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

I take the opportunity to put a few remarks on the public record in the ongoing debate in respect of the GST. I meet many constituents who ask my opinion and have their own opinion and their next-door neighbour's opinion on it, and I think it is really important to put some real basics on the table. We know that in 2015-16 total revenue is expected to be $405.4 billion, an increase of 5.5 per cent on the estimated revenue of 2014-15, and we know the total expenses for 2015-16 are expected to be $434.5 billion, an increase of 3.4 per cent on estimated expenses in 2014-15. So we know that there is more increase in income than there is in expenditure, but we are spending more than we earn, so to speak.

Where does that revenue come from? I think it is really important to understand that individual income tax contributes 48 per cent of that revenue, $194.3 billion. We know that company tax—and do not take this as in any way a criticism of companies; I think companies are absolutely critical and vital, and they do enormous amounts of good work in the economy—contributes $71.2 billion. So we know where the income is coming from. We know that GST contributes $71.1 billion, or 18 per cent of the revenue. I could go through and give you all of the figures from the budget overview.

We know that in mid-December the finance minister will come out with the Mid-year Economic and Fiscal Outlook, and we will see how we are tracking on all that. But the Prime Minister has said we need a conversation on everything, and it is out there that there is a potential for GST to be increased. We know that ACOSS commissioned NATSEM to do some modelling, and we know there is a bit of conjecture about that, but I want to put it clearly on the record that Gareth Hutchens, writing in The Canberra Times on 12 June 2015, said:

NATSEM is one of Australia's most well-respected modelling outfits. Since being established in 1993, it has been used by Labor and the Coalition to model scores of policy proposals and federal budgets.

We know this to be true because not one, not two but three Liberal prime ministers have said that on the public record. We know that the Hon. John Howard made a contribution in the House of Representatives on 26 May 2005, and he said:

We have seen a steady growth in the living standards of the lowest paid members of the Australian work force, a point independently underscored by the National Centre for Social and Economic Modelling (NATSEM) when it found that the strongest growth in private incomes over the period from 1994-95 to 2002-03 was enjoyed by low-income households.

So the Hon. John Howard used NATSEM as evidence in his contribution in the House of Representatives. We know that in 2006 the Hon. Tony Abbott said in The Sydney Morning Herald:

The policies of the Government have made all households better off, according to NATSEM modelling released last week.

We also know that the current Prime Minister, the third of the trio, said:

I have not seen the St Vincent de Paul study, but NATSEM is the premier economic modelling institute and the numbers I have quoted are straight from their presentation to the Melbourne Institute conference.

So clearly those on the other side accept that NATSEM has the runs on the board to be able to articulate and disseminate information on the effect the GST will have on people.

Let us just have a look at what it does. Currently, a household—they start at a very modest income—earning $26,131 pays $3,576 in GST, about 13.4 per cent of its disposable income. We know that a household on $49,636 pays $4,217 in GST, which is 8.5 per cent of its disposable income, and we know that someone on $75,931 pays $6,296 in GST, which is 8.3 per cent as a proportion of their disposable income. At $105,503, a household pays $7,551 in GST, which is 7.2 per cent as a proportion of its disposable income. If we have a look at those on $172,638, they pay $10,154 of GST, which is 5.9 per cent as a proportion of their disposable income. So, very clearly, the GST impost hits those on the least incomes proportionally higher. Those who can least afford it cop it the hardest. That is the point that the Labor Party has been making repeatedly in this debate.

An increase to 15 per cent is not broadening it. All things are on the table, according to the Prime Minister. That is the simple increase to 15 per cent. We know that those least able to afford it will be hit the hardest by it. Now, if you look at the effect of broadening the GST, we also know that that is going to impact disproportionately on those least able to afford it.

All of this should be seen in the context that there has been debate in this chamber over recent days about the fact that people who turn over a billion dollars do not have to disclose where their tax goes. They do not even have to tell us, let alone pay it. They do not even have to show us where it is going. If we are going to really have a sensible debate with all things on the table, we really need to see, for those people of very high net worth: where are they doing their—in the words of the former Treasurer—heavy lifting? Or are they leaners?

What we do know very clearly from the budget overview is that income tax payers are shouldering 48 per cent of the revenue burden. They are also shouldering their share of the GST burden. We know this from the budget overview statements. I would say: if all things are going to be on the table then let us have full disclosure. Let us see what those high-net-worth individuals are paying. I have no doubt that they are paying tax—some of them—somewhere. Most of them have made a conscious decision to invest in accountants, invest in legal firms and invest in tax-friendly shelters.

This government has reduced the number of tax collectors. We heard modelling that, for every dollar you put into a tax collector, you get $3 in revenue, and yet we see thousands of people going out of the tax office. We have a government that is floating a broad look at all tax—except that you cannot look at those people. You cannot see their tax affairs, because they might get kidnapped! For goodness sake! We know who they are. It is beyond me that anybody can put that up in a rational argument.

But what we do know is that NATSEM modelling is accepted by all sides of the house, by everybody in this place. We know that from the public statements of three Liberal prime ministers. If the government are going to talk about broadening the GST base, we really need to look at who is doing the lifting in the economy. If you are going to talk about compensating, how are pensioners, people on really low incomes, self-funded retirees and all those people going to get compensated?

I think that this debate on the GST will go on right up to the next election. I think they have floated it out there to see what the focus groups say, to see whether they can get it through. The contributions from the other side are that Liberal premiers and Labor premiers support it. I think we need to have a serious debate based on all of the information and the facts, and the Mid-year Economic and Fiscal Outlook may be a starting point for that. We do know that there are people who are not disclosing what they pay in tax, but it is not available to the ordinary pay-as-you-go taxpayer. They get it whacked out of their pay each week, and they pay their GST on all the services and goods they buy. They are completely open and transparent. I think the other side should make sure that companies are in exactly the same boat.

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

Given that we have two minutes to go and Senator Bernardi is on his feet, very quickly, Senator Bernardi, you have the call.

Senator Wong interjecting—