Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Communications, Information Technology and the Arts, Senator Coonan, in her capacity representing the Minister for Revenue and Assistant Treasurer. Will the minister inform the Senate of the importance of a well-structured tax system to the Australian economy? Further, will the minister update the Senate on the financial benefits of the GST for my home state of New South Wales?

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

Thank you to Senator Fierravanti-Wells for a very pertinent question. Over the last 10 years, the Australian economy has gone from strength to strength. We are now experiencing the lowest unemployment rate in 30 years and the 15th year of continued economic growth. This is due, of course, to this government’s willingness to do the heavy lifting and to take the hard decisions needed in Australia’s long-term interest. Reform of the tax system has been foremost amongst those decisions that this government has been prepared to take.

The goods and services tax, which we introduced in 2000, will provide an additional $67 billion in untied funding for the states and territories this year, with New South Wales enjoying the lion’s share, more than $20 billion. As a result of increased revenue from the Australian government, most states and territories have prospered and grown, as we hear. However, New South Wales has had 12 years of a Labor government. The New South Wales Labor government, led previously by Premier Carr and now by Premier Iemma, has failed to build or capitalise on the opportunities that this prosperity can bring. Report card after report card show New South Wales is the most mismanaged state in the country. New South Wales has the third highest unemployment rate, at five per cent, and imposes a higher tax burden on its citizens than any other state. Despite this excessive taxing, the New South Wales budget has a $3 billion cash deficit this year. It is projected to rack up an extra $20 billion of debt over the next four years.

Where the New South Wales government’s record of mismanagement is being felt more than in any other place is, of course, the housing sector, where inefficient and costly taxes are turning away investors and dampening the new housing market. Why? Because the only strategy that this inept New South Wales government has to dig itself out of this gross mismanagement of the economy is hiking up taxes on property. Even after the certainty provided by the GST, the New South Wales government has refused to provide its residents any relief from stamp duty. In fact, in 2004 the Labor government increased stamp duty by slapping a new premium property tax on houses valued at over $3 million. Land tax costs New South Wales residents more than $1.7 billion a year—a land tax which the Property Council, the Real Estate Institute of New South Wales and Access Economics have all identified as a significant brake on economic growth.

The Peter Debnam led coalition stands ready, Senator Fierravanti-Wells, to fix these problems and to restore New South Wales to prosperity. The coalition parties have pledged to top up the first home owners grant by $3,000—

Honourable Senators:

Honourable senators interjecting—

Paul Calvert (President) Share this | Link to this | Hansard source

Order! There is too much noise in the chamber.

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

and to establish a stamp duty concession of $4,000 to investors providing rental accommodation, which are very sensible and much-needed initiatives. The opposition are all too happy to point to state Labor governments when asked what experience federal Labor has to run the economy. The sad fact is that the Labor states are littered with examples of appalling economic management and dodgy deals for their mates. The Labor brand is a tainted brand; whether you look at federal or state it is still the same old Labor.