Nick Xenophon (SA, Independent) Share this | Hansard source

There was some tax reform. The concern I have is: if we try and push up the GST and go down that path, that it will be regressive. This whole approach ignores some fundamental issues. We need to look at service delivery, of government working more efficiently and other sources of revenue where there are, if not loopholes, areas ripe for reform before we consider increasing the GST, which itself would be quite regressive. It would concern me to bring the GST across the board to include fresh food, health and education.

In relation to health and education, it is interesting that Henry Ergas—I think he is Senator Cameron's least favourite economist—in an opinion piece in TheWeekend Australian on 10 January of this year said that extending the GST to private health and education hurts the public system, creates longer waiting times and actually causes a distortion and more pressure on the public system. I think there is something in that. Also, a GST on fresh food, I think, sends the wrong health message in terms of what we need to do.

My view is that, before we even consider going down the path of an increase in the GST, we ought to look at other issues in terms of raising revenue: superannuation tax breaks are unsustainable in their current form. I think that the shadow Treasurer Chris Bowen came up with some pretty sensible solutions in terms of paying more tax on super, if you have more than over $2 million or $3 million—or thereabouts—in relation to your superannuation. I think that needs to be looked at very closely, because those superannuation tax concessions are unsustainable.

The other issue relates to negative gearing. I am not against negative gearing per se, but I think it can be tweaked to have a greater emphasis on new, affordable rental housing, which would make a difference in terms of those Australians that need to be housed in good, safe, quality accommodation. My concern is that unless we tweak negative gearing it will continue to cause the budget to blow out more and more. Also, we need to make sure that multinational corporations—the Googles, the Apples and the Microsofts of this world—pay their fair share in tax. These are just some of the issues we need to look at before we look at an increase in the GST that will hurt lower income earners and will hurt the poor and the disadvantaged in this country. There are a whole range of other measures we need to look at.

I want to make reference to something that I think is worth reading, something that I read some time ago, The Fourth Revolution by John Micklethwait and Adrian Wooldridge. John Micklethwait was editor-in-chief of The Economist magazine—I guess his politics are right of centre—and Adrian Wooldridge was a senior contributing writer. As I understand it, Mr Micklethwait now runs Bloomberg News as the editor-in-chief. They draw some interesting comparisons in terms of how the modern state delivers services most efficiently and in a way that does not compromise service delivery. Interestingly, despite that perhaps right-of-centre perspective from Mr Micklethwait, they have looked around the world at what has happened and where there have been good results.

One of those areas is Scandinavia, where the health system, in terms of outcomes, has improved. Costs have been reduced because they have worked on a model of social inclusiveness and on driving efficiencies, and that, to me, is the way for the modern state. I think our temperament here in Australia is closer to the Scandinavians than to the Americans in terms of social equality, opportunity and having a safety net for people that are most vulnerable. So that is the sort of approach we should be looking at. We should not be looking at increasing the GST, which would impose an additional, disproportionate burden on the poor.