Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the minister representing the Treasurer, Senator Cormann. Is Mr Graham Wolfe, from the Housing Industry Association, right to say about the GST:

Adding another five per cent, or more, on top of the price of a new home will put housing out of reach of many people that are trying desperately to get into the market.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

As my very good friend and valued colleague Senator Colbeck very eloquently pointed out in his answer to questions by Senator Wong, there is no proposal to increase the rate or broaden the base of the GST. There is no proposal. What the government is doing is: we are focused, as we have been for some time, on policies to strengthen growth and create more jobs. Of course, as part of our dedicated and committed focus on stronger growth and more jobs, we are focusing on how the tax system can be further improved. We want to ensure that we have a growth-friendly tax system. That is why we got rid of the mining tax and the carbon tax. That is why we reduced company taxes for small business. That is why we decided not to proceed with Labor's bank tax. And that is why we are now having a look at how the tax mix in Australia can be improved so that we can facilitate stronger growth and the creation of more and better jobs. I know that the Labor Party is obsessed with trying to get ahead of the process. We understand that Labor had a terrible track record when it came to tax reform. They asked Ken Henry to chair a committee behind closed doors, called the Henry tax review. They received the report—

Stephen Parry (President) Share this | Link to this | Hansard source

Order, Minister! Pause the clock. A point of order, Senator Moore?

Claire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | Link to this | Hansard source

Mr President, it is on direct relevance to the particular question, which is about a comment by Mr Wolfe, just asking whether five per cent would have this burden on the industry. It was not anything about the government's policy. It was specifically about Mr Wolfe's comment.

Stephen Parry (President) Share this | Link to this | Hansard source

The minister probably negated the question by saying that there was no proposal to have that five per cent increase. The minister is aware of the question. Minister, you have the call.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Thank you very much, Mr President. You are indeed right: the premise of the question was completely false and, as such, I am now just contrasting our approach of engaging in an open-minded and transparent consultation and a conversation with the Australian people and with the states and territories about how our tax system can be improved. This is how Labor approached tax reform: they got Ken Henry to sit behind closed doors and write a report; they received it; they sat on it; and then they tabled it at the same time as whacking a great big new tax on an important industry, spending all the money before they had raised a zack, hitting for six an industry that was already facing enough challenges. That is Labor's way. That is not the way we are doing it. (Time expired)

Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Can the minister confirm analysis by the Housing Industry Association that:

An increase of five per cent in the GST on a typical house and land package in Sydney will increase the cost of a mortgage by around $60,000 over the life of the loan.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Clearly, like Senator Wong, the good senator lacks the agility to adjust the supplementary question in light of the answer to the primary question. As I have already said, I completely reject the premise of the question. The government does not have in front of it a proposal to increase the GST. We are currently considering how we can strengthen growth and create more jobs by making sure that our tax system is more growth friendly.

Senator Wong interjecting—

Senator Wong says she left it open. That is right. On this side of the parliament we have an open mind. The government has an open mind to look at all of the options to improve our tax system, to look at all the options for how our tax system can be made more growth friendly, how it can raise the necessary revenue for government in a better, more efficient and less distorting way. It is no secret—Senator Wong thinks this is a revelation—we are engaged in a consultation process about how the tax system can be improved. (Time expired)

Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Will not increasing the GST on new housing push up prices and make it harder for young Australians to enter the housing market?

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Yes.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

Senator Wong is trying to answer the question that she herself presumably wrote and handed over to Senator Gallagher. This is of course a hypothetical question and I have previously rejected its premise. But let me just entertain what she is trying to suggest here. The answer is that it depends on a whole range of assumptions. I do not know what Labor's assumptions are in terms of their plans to increase the GST. We know they got Treasury to cost increases in the GST when they were in government. We know that Labor modelled increases in the GST when they were in government. But it all depends on the assumptions about what you do with other taxes in that sort of scenario. The truth is that we are engaged in a conversation about how we can improve our tax system, how we can make it more growth friendly. As part of that we are, in good faith, collecting all the necessary information so that, in good time, we can make an informed decision. (Time expired)