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

I have received a letter from Senator Moore:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The Abbott/Turnbull Government's plan to increase the rate of GST and broaden its base.

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

What we have in those who sit on the other side of this chamber is a government that is uncaring, a government that wants to hit the lowest paid in this country, a government that has a plan to introduce a GST of 15 per cent on the low-paid in this country. The government has had that plan since it came to government and it is doing it at the behest of big business.

You cannot trust this government. Go back and look at the last election, when this government promised so much to the Australian people and where it said that it would not do certain things. But, as soon as it came to government, it set about ripping at the pension and ripping at social welfare and trying to take the rights away from working people in this country. The government took $80 billion out of education and health. It had the rhetoric of 'lifters and leaners'. So if you got some support from government, no matter how well deserved, you were a leaner and you had to make your way as an individual. All the privileged people on the other side of this chamber, who come from privileged backgrounds, do not know what it is like to not be able to put food on the table for your family and do not understand what it is like to struggle to pay your mortgage.

It is quite clear why the National Party are so upset about this. The National Party should actually be standing up for poor people because poor people, as a percentage of the population, reside more in National Party seats than they do in other seats. Yet the National Party said absolutely nothing when that first budget was brought down. They just acquiesced to the ideology of the Liberal Party. They were in the true saying of how they are described here. They were the real doormats of the Liberal Party. The Liberal Party wiped their feet all over them in relation to that first budget. There was $80 billion taken out of health and education. Why was that $80 billion taken out? It was because they had a plan that they wanted to force the states to push for a GST. That part of their plan worked because some state premiers are saying, 'How do we get any extra money unless we have a GST?' The reason that they are arguing for a GST is that that rotten mob over there took $80 billion out of health, out of education and out of resources for state governments in this country.

They wanted to impose $7 on the poorest people in this country every time they went to see a doctor. They did not tell the public that when they went to the election. They wanted to increase the PBS. Every time you got a prescription you were going to pay more. They cut the pension. They cut the rate at which the pension would increase, which was an effective cut to the pension in this country, so retirees lost some of their benefits. Pensioners on the pension lost some of their pension. People on family tax benefit B lost money when their children turned six.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, I raise a point of order on relevance. This is actually a topic picked by the Labor Party, but Senator Cameron cannot seem to stick to the topic in seven minutes. It is such a weak matter of public interest that he cannot do that.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Senator Canavan, there is no point of order. That is a debating issue.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

I can clearly understand why Senator Canavan would want to shut this discussion down. Senator Canavan purports to represent low-income people, but every action that Senator Canavan has taken in here rips away at the living standards of low-income people. What I am trying to say here is that they are a government that cannot be trusted, so, when they stand up and say there is no GST there, there is a GST of 15 per cent waiting there.

Peter Hartcher in The Sydney Morning Herald this morning exposed it. They asked the Treasurer that developed the plans for a 15 per cent GST. The GST is on its way, and the same people that lead this country sat around that cabinet table and inflicted all those problems on the community as a result of that first GST.

This government has not changed one iota. The GST is about attacking those that can least afford it. You will pay an extra $3,200 a year if you get an increase of 15 per cent in the GST with no change to the base. If it ends up being on fresh food, health care, education, water and sewerage, you will pay an extra $6,200 a year. It will stand up and deny it, but it is clear. That mob over there and their minions out there—the Business Council of Australia, ACCI, the business groups—all want a cut to company tax, and how do they want to pay it? They want it to be paid—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Order! Senator Cameron, address your comments through the chair, not through the gallery, if you would, please.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

Through the chair: what they want to do is force the poorest people in this country to pay for a cut in business tax. The theoretical argument is that if you cut business tax you will create more jobs. Around the world, when you look at what has happened when business tax has been cut, the chief executive, the executives and the chairpeople of the board get more money and the workers get nothing. No more jobs are created. It is an absolute furphy that that is the position.

But what will we have here? We will have everything becoming more expensive. The least well off will be hurt the most. You cannot trust them when they say there will be compensation, because they are an untrustworthy government. It is the thin end of the wedge for more tax increases from a government that say they are a low-taxing government. It is simply unfair to force a GST onto the workers of this country, who are battling to keep their heads above water now, just to give their big business mates that fund their campaigns more money. (Time expired)

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

I am not going to take lessons on tax reform from the Labor Party. No-one in their right mind in this country would take lessons on tax reform from a party that has a record of absolute disasters and failures when it comes to reforming our tax system. They were only in government for six years last time, but they presided over failure after failure after failure on tax reform in this country. They put up a mining tax—an absolute failure. Only the Labor Party—maybe with the assistance of the Greens; thank you, Senator Whish-Wilson—could design a tax which raised no money in net terms. It raised some small amount of money, but after compliance costs and administrative costs no money was raised. All the hassle, all the rhetoric and all the rigmarole we went through in this country—

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

Mr Acting Deputy President, I raise a point of order. I just remind you—through you, Acting Deputy President—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Please.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

that there has to be some relevance to the matter of public interest before us.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

There is no point of order, Senator Polley.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

The matter of public interest is in regard to tax. The MPI is put forward by the Labor Party, suggesting advice on tax to this government. I am making clear that no-one—not just the Liberal Party, not just the National Party; not anyone—in their right mind in this country would take advice on tax reform from a party that presided over the disastrous mining tax. Indeed, it was a tax designed through the mishandled Henry tax review process as well.

