Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

A very delightful passage from one of Australia's greatest literary masterpieces, by Mr Norman Lindsay in 1918, called The Magic Pudding:

Onions, bunions, corns and crabs,

Whiskers, wheels and hansom cabs,

Beef and bottles, beer and bones,

Give him a feed and end his groans.

It is a tale of Bunyip Bluegum, who was seduced when walking through the bush by a pudding that he was quite unable to pass by. As the story goes, Bunyip Bluegum was seduced into eating the magic pudding, a pudding that never ended, a pudding that demanded eating. This tale has been popular with Australians and Australian children for nearly a century because, I think, we understand the intuition, the seduction, the attraction of a magic pudding—an endless source of nourishment.

That's what we see with the GST debate. The GST has recently become a magic pudding. Well, who would have thought, fixing the problem with the GST, that there's not enough money to go around the states? Who would have thought the fix to the problem is more money? What a revelation! We've heard in this chamber that, obviously, the Labor Party are claiming this was their idea. They've been talking about more money now for some time. The question is: where is the money going to come from? That's the question that hasn't been answered in this chamber here tonight.

It's fine to say that we can fix the problem with a floor rate on the GST at 70c initially and then 75c so that no state is worse off. Intuitively, that sounds great. That makes a lot of sense. But this pool of funds that's allocated and shared across the states, based on a principle of fairness, a principle of equity and a principle of efficiency, has been, like the magic pudding, a source of seduction for so many states. If you read the tale of The Magic Puddingthe Senate will adjourn in just over 10 minutes and you can get a copy of it online when you get home if you haven't read it for few years—you read the tales about the pudding thief. In fact, not just one pudding thief but numerous pudding thieves are all drawn to the seduction of the magic pudding. The idea of endless and limitless money is very, very relevant to this debate. I won't disclose straight away who I think the pudding thief is; I'll get to that.

Let's talk a little bit about why the GST has been so seductive and why it has led states such as Western Australia and New South Wales to claim they're not getting their fair share of the distribution. To go back a few steps, when the GST was brought in and the Commonwealth Grants Commission was set up, we had this principle—somewhat complicated and impressively named—of horizontal fiscal equalisation. The idea was that those states that didn't have the ability to raise revenue to pay for fair provision of services would be funded through the GST pool of contributions of other states. This principle is about our Federation, fundamentally. You can put all the technical and complex stuff aside; it was designed because we're a federation of states and territories in this country. As has been pointed out in this chamber, some states—for example, Western Australia—happened to be blessed and endowed with some of the world's greatest deposits of natural resources. Unlike Western Australia, my home state of Tasmania doesn't have such abundance of riches. However, we do have many other riches in abundance which I'll also get to a little bit later.

I was very impressed to hear from Senator Dean Smith that he hopes that this is just the beginning of tax reform in this country and especially of debate on federal roles and responsibilities on tax reform. I'm very glad to hear that because it is exactly the point that I was going to raise tonight. Where do we go next with tax reform? The reason we've seen these changes to GST distribution is the impact over time of state based policies affecting the fairness and equity of the GST distributions. In theory, the efficiency principle was designed so that these contributions shared amongst states would help equalise different taxes across different states so that we did get, for example, some states leveraging much higher rates of payroll tax. We've talked chamber during the debate in the about revenue from pokies and the gambling industry, but there are a number of other levers that states can pull. It was deemed to be more efficient if the federal government made allocations of GST revenue to try to take pressure off some states having much higher rates of, for example, payroll tax, land tax, stamp duty or a number of the other levers that they can pull. I think most people agree with the principle of equity. Even the Productivity Commission, although it made a number of recommendations, admitted that generally most stakeholders agreed with the idea that through Federation we would have a fair system of allocating the distribution of the GST.

I was outraged, as most Tasmanians were—and I'm sure Senator Colbeck here tonight also was outraged—when his Liberal state colleague Mr Barnett called my home state of Tasmania a 'mendicant' state. I note also, although it was designed I'm sure to get a headline, that Senator Leyonhjelm was out last night claiming that Tasmania and South Australia should be kicked out of the Federation because we can't pull our own weight. The whole idea is that we have a fair and equal Federation. At different times over the years different states have been net recipients of GST funds, and at other times they haven't been. It's well established that for a large number of years Western Australia was a net recipient of GST funds from other states. Then came the mining boom, and that situation changed. It's also been well established that it was actually the Western Australian government's policies around raising royalties that led to the rate of GST it received going down to 30 per cent. That's one of the issues that it has been claiming is a fundamental driver for changing the GST distribution.

