Chris Ketter (Queensland, Australian Labor Party) Share this | Hansard source

Senator Cormann's responses today to the questions I asked in question time reveal that this is a government that is running scared on tax reform, and it is hopelessly divided on this issue of increasing the GST. We know from Senator Cormann's responses today that the government is seeking to hide behind the states and territories on this issue. It is saying that the modelling that it has now admitted that it is doing is being done at the behest of the states and territories. So this is a government that is not prepared to indicate that it has the courage of its convictions on this issue. It is basically saying it is the states and territories that made it do it.

We know that the states and territories are being manoeuvred by this government into a situation where they are having their economic base attacked. Of course we do not need to go back much further than the infamous 2014 Abbott budget, which has been so roundly criticised in recent times. It is not only this side of politics that condemned the cuts to health and education, which were inherent in that catastrophic budget; it was also its own side, at the state level, which understood what was happening. In fact, it is now just over 12 months since the demise of the Campbell Newman LNP government in Queensland, and even Premier Newman at the time understood what was happening, that there was a manoeuvre underway. Mr Newman said in May 2014:

This whole thing—

and he was referring to the budget cuts—

seems like a wedge to get the states to ask for the GST to be raised - that's not the issue …

The issue is that a fair share of the income tax that Queensland families pay should come back to pay for their hospitals and schools.

So we know the states and territories are being attacked by this government in terms of the health of education funding.

But this is a government that is hopelessly divided on this issue of a GST increase, as you well know, Mr Acting Deputy President Bernardi. The Turnbull government's proposal to increase the GST has got to be the crudest instrument ever devised to solve the problems of one of the most complex tax systems in the world. Instead of doing the hard work to close the loopholes and make multinational corporations and the wealthy pay their fair share of tax, this government's only idea is to slap a 50 per cent increase on the tax that ordinary Australians pay on every single purchase they make. Instead of looking at how to support jobs growth, address the decline of Australian manufacturing, the exit of the car industry and support the growth of the economy, the government plans to hit every single Australian, no matter how poor, to help pay for its mismanagement of the economy.

The independent Parliamentary Budget Office confirms that a 15 per cent GST on everything will make families pay at least $10 billion every year extra for fresh food, $7.4 billion every year extra for school fees and education, and at least $9.6 billion every year extra for health care and visiting the doctor. Not only will the GST push up the price of everything, it will also punish the Australian economy. At a time when global commodity prices are plummeting and economic growth forecasts are being downgraded, the Treasurer tells us that he expects that an increase in household consumption will underpin our economic growth and see us through the headwinds of 2016.

I would ask: can anyone explain to us how increasing prices for every man, woman and child in this country is going to increase our household consumption? It is going to be the reverse. Low-income families, pensioners, the unemployed and single mums are going to have to cut their spending to pay for this great big tax hit. This is fairly simple to understand. If you raise the cost of goods and services for people who are already juggling their budgets to make ends meet, their natural response has to be to adjust downwards their weekly household expenditure.

It is no wonder that this government is divided. It is no wonder that backbenchers on the other side are in fear and are in rebellion. I wonder how these cuts to household budgets are going to help our economy. They know that this is not going to play well with the Australian people. The Australian people are already expressing their view about this. They are definitely opposed to it, and I call on the government to focus on this issue. (Time expired)

Question agreed to.