That is not how we are going to run this process. We are not going to run it like the Labor Party did last time they were in government. That was an absolute failure. That was a lesson in how not to do tax reform. What they did with the Henry tax review was to rule out lots of options. They did not even let him look at the GST. Mr Ken Henry was the pre-eminent adviser on economic matters.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

Mr Acting Deputy President, I rise on a point of order. The matter of public importance does say, 'the plan to increase the rate of GST', and I have yet to hear that being mentioned by the senator.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Senator Lines, as I ruled when Senator Canavan took a point of order against Senator Cameron, that was debating point and I will rule the same against you. There is no point of order.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Thank you, because I think this motion does go to what the government is doing with tax reform, with our white paper process, our consultative process. It is important to contrast and to learn indeed from the mistakes of the former government and how they mishandled the tax reform process while they were in government. And they did mishandle it. I do not think anybody could deny that now. They instructed the most pre-eminent adviser on economic matters at the time, the then Secretary to the Treasury, Mr Ken Henry to not even look at the GST. They did not even have the guts to take advice about the GST from their Treasury secretary. That is how scared the Labor Party were of tax reform. Then when they received his report—which had nothing in it about the GST because he was told not to—just before Christmas in 2009, Wayne Swan took it to the beach and read it in between surfing trips. He was so scared by it, he did not release it for four or five months. He kept it under wraps in his office for four or five months. It was not put out to the Australian people for discussion. He was not brave enough and he did not respect the Australian people enough to allow them to look at it and to consider it, to take into account the views of the Australian people.

And what happened? Because the then government's response was developed in a cocoon, without input from the Australian people, without the antiseptic abilities of sunlight, we came up with a disastrous policy option of putting in place a mining tax which very few people could understand, which did not deal with the practical realities of the mining sector or the financial sector and ultimately lead to the destruction, probably, of a Prime Minister or at least played a major role. It was an absolutely disastrous outcome and we will not repeat it.

We are confident that the Australian people can have a mature debate about the tax system. They can have a debate which looks at all elements of the tax system. Of course, the GST is one of the most important parts of the tax system. It raises over $50 billion a year. It is an incredibly important source of funds for our state governments and, of course, it needs to be part of any review into taxes in our nation. Indeed, if you really believe the rhetoric of the other side about the GST, if you took Senator Cameron's contribution to its logical conclusions and if Senator Cameron, through you chair, were serious about the exaggerated and overwrought claims about the impact of the GST, why is the Labor Party not taking a policy to remove the GST? Why is the Labor Party not rolling back the GST? They have tried it before. If you really believe what they are saying about this tax, that it causes devastation across our landmark landscape, that it causes people to go into poverty and not be able to pay their bills, why are they not taking a policy to remove it?

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

It does.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Senator Lines, if you think it does those things, it would be an incumbent on you to take to the Australian people a policy to get rid of the tax completely but you are not doing that. It did not do that while you were in government. So your claims right now are exposed as the complete political rhetoric they are. They are not based on what you really believe impacts people. They are based on a political argument which you are seeking to have to focus on cost-of-living issues will.

The irony is that, on this side of the chamber, we are having a mature debate about what our tax system should look like and about how we can promote economic growth; on that side of the chamber they are proposing a massive tax which is going to hit poor people in this country. They are the ones proposing this tax. They are going to do it through another carbon tax. Just last week we saw the Leader of the Opposition, Mr Shorten, put forward a 45 per cent cut in our carbon emissions by 2030, almost halving our carbon emissions by 2030. The only way they are going to do that is through a new carbon tax or a new emissions trading scheme, which is another word for a tax. They are going to put another tax on the Australian people if they get back in power and guess who is going to be paying this tax? Guess who will be most exposed to paying Labor's carbon tax version 2.0? It will be the poorer households in our nation, just as it was last time.

The Australian people rejected the tax last time but the Labor Party are coming back for a sequel. We know it will hit the poorest people because the Labor Party did modelling on this when they were in government. They commissioned economic modelling from the Treasury when they were in government into this type of reduction, into a reduction of around 45 per cent in carbon taxes—44 per cent, to be precise. We know from that modelling, from the experts, from the Australian Treasury, what would be the impact of such a tax. The impact would be that income per person would be $4,900 lower by 2030 if we were to implement such a policy.