If we're talking about more reform, as Senator Dean Smith has put on the table, especially around the role of the federal government and the Federation, when are we going to start having a proper debate in this place about superprofit taxes? When will we start talking about properly fixing the petroleum resource rent tax? There is $240 billion in tax credits that has been clocked up by some of the biggest, wealthiest corporations on the planet and is sitting there to be deducted against future tax—if they ever pay any of that future tax. We've got a system where we have uplift rates that I note the government is looking at reducing. They are very, very high—15 per cent for exploration expenditure and five per cent for operating expenditure—which means essentially these deferred tax credits are going to get to who knows where? I'm looking forward to the next estimates so we can get an update on where they're at now. I'm guessing there will be over $300 billion in deferred tax credits—in other words, tax that's not going to be paid—through this very generous system. What about our mining superprofit tax? For those who were in the chamber back in 2012 and 2013 we had what I would agree was a much watered-down version because of the politics of this place. But the idea behind a superprofit tax, which came originally from the Henry tax review, is still a very good one. It is a tax that essentially is levied by the federal government. It could also be used to pay for schools and hospitals and be shared amongst the states. I notice we've actually had no debate at all in this place on this legislation about where we're going to go with superprofit taxes. So I look forward to hearing Senator Smith's contribution on this and whether he agrees that there's an enhanced role for the Commonwealth in fixing the petroleum rents rort tax, the PRRT, and implementing a superprofits tax on the mining resources that are owned by all Australians.

That leaves me with, I think, the most critical part of this bill that needs to be digested. Once we go past the forward estimates, the next five to 10 years, where is the money going to come from? We know their top-ups to the GST pool—this magic pudding—are going to come from consolidated revenue. They're going to come from future governments, whoever they might be. It may be the Liberal Party or it may be the Labor Party. I don't know if it will be the Greens party, but it will come from a future government. We have to deduce that those contributions are going to come from somewhere because, as we know, it's a zero-sum game.

I look at the track record of this government since the zombie budget cuts of 2013 right through to the present day, where we've even seen in recent weeks a whole number of revelations around cuts to basic services, such as the coalition's cut to the Foodbank charity of nearly 25 per cent—which I'm glad that the Prime Minister backed off on today. It was an issue that was even raised by the farming federation body themselves, especially around the impact it would have on drought-affected families. That's just one particular issue. What about cuts to the ABC and SBS? These cuts were of course outlined on Four Corners last night, I suppose with the revelation that those cuts were tied to the political content and goings on within the ABC—something to be probed very shortly by a Senate inquiry. We have also seen an efficiency dividend in place across the Public Service. We've seen no decent pay rises for public servants. We've seen job cuts right across the service, including at Centrelink and the ATO, leading to massive service failures.

There are cuts to Landcare and threatened species budgets of around $200 million a year. So, to save the species in this country, we have to beg German charities for funding for some of our most endangered animals. In my home state of Tasmania these cuts are very serious. I know Senator Duniam and Senator Colbeck are working overtime as Tasmanian senators to get the funding in place for NRM South and NRM Cradle Coast, who have also lost their funding. Why is that, considering the importance of these NRM groups? They are especially critical in a place like Tasmania. We don't know; we've got no decisions.

The government have done everything they can to kick people with genuine needs off the disability pension and they have failed to raise Newstart. I'm wearing my $75 badge today. I didn't have large enough lapels to wear a larger badge, but that can be easily fixed when I get home and get one of my op shop suits. I warn senators that I have worn it once in here already and I'm prepared to do it again. For people who are living on the poverty line, $75 a week is not a big ask. Not only will it help these people who desperately need it; it will also help the economy—and we think that's a great priority. But the government are too stingy and too mean to raise Newstart at all. And let's not forget the revelations today about more devastating cuts to universities and the statements put out by the Tertiary Education Union. We are seeing cuts to schools, public hospitals and, sadly, more cuts to foreign aid. We've even seen money come out of the NDIS recently to go towards one of the government's pet projects.

So let's be honest: the magic pudding isn't so magic. There isn't an endless goodness in this pudding; it is limited. We know that the money has to come from somewhere once the GST top-ups start in a few years time. We have no idea where that money is going to come from, but I'll bet my bottom dollar that, if that money is allocated by a future Liberal government, it will come from the nation's most vulnerable and it will come from essential services. So it's not so magic after all.

While the Greens will be supporting this bill and the intention of it, we will be closely scrutinising and keeping a very close eye on future allocations of funds, where they are going to come from and how we are going to pay for this. The Australian people need to understand—