Jo Lindgren (Queensland, Liberal Party) Share this | Link to this | Hansard source

I rise to take note of answers on the GST. Exploring options on tax reform allows the government to support a national platform on economic growth and jobs that back Australians. It is important to have discussions about not only the GST but tax reform in general, and that is what this government are prepared to do. The Prime Minister, the Treasurer and the Minister for Finance have all openly stated that the coalition government will pursue all discussions on tax reform, because this country needs to address the taxation system that promotes jobs and growth. The Treasurer and this government are about encouraging people to work hard to make money, to save and to enjoy their lives in Australia. We are considering all options and looking at the best possible tax system.

The Turnbull government is committed to tax reform and looking at lower, simpler, fairer taxes for all Australians while focusing on tax reform that increases employment opportunities and economic opportunities. Critical to this government is a better tax system, with a better combination of taxes at state and federal levels that helps us grow our economy. It is important to have a mature discussion about tax to see what can be done more efficiently. Let us look at our tax system and see what is working and what is not. Economic leadership is what this government is all about. It is about economic leadership that grows jobs and the economy.

There have been discussions about personal income tax and there have been discussions about other areas of tax. These discussions also include competition policy reform, because the Australian people will expect that any tax changes result in better services, more choices and better spending. We are having conversations about how we grow the economy and how we grow jobs. There are many elements to that, and the tax system is one of the things that can hold Australians back. Prime Minister Turnbull is right: we need a tax system that is a minimum handbrake on economic activity. We need to control our expenditure. There is definitely a need to address the taxation issues so the economy can grow and jobs are created. We want to grow the economy and grow jobs. It is for that reason we are engaging in discussions. They are good discussions and they are positive discussions, and good economic leadership engages in positive, collaborative discussions.

We are concerned at the strong evidence that shows Australians are already paying too much tax in the tax system, particularly income tax. Many features of the existing tax system will, over time, limit jobs growth and make it less attractive for investment in Australia. The government will continue to build on the objectives and benefits of creating a better tax system that supports jobs and growth in our economy and will not allow the process to be undermined by rule-in or rule-out debates. The coalition has not put any proposals out yet. We are just showing economic leadership. Australians expect that of the coalition government. The federal government has not made any decisions about options. We are pursuing tax reform so Australia is in the best position in the Asia-Pacific region. People of Australia understand that any reforms under a coalition government will be good for business, good for investment, good for innovation, good for opportunity and good for people. They understand the coalition government is trying to fix the economy and ensure that expenditure is under control.

Once again I would like to point out how important it is to have a discussion on the GST. We need the right tax system to generate growth. People want a tax system that will back them rather than hold them back. The primary purpose of taxation is to pay for hospitals, schools, infrastructure and a strong safety net. Taxation should not overly distort decisions that workers, businesses and consumers make. The task is to create a tax system that helps generate growth and promotes incentives to work, save and invest. A growing economy is the best and the only way to guarantee jobs in the future is to support people.

Any discussion on tax reform shows the coalition government is serious about economic growth and jobs. The coalition government will do whatever is necessary to get ahead, and that is what any government will do. The coalition is serious about ensuring lower, simpler and fairer taxes, opportunities, economic growth and jobs. The government will continue to deliver real tax reform that is part of a broader reform agenda that looks at the entire tax system. Any tax reform will improve fairness and efficiency. We recognise that stronger revenue will come from a stronger economy where Australians earn more, not by placing a greater tax burden on Australians. Any final policy position will ensure that the overall tax burden on Australians is not increased. We welcome strong evidence that shows that paying too much tax, particularly income tax, is affecting Australia's prosperity. (Time expired)

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Once again we have seen a question time where the government absolutely failed to give accurate answers to the opposition's very reasonable questions, especially questions on the GST. There were three quite clear questions to Senator Cormann: did he stand by his commitment that, from 2013, the GST would not change if elected to government on 7 September; did he stand by his commitment that, under the coalition, there would be no cuts to hospitals, schools, defence or pensions and no increase in the GST; and was Mr Pyne correct when he told a group of coalition MPs yesterday that the Turnbull government will not be taking an increase to the GST to the next election? Of course, in all the answers we got, we just got obfuscation. We could not get a clear answer. We saw the minister dodge and hedge, absolutely determined not to give a clear answer, not only to this chamber but to the Australian people. It is clear that this government is planning to attempt to increase the GST. If I had any doubts, Senator Lindgren's contribution just before probably took away those doubts. It is pretty clear from what she said that the GST will be broadened. In fact, if I were a betting woman, I would probably put some money on it, judging by those comments.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I'll have a bet.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Gallacher, but I do not think we are allowed to have bets in here. See me outside, but I think we would be betting on the same thing. Time and time again, what do we see from this government? We see changes by this government that impact those on lower incomes significantly more than those on higher incomes. That is what the problem is with broadening the GST, especially if it relates to food. One of the big concerns I have is that, if you add the GST to all the foodstuffs, lower income people, firstly, will spend more of their income on surviving and just being able to eat and, secondly, because it is often cheaper, will probably have to resort to buying junk food. If fresh food has the tax on it, it will not encourage people to buy fresh food.

The chief executive officer of ACOSS, Cassandra Goldie, told the 7.30 Report that the modelling showed that this was definitely a regressive tax and would disproportionately impact the budgets of low- and middle-income earners who spend more of their overall income on living costs. Of course, food is included in that, as are such things as electricity and going to the doctor. Everything will have a much bigger impact on those that earn the least. Dr Goldie also stated that all the money raised by the tax may have to be spent compensating those affected by the increase in the GST rate, anyway.

A new 15 per cent tax on shopping and fresh food will also cause problems for small businesses, because it will create more red tape. This blows the government's rhetoric on reducing red tape completely out of the water. I wonder whether small businesses are going to be lined up to become the government's unpaid tax collectors. I look at those small supermarkets—not the two major ones, or the three major ones as is the case in a lot of states, but the smaller, corner-shop types that we still have in Tasmania—and I think: is this going to be a whole lot more red tape for those businesses? We hear, time and time again, from the government that they are reducing red tape. We have these great repeal days that there is a lot of fanfare about. They want hats and whistles and balloons because they take a comma out of an old act.

I do not know if the government know what they are doing with regard to GST, because there appear to be a number of backbenchers who are quite concerned about increasing the GST and broadening the rate. We have heard from a number of those over the last two weeks. (Time expired)

Question agreed to.