No-one is asking us to do this policy. It is beyond the proposals coming from other countries in Paris right now, yet the Australian Labor Party—the party which once represented workers, the party which was formed under a tree in Barcaldine to represent shearers of our nation—are putting forward a tax which will reduce the income of the average person by $5,000 a year, which will hit those industries which employ workers in this country, particularly in our steel, in our aluminium and in our power production sectors. Indeed under the Labor Party modelling on the carbon tax, all 37 coal-fired power stations in this nation would close—all of them.

I know Senator Whish-Wilson and Senator Rice will be licking their lips at the prospect that 37 coal-fired power stations would be out of action but it is not the stated view of the Labor Party. The Labor Party do not believe in shutting down our coal-fired power stations; yet they are pushing a policy which should have that very effect. What are they going to say to the people of the Hunter Valley, what are they going to say to the people of the La Trobe finally, what are they going to say to the people of Central Queensland who lose their jobs because they are pushing a policy which is are ideologically driven and will not deliver a practical result for the environment and will make us economically poorer? From that modelling we know that the coal, oil and gas industries would be around 23 per cent lower than they otherwise would be in 2030, that the coal mining output would be 42 per cent lower and the aluminium industry would halve under their model

These are their figures. They are not my figures, they are not Senator McGrath's figures, they are not any government minister's figures. They are the Australian Labor Party's figures from when they were in government about this particular policy option. It is complete madness. It is madness on stilts to be proposing such a tax, which would hit the poorest Australians the most. We would not be able to afford compensation either, because this policy actually reduces their economic growth.

We on this side are focused on tax reform ideas that will promote economic growth and job creation. Yes, that might mean some change to the mix of our tax system, but that is how we are going to afford a bigger pie which we can share among all Australians to fund all the public services we expect and to make sure every one of us will be better off as a result of that change, as was done with the GST. The way you do not do tax reform is to put taxes on individual sectors of our economy—wealth-producing ones like coal, aluminium and steel—which would lower economic growth, shrink the economic pie and make it harder to make sure every Australian can have a better day tomorrow than they have today.

That is what we are focused on. We are focused on making a brighter and stronger economy for tomorrow than we have today, and we will do that through considered, well thought-through and consultative tax reform. We will not impose massive new taxes on individual sectors of our economy that seek to divide our community, lower our economic growth and make us all poorer.

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

A progressive tax is when your tax rate is leveraged according to your income and your wealth, so income taxes are a progressive tax. A regressive tax is when rich people pay the same rate of tax as poor people, so a regressive tax is a GST, a goods and services tax. Any high school or first-year economics student would be able to tell you that. The Greens do not support regressive taxes.

This debate is not just about the impact that this tax is going to have on those Australians who can least afford to pay more of their disposable income—what little they do have—on goods and services in this country. It is also much bigger than that; it is about the debate we should be having on real tax reform. As soon as we go down the GST path there will not be any discussion on other tax options. The government has a green paper and a white paper to discuss tax reform, but all we hear about now is GST. It has become the political football. It has become the national conversation.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

You chose the topic!

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

Let's talk about what we do need to talk about, Senator Canavan, through you, Mr Acting Deputy President Williams. We need to talk about getting rid of capital gains tax and the concessions that go with capital gains and with negative gearing.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

Did you run this through the party room?

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

Yes, Senator Canavan, we have very strong policies, through you, Mr Acting Deputy President.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Order on my right! Disregard the interjections, Senator Whish-Wilson.

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

We need to talk about getting rid of negative gearing, making housing more affordable and getting rid of capital gains taxes. We need to talk about progressive superannuation tax concessions. We need to talk about getting rid of fossil fuel subsidies. There is so much more we need to be focusing on in tax reform in this country. I sat in here until this government got elected, listening to them talk about how each Australian household was going to be slugged under a price on carbon. Guess what? According to work we had done by the Parliamentary Library, at a 12½ per cent rate the GST is going to cost households an extra $31 per week. A 15 per cent GST is going to cost households an extra $62 per week—that is $240 a month. Multiply that by 12 and we are talking about a significant burden for those Australian households that cannot afford to pay it.

In comparison, the carbon price, which was all we ever heard about in this place, was $11 per week. I know that you, Mr Acting Deputy President, have spoken on this as well. If you want to talk about burdens on households, then GST is your No. 1 culprit. What concerns me most is that this will stymie real debate on tax reform in this country. There is a whole range of things that should be on the table that will immediately get shunted into the too-hard basket if we go down the GST road. The Greens will not be supporting a tax that makes life harder and less fair for Australians, particularly for those on low incomes. Why should a multimillionaire like our Prime Minister, Malcolm Turnbull, pay the same rate of tax on his groceries as someone who is on social security, or is a struggling single mother who has to provide for her children? How is that fair? It is not fair, and that is why it is called a regressive tax.

