Linda Reynolds (WA, Liberal Party) Share this | Hansard source

I rise to speak on this matter of public importance relating to the GST. I agree that this is an important issue for our nation. It is important because, over the past one to two decades as a nation we have lost the ability to discuss policy in a meaningful way to come out with the best possible outcomes for Australians. It would be great if we could have this discussion now on tax reform. I think we have lost the ability to have a good old-fashioned policy ding-dong in this place and outside this place on tax reform—about all of the options—so that we can come up with the best possible outcome for this nation.

Contrary to what those opposite have asserted, the government is implementing a wide-ranging strategy to enhance Australia's economic growth and employment. The government has no proposal or policy to change the GST at present. But the world economy does not stand still, and good government is about realising this and constantly re-engaging and understanding our external environment to make sure our current policy settings are meeting, if not delivering, much more than this nation requires to stay ahead of the game internationally.

We on this side of the chamber want to explore tax system reform, and of course the GST is a component of that. But this is just one of the elements of our strategy to strengthen and diversify Australia's economy—a fact that those opposite, in 1998, when we had this debate, and again now, are conveniently ignoring. It is not just a debate about the GST; it is a debate about comprehensive tax reform. Under this government's comprehensive national plan for economic growth, we are investing in infrastructure, we are deepening our regional trade ties and increasing and improving competition policy, and we are encouraging a more innovative and entrepreneurial spirit in Australia's economy.

But, to fully realise our nation's potential in a rapidly changing world, we have to look at tax reform—including the GST, which, back in the late 1990s and again today, is an absolutely critical part of our economy-wide growth strategy. We cannot truly realise the potential of our nation as a modern economy in the world if we are tying our policy hands behind our backs and keeping this nation shackled to a tax system that is, quite frankly, holding this economy back. In 1998 the previous government did not have the political courage to attempt this reform, and hence we are now probably a decade behind where we should be on tax reform. Instead, they asked the former Secretary of the Treasury to conduct a wholesale review of the tax system but, almost unbelievably, exempted the GST from the analysis. How can you possibly have a sensible tax reform discussion in this country if you exempt the GST from that debate? It is impossible, and the nation will be the worst for it.

This government is starting a real tax reform debate with the Australian community, to ensure our budget remains sustainable and enables us to continue to deliver important services like the NDIS, Medicare and pensions to Australians tomorrow, next year and the year after that and in the next 10, 20 and 30 years. Currently, it is terribly disappointing to hear the debate from those opposite. All they are doing is rerunning tired old fear campaigns. I was around in 1998 and, if you shut your eyes and listen to what those opposite are saying, you hear that they are trotting out the same old tired, very shallow, scare campaigns that they trotted out 15 years ago.

It is 15 years since the GST first came into operation. Despite the claims from those opposite that the sky would fall and our economy would fail, we know that, after the GST was introduced and we had other tax reform, the economy underwent 10 years of unprecedented growth in productivity, growth in jobs and growth in the economy. But that was 15 years ago and today we live in a very different global economic environment. We are an economy in transition, one which is becoming more and more open to international trade across the board, and we have some amazing opportunities ahead of us. But, to really take advantage of those opportunities and to create more jobs and a greater tax revenue base for this country, it is time to review in full our taxation arrangements.

This is a critical discussion, not just for today but also for our children, our grandchildren and the generations that follow. Therefore, it is extremely disappointing to see that those opposite are rerunning their very well-worn and very shallow scare tactic campaigns. They are saying the same things today that they said in 1998. Those harbingers of doom opposite, said in 1998 that there would be a national collapse, inflation would blow out, unemployment would increase and small business would be destroyed with the tax changes 15 years ago. All of the things that those opposite are saying today were things that were said in 1998. The electorate did not believe them in 1998. The electorate in 1998 knew that we needed tax reform.

I know, from going out and about in Western Australia, that people realise that our taxation system needs reform. But it does need to be done fairly. It needs to look after those who need assistance the most, it needs to empower our businesses and empower trade opportunities and it needs to ensure that we can afford to fund our services into the future. This government recognises that steady revenue will come from a stronger economy where Australians earn more, not by imposing a greater tax burden. As was the case in 1998, any final policy position will ensure that the overall tax burden on Australians is not increased. When we did that in 1998, the economy boomed and the sky did not fall in.

The debate around tax reform must occur not in a vacuum but with the whole system and the whole nation in mind. This is simply good government. Any genuine review must look at all taxes, direct and indirect, to establish the best mix to assist our economy to grow. As a proportion of total tax revenue, personal income tax in Australia is the second highest amongst OECD countries—and I do not hear those opposite talking very much about that fact. Income tax has become the silent tax for many Australians. As a result of fiscal drag, next year the average wage earner is forecast to move into the second highest tax bracket, paying up to 37 cents in the dollar on what they earn. As supposedly the party of the worker, I would have expected the Labor Party to be talking much more about the impact of this bracket creep on those they purport to represent.

For that reason and many others, it is time to revisit tax reform—so that we can deal with bracket creep and make sure that people can keep as much of their hard-earned pay as they can and so we can encourage the economy to grow in the 21st century. (Time expired)