 million. In 2007-08, it will be $117 million, as I have just indicated; in 2008-09, $131 million; in 2009-10, $140 million; increasing to a $152 million windfall gain in 2010-11. They are very significant numbers. So during that time the estimated GST windfall gain to the Tasmanian government is $927 million more than it would have received under the old tax system—the old tax system that federal Labor supported, the system that the state Labor government supported. They opposed tooth and nail the GST and the introduction of tax reform in and around 2000. The government moved ahead, with good economic management, which is a symbol of this government, and introduced these tax reforms—and what has happened? You have seen the windfall gains to Tasmania. That is approaching $1 billion by 2011. That is a huge amount of money.

So what has that tax reform actually done? At the federal level the tax reform ordered by the Howard government to make way for the GST has reduced or abolished the wholesale sales tax; income tax has been reduced, with 80 per cent of the population now on a 30 per cent marginal rate or less; company tax has reduced; and capital gains tax has reduced. At the state level the financial institutions duty has been abolished, the debits duty has been abolished, the various stamp duties have been abolished—but there is lot more to come. There is a lot more for the state government to do with the rivers of gold that they have in GST dollars flowing into the state of Tasmania—and, indeed, into all of the states of our great country, Australia.

The state government payroll tax is a tax on jobs. This is a particularly iniquitous tax. Tasmania has been benefiting from that tax significantly. That revenue increase in the 2003-04 year to the 2006-07 year was 34.6 per cent. So they should use the GST windfall to start phasing out this anti-jobs tax, in my view. This report makes it clear that the rivers of gold are flowing deep and fast into Tasmania with GST dollars. It is up to the state government to use those dollars wisely. (Time expired)

Question agreed to.