We need to look at a taxation system in this country that not only raises revenue,—in my opinion, that is a secondary consideration—but can make the country fairer and more equitable. Hopefully we will find a choice of policy mix that achieves both, that makes this country fairer and more equitable and raises the revenue we need to balance budgets over a cycle. This is not just about how we can make money quickly—a quick fix. This is about how we can improve our country. Let me tell you, if you want to make this country more fair and more equitable, then GST is the worst possible thing you can do. It is the worst of all the options we have in front of us for making this country more fair and more equitable. This is the debate we have to have. It is irrefutable that the GST is a regressive tax. Let's talk about how we can improve this country, raise revenue, make housing more affordable and help those Australians who are in need.

Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

I rise to speak about the Abbott-Turnbull government's plan to increase the rate of GST, and to broaden its base. With Christmas just around the corner, all the kids are starting to write their 'naughty and nice' letters to Santa, so I thought it was appropriate and timely to talk about the government's 'naughty and nice' lists regarding what they are doing to support families with the cost of living.

Unfortunately, when it comes to the cost of living for Australian families, there is nothing on the government's nice list. In fact, it is completely empty. Their naughty list, however, is another story. This list is a lot longer. This list whacks Australian families left, right and centre. But the naughtiest thing of all on this list is the 15 per cent GST that will increase the cost of everything and hurt every single Australian family. If Mr Turnbull gets his way, the cost of everything will increase and everything will cost more.

For families already struggling to keep their heads above water, increasing the GST will only push up the cost of living, making everything more expensive and leaving families worse off. Every time they have to pay a bill, they will be paying more—be it water, gas, electricity, mobile phones, rates or the internet, it will all cost more. Every time they stand in line at the supermarket checkout, they will be paying more. In fact, they will be paying more than just the 10 per cent, up to the 15 per cent on most items. When it comes to fresh fruit and vegetables, they will be paying 15 per cent more. Every time they go to the doctor, every time they have a hospital visit, every time they have a pathology test, they will be paying more on each and every one of those. Every time they buy a new school uniform for their children, every time they buy their schoolbooks, shoes or clothing or pay for public transport, they will be paying more. Why? It will be because of this government. Whatever they do, every Australian and every Australian family will be paying more.

This is why Labor will never support Malcolm Turnbull's plan to raise the GST. We will never support a tax that is regressive and will hurt those who are the most vulnerable in our communities. There is nothing fair about jacking up the price of everything, especially for those families and those individuals who can least afford it. The government is hurting Australian families instead of helping them. We know they are an unfair government. We know that when they went to the last election, they said there would be no new taxes, there would be no surprises. What did we get? We got cuts to health, cuts to education and cuts for pensioners. Every single thing that this government have done through their last two budgets has been about hurting the most vulnerable in our communities. There is no other way to put it: quite simply, this is a government that is clearly out of touch with the Australian community.

A lot of people have told me how they had a sense of relief when those on the other side in the Liberal Party knifed Tony Abbott. They felt a sense of relief that Mr Turnbull was now Prime Minister. Slowly but surely, it is now sinking in that they have been dealt a dud, because this will be the Prime Minister who will increase the GST, a regressive tax—a tax that will be supported by some in the community.

We hear those on the other side quoting premiers from various states around the country who are talking about the GST. Since this government has come to office, they have cut funding to those states. They are bleeding the states dry and they know they will have little choice, because they will not be able to deliver the important services that they need to deliver to their communities while this federal Liberal government are cutting their funding and making it more and more difficult.

Let's face it, it is a simple thing for those on the other side to clear up the concern about this side talking about this increase to the GST. All they have to say is: 'There will be no increase to the GST. The GST will not be raised to 15 per cent.' It is very simple. But they say that everything is on the table—that includes increasing the GST. What do they do? They come in here and accuse us of being scaremongers and raising concerns unnecessarily in the community. But we know, as the Australian people know, that it is those on the other side who won the last election with their three-word slogans, putting fear into the community, misleading and lying to the Australian people. That is not we are doing. We are saying very clearly that we will never support an increase to the GST. It will not happen. It is against everything that the Labor Party believe in.

It is quite clear that the Liberal government will be getting a bag of coal for Christmas and Malcolm Turnbull is the Christmas cost-of-living Grinch. It is regrettable, because the Australian people put their faith in this government and they have been badly let down by those on the government benches. (Time expired)

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

For anyone listening to this debate, I do not think it needs me to emphasise the complete lack of any conviction or truth in the arguments put forward by the Australian Labor Party. There is only one politician I have ever heard talking about a 15 per cent increase in the GST—that is, the Labor Party Premier of South Australia. The Labor Party Premier of South Australia is the only person I have ever heard talk about a 15 per cent increase in the GST. All of those pious words, that lettuce-leaf attack from the Labor Party in this debate, supported by their Green allies, is simply a straw man. It is something that they have made up and something they are trying to scare the Australian public with.

I entered this debate in rather a unique fashion. I think I am the only senator in this chamber who was there when the original GST debate was had and when the GST was implemented. I remember the same arguments from the ALP at the time: how awful it was, how terrible it was, how it was going to destroy everybody and hurt all those on low incomes. Subsequently, they came to government and did they do one thing at all to get rid of the GST? We knew that would be the case. We said to them back in the original debate, 'If you think this tax reform is so bad, give us an undertaking that you will reject and repeal the GST should you ever become the government.' Well, they did become the government, more to Australia's shame and pity, and did they do anything about removing the GST? Of course they did not. All of the arguments you hear from the Australian Labor Party senators—I have heard them all before. They are all so disingenuous, so mischievous and such a real lie as to the present position as not to warrant any relevance at all. I am sure the public of Australia understand that.

I am sorry: there is one other person that has mentioned 15 per cent in the GST, I beg your pardon, and that is me. I have made it clear that, having made a promise back in the 1998 legislation, I would never be part of a parliament that voted for an increase in the GST; I would be voting against it, if the Labor Party or anyone else ever brought up a proposal for an increase in the GST.

I remember well the 1998 election campaign: we went to the election telling the Australian public we were going to introduce a 10 per cent GST. At the time, the Labor Party, the media and the ABC all said: 'You'll introduce it at 10 per cent. You'll do what New Zealand has done. You'll increase it to 12½ per cent then 15.' John Howard and I and everyone else in the government at the time signed in blood that we would never increase it beyond 10 per cent, and I intend to discharge that commitment I made to my electors at the time.

I have said that I would go back to the original proposal that the people of Australia voted for when we had the courage to take that proposal to the election—that is, it was to be a broad based GST at 10 per cent with appropriate compensations for lower-income groups. We had to change that to get it through the Senate at the time, but I would go back to it. That is what the Australian people in that election agreed with, and I would go back to the broad based GST at 10 per cent.

I remind any listeners, because the Labor Party try to confuse the issue: with an increase in the GST, the money goes directly to the states. The federal government, the then Howard government, the Turnbull government, if they were looking at a broad based 10 per cent—any increase in revenue does not go to the federal government; it goes to the state governments, half of which, regrettably, are controlled by the Labor Party. And would the Labor Party give back any additional funds they might have, if there was a broad based GST? Of course they would not.

I repeat: the only person to have called for an increase to 15 per cent is a Labor Party politician—the Premier of South Australia. Yet you have the hypocrisy of senators from the Labor Party coming in here with all this bleating and bleeding. Why don't they go and talk to Mr Weatherill, if they are so concerned about it, because he is the only person who has spoken about an increase in the GST to 15 per cent?

The Labor Party, and we know you cannot believe them—we had a proposal for a 10 per cent GST and we actually took it to the Australian public, who endorsed our proposal—before the 2007 election promised the Australian people they would never, ever introduce a carbon tax. It was a solemn promise, a week out from the election, two days out from the election, 24 hours out from the election—a promise repeated and repeated by the leader and the Treasurer of the Labor Party: we will not introduce a carbon tax. What was the very first thing they did? Introduce a carbon tax.

The contrast between the Liberal and National parties, and the Labor Party could not be more stark: on our side, if we have a proposal, we take it to the Australian people, who in our case, endorsed it; in the Labor Party's case, they lied to the Australian people that they would not introduce a carbon tax and then, as soon as they were elected, came in and did the opposite.

We do have plans. Australia needs taxation reform. We are involved in a broadscale discussion on that now. That must happen, if Australia is to move forward, but we will do it honestly.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Senator Macdonald is right: the coalition—John Howard, in particular—did take his change of heart on the GST to the Australian people, which is the right thing to do. If there is a fundamental policy change, you ought to take it to the Australian people. Whether you like him or loathe him, John Howard did do the right thing and showed a lot of political courage in taking the GST issue to the people in the 1998 election. He nearly lost it but he scraped through, and you must admire the fact that he did go to the people in relation to that.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

And isn't Australia better off for it?

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Senator Macdonald asks if Australia is better off for it. If the sky did not fall in, then the answer to Senator Macdonald's—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Order on my right. Senator Xenophon, pay no attention to the interjections.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

There was some tax reform. The concern I have is: if we try and push up the GST and go down that path, that it will be regressive. This whole approach ignores some fundamental issues. We need to look at service delivery, of government working more efficiently and other sources of revenue where there are, if not loopholes, areas ripe for reform before we consider increasing the GST, which itself would be quite regressive. It would concern me to bring the GST across the board to include fresh food, health and education.

In relation to health and education, it is interesting that Henry Ergas—I think he is Senator Cameron's least favourite economist—in an opinion piece in TheWeekend Australian on 10 January of this year said that extending the GST to private health and education hurts the public system, creates longer waiting times and actually causes a distortion and more pressure on the public system. I think there is something in that. Also, a GST on fresh food, I think, sends the wrong health message in terms of what we need to do.

My view is that, before we even consider going down the path of an increase in the GST, we ought to look at other issues in terms of raising revenue: superannuation tax breaks are unsustainable in their current form. I think that the shadow Treasurer Chris Bowen came up with some pretty sensible solutions in terms of paying more tax on super, if you have more than over $2 million or $3 million—or thereabouts—in relation to your superannuation. I think that needs to be looked at very closely, because those superannuation tax concessions are unsustainable.

The other issue relates to negative gearing. I am not against negative gearing per se, but I think it can be tweaked to have a greater emphasis on new, affordable rental housing, which would make a difference in terms of those Australians that need to be housed in good, safe, quality accommodation. My concern is that unless we tweak negative gearing it will continue to cause the budget to blow out more and more. Also, we need to make sure that multinational corporations—the Googles, the Apples and the Microsofts of this world—pay their fair share in tax. These are just some of the issues we need to look at before we look at an increase in the GST that will hurt lower income earners and will hurt the poor and the disadvantaged in this country. There are a whole range of other measures we need to look at.

I want to make reference to something that I think is worth reading, something that I read some time ago, The Fourth Revolution by John Micklethwait and Adrian Wooldridge. John Micklethwait was editor-in-chief of The Economist magazine—I guess his politics are right of centre—and Adrian Wooldridge was a senior contributing writer. As I understand it, Mr Micklethwait now runs Bloomberg News as the editor-in-chief. They draw some interesting comparisons in terms of how the modern state delivers services most efficiently and in a way that does not compromise service delivery. Interestingly, despite that perhaps right-of-centre perspective from Mr Micklethwait, they have looked around the world at what has happened and where there have been good results.

One of those areas is Scandinavia, where the health system, in terms of outcomes, has improved. Costs have been reduced because they have worked on a model of social inclusiveness and on driving efficiencies, and that, to me, is the way for the modern state. I think our temperament here in Australia is closer to the Scandinavians than to the Americans in terms of social equality, opportunity and having a safety net for people that are most vulnerable. So that is the sort of approach we should be looking at. We should not be looking at increasing the GST, which would impose an additional, disproportionate burden on the poor.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

At least those opposite are consistent. The Turnbull government is at least consistent. It is going after the poor, the disadvantaged and those on benefits and pensions in the Australian community. They are consistent in doing that while completely ignoring the big end of town who put the big donations into the Liberal Party and the National Party to fund their election campaigns, and ignoring multinational tax evasion that goes on completely unabated. They are trying to create transparency around Mr Turnbull's companies and others that were on the secret list before it got published, yet they are hell-bent on making poor Australians and Australians on low incomes pay a big, fat, new tax—a massive five per cent increase in the GST that will go onto absolutely everything.

It just demonstrates how out of touch the Turnbull government are. They simply do not appreciate that those on low incomes or fixed incomes spend all of their income on day-to-day living expenses: food, rent, health, pharmaceuticals, school costs and so on. It takes up all of their pay or all of their benefit in a way that it does not for those on higher incomes—and particularly for politicians in this place. Those opposite, who go on and on, saying, 'Let's put everything on the table,' but focus on a GST, have no idea what it is like to walk in the shoes of someone on a low income. We have cleaners in Parliament House this week taking strike action against the government because of their failure to make sure that those cleaners get a decent wage increase. But before that they ripped money out of their pockets.

We have seen that every move this government has made is designed to really hit Australians doing it tough. This proposal is definitely on the table—it is not ruled out; it is definitely on the table; it was shopped around well and truly by Mr Abbott before he lost the prime ministership. We have not had Mr Turnbull come out and say, 'It is not off the table.' We have not had that categorical denial. We had Mr Turnbull on the radio in Adelaide saying that his view is that changes to the GST should be on the table. Of course, what would Mr Turnbull have in common with a low-income earner, a cleaner cleaning his office? Absolutely nothing. He probably has not noticed that they are not here this week. Well, I have, and I stand with those Parliament House cleaners. They deserve a decent pay rise and they certainly do not deserve a big, fat, whopping GST applied to every single thing they do.

The other group that I met with today are seafarers from the MV Portland. Again, there has been not a single word from those opposite about the plight of those seafarers who have been sacked by Alcoa. They have worked on Australian seas for 25 years with not one day lost to industrial action, and what has Alcoa done? With one flick of the pen they have sacked them. And guess what. They are going to be replaced by foreign workers earning $2 an hour. Do those opposite care? No, they do not. I met a seafarer today who has been at sea the 20 years. He has now lost his job. Do they care? No.

They bleat on every day about how they are creating jobs and how they are making Australians better off. They are not making seafarers better off and they are not making cleaners better off. On top of denying them wage increases and sacking them and letting Alcoa sack Australian seafarers and doing nothing about it, they want to impose a big, fat, new tax of 15 per cent on every single thing that those workers buy. It is not on. It is time that the Turnbull government acted in the interests of all Australians, not just those at the big end of town. It is time that we had some multinational tax transparency in this country. It is time that multinationals and those who earn a very big income—a much bigger income than a cleaner on 20 bucks an hour—started paying their fair share, started actually contributing. But, no.

No wonder some of the states are calling for a GST—the Turnbull government is starving them of funds. There are the massive cuts to education, which were not signed off by the Australian public. There are the massive cuts to health, which were not signed off by the Australian government. All of those funds have been taken away from state governments. Whether they are Liberal governments or Labor governments, they are all in the same boat, and they are desperate to provide those services. Yet we have, day in and day out, the Turnbull government absolutely refusing to categorically state that they will not introduce a big, fat new GST of 15 per cent on everything. A GST on food, on health, on education, on pharmaceuticals and on school goods to be paid by cleaners on 20 bucks an hour and paid by Australian seafarers from Victoria, who those opposite have no concern for, who have been sacked by Alcoa and will be replaced by workers on $2 an hour. Where is their concern? It is completely missing. Those seafarers are in the parliament. If you would like to meet with them, just talk to me. They will tell you what an increase of the GST to 15 per cent will do to them, as they face the unemployment queue. It is a disgrace. They should absolutely rule out a GST increase once and for all, but they will not do it.

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

I rise to speak on the motion. I am very proud of a government that has a holistic approach to tax reform. I am very proud of a government that actually considers all the evidence before it before it makes decisions. I remember in previous governments there was a media release here and a media release there. The chock backlog of legislation that has not even got through the Senate from that previous government beggars belief. Do not worry, bank the savings and plan the budget on the media release, but they never get the legislation through. That is the reality of how the opposition approaches the economic management of our nation.

When Senator Cameron stands up and says, 'The government cannot be trusted,' I would say the reality is that we have an opposition in denial. They are denying that today growth is going well, exports are up, our economic plan is working and Australians are more confident. Businesses are is more confident, and do you know what happens when businesses are more confident? They employ more people and more people have jobs. When a person has a job, they can provide for their families and they can provide for themselves rather than have the state or the Commonwealth government providing for them. Then, government can do what it should be doing, which is ensuring that those very poor and those that are unable to care for themselves, the severely disadvantaged and the disabled, have a safety net that we can afford. To sit here and listen to those opposite who think that money grows on trees and that this Senate can continue to accept all the spends and reject all the saves is just an opposition in denial.

When I think about what state governments have to fund, I want them to be able to fund excellent state primary and secondary schools. I want them to be able to provide the young people of this country with excellent state education. I want people to have a very positive and safe experience in our state public hospitals. That requires the state governments to have a revenue source with which to do that. To sit here and think that they have the possibility to do that is actually missing the point.

I am straying from my theme of 'denial'. The opposition are in denial about the role of economic growth and its relationship to job creation, and denial about our place as a nation in this very, very competitive world. They are also in denial about the relationship between government debt and deficit and the provision of services. They are in denial about their own record on tax reform, and it is a record that we are really proud not to follow. It is about spending a lot of money and getting some really good thinkers around a table to conduct a tax reform of this nation but ignoring the fact that we are in the Federation. They ignore the fact that the GST is within the tax mix. 'You can look at this, you can look at that, but you cannot look over there,' which is a shocking way to approach taxation reform in this country. We will not be following it, because we are not afraid of great ideas. We are not afraid of bad ideas. We are not afraid of ideas.

I thought it was going to be the year of big ideas. It might be the year of big ideas for Bill Shorten, but it is absolutely not the year of new ideas. They are so bereft of any idea that they have opened up the Keating playbook. They are thinking, 'What are we going to do? We've got "Mr 15 Per Cent" here. What are we going to do? When did we last have a leader that we could actually back?' Nobody has any credibility on the other side with backing either former Prime Minister Rudd or former Prime Minister Gillard, because somebody had their knives out for one of them at any one point. So going back to Keating. How did he actually win that unwinnable election? It was through a scare campaign, an absolute scare campaign, against the ideas of the coalition opposition at the time. What we have is a very frightened opposition. They are very fearful, and they are not putting forward any big ideas or new ideas. They are returning to the politics of old, of fear, mistrust and fragmentation.

We as a government are not going to stand for it. We have a positive vision for our nation, going forward into the 21st century, where science is the heart of our economic policy and will drive the transformations we need to make to be a 21st-century economy. Those young Australians who graduate in about 15 years time will be graduating into jobs that we have no idea will even exist right now. To be returning to the early nineties for your policy ideas just shows how behind the times you are.

As a National Party senator, I get offended when those opposite choose to say that I do not care about the poor, or that I do not care that people are losing their jobs. Absolutely I care, and I can guarantee to you that everybody on this side of the Senate cares about the welfare of the Australian citizenry. It is why we all came to this place. We want them to be the very best that they can be. We want them to hold jobs and to contribute their creative talents, wherever that may be. We want them to win a gold medal at the Olympics, or not. We want them to live in a society where they can be all that they can and should be and be safe. That means we need to have an economy that can provide them with that expectation. I do not back away from wanting to live in a society with a very strong safety net for those who are unable to do so. Do not come in here and say to me that I do not care about poor people. If you cared about poor people and their disposable incomes, you would not have come out with the tax on tobacco.

Senator Polley interjecting—

Seriously—you want me to show you the stats on the proportion of smokers who are poor and addicted? You will take out of their pocket money that they could use to feed their children. I think it is an absolute joke. It shows how out of touch you actually are.

We are very excited to be taking a holistic approach to our tax reform agenda to ensure that our tax policy going forward will be one that allows us to take advantage of all the opportunities that this century will offer and assist us with overcoming the challenges of the 21st century, ensuring that our society has the skills, education and jobs to take us forward.

In the brief time I have left: the GST is about the states, and the Labor premiers have been very clear in their remarks.

Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to this | Hansard source

I rise to speak on this matter of public importance:

The Abbott-Turnbull Government's plan to increase the rate of GST and broaden its base.

I also would like to make a few comments about the contribution by Senator McKenzie when she talked about caring for Australian people who are on low incomes—not her words but basically the intent of her contribution. This is a senator who is part of the government that wants to strip thousands of dollars from family tax benefits—from Australian families. They wanted to introduce a GP tax after they said there would be no changes to health. This is the same senator who said she was concerned about the cost of living for Australians, and yet they did not take it to the election. They were not brave enough to take these things to the election.

They also wanted to take money off pensioners. They ripped billions of dollars from the states and territories through health and education. And, of course, there was the classic: no money for unemployed people for six months. Living on fresh air! This is the caring attitude from those opposite. After listening to that contribution, you would not believe that these were their policies. There was denial in the chamber today and it was coming from Senator McKenzie. Most of those measures came out of the government's disastrous first budget. I think that, if the government senators were honest, they would agree that it was actually a disastrous first budget and that, if these measures had actually got through the Senate, it would be a sorry state of affairs for those vulnerable people that we just heard the senator say she actually cared about.

She also talked about the legislation that came through during the former Labor government. Of course, most of our legislation did get through. That was in spite of the slogan driven opposition of Mr Abbott at the time. They did not enunciate their policies at all. We all remember that they were on a unity ticket on basically everything that the Labor Party stood for. They never enunciated any policy. They never told people what they were going to do, so why should we trust them now when some of them say there is no proposal for a GST and some of them say everything is on the table? They cannot be trusted and have actually shown that.

Some people have been interested in the serialised feature that has been running in The Sydney Morning Herald which tells of a meeting between Mr Abbott, Mr Hockey and Treasury officials just before the leadership change. This was a meeting to discuss tax reform prior to the leadership change. On the agenda, according to the article, was a clear path to increase the GST from 10 to 15 per cent. It was also proposed to cut the top—

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, I rise on a point of order. I do not know if Senator Brown is trying to suggest that Premier Weatherill's 15 per cent tax is not an original idea—

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

That is not a point of order.

Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to this | Hansard source

I know they are sensitive on the other side. They have been tumbled. The Australian people are not stupid. They know what your plan is.

We had Mr Hockey come see Mr Abbott with the Treasury officials to talk about the GST going from 10 to 15 per cent. The Sydney Morning Herald article says:

By the time the change was fully phased in over two to four years, this would generate about $40 billion in extra revenue to pay for the other parts of the plan.

It goes on to say:

But the extra GST alone was not enough to pay for the tax cuts. To make up the shortfall, the government would have to make big cuts to spending.

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, I rise on a point of clarification. Senator Brown mentioned that the Labor—

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

That is not a point of order. Senator Brown, continue.

Carol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | Link to this | Hansard source

Thank you again, Madam Acting Deputy President. Seriously, I had to sit here and listen to the complete drivel from Senator McKenzie without standing up and making a point of order, and here she is! It is just ridiculous.

Honourable senators interjecting—

I know they do not want to hear, but the Australian public do. They want to know exactly what the government are planning to do. It is incumbent upon the Labor Party to let the Australian people know. We know work has been done. We know it has. They may not have the bravery and the courage that Senator Macdonald talked about with former Prime Minister Howard, because it appears that they do not.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

The time for the discussion has expired.