Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

When the GST was introduced by the Howard government, Prime Minister Howard was adamant that it would never, ever increase beyond 10 per cent. A senior caller on ABC radio in Perth in 2001 asked Prime Minister Howard:

If you were re-elected, will you increase the GST? You spoke on a program last year to say that, as a senior, I would be so much better off with the GST. Well, I know my sums don't add up.

Prime Minister Howard responded to the caller:

Well, the answer to the first question is no; we will not increase the GST.

When pressed further by the radio announcer about whether the GST would be increased, Prime Minister Howard said:

But we're not going to increase the GST.

The radio announcer asked:

Never ever?

John Howard replied:

We are not going to increase the GST. There are no circumstances in which the GST, in fact, needs to be increased.

We fast forward from that interview to 2015, when we have a senior Liberal National Party senator from Queensland, Ian Macdonald, saying:

I was around when this GST proposal was originally introduced and at the time I and everyone around from the Prime Minister down promised that it would never go beyond 10 per cent. We all swore in blood that it would not; that it would remain at 10 per cent and that's a commitment that I as one of them who gave it intend to honour.

Senator Macdonald from Queensland is not the only one in the current government who was in the coalition government that made that promise in 2000. I wonder whether the others will honour their commitments sworn in blood, including members of the executive such as the Deputy Prime Minister, Warren Truss, the Minister for Defence, Senator Payne, the Minister for Foreign Affairs, Ms Bishop, and the current Special Minister of State, Mr Brough. Other members of the then coalition government, Tony Abbott, Bronwyn Bishop, Bruce Scott, Ian Macfarlane, Warren Entsch, Bill Heffernan, Sharman Stone, Kevin Andrews and Senators Ronaldson and Abetz, all made the commitment that the GST would never, ever go above 10 per cent.

What we do know is that the Turnbull government is now considering breaking that sacred commitment to the Australian people and raising or broadening the GST. Prime Minister Turnbull indicated this on 3AW on 6 October 2015 when Neil Mitchell said:

But everything is on the table—superannuation, negative gearing, capital gains, tax—everything. The GST, everything is on the table.

Prime Minister Turnbull responded:

Everything is on the table. That's right.

Again, on ABC Radio National on 1 October this year, Prime Minister Turnbull said:

Fran, everything is on the table.

We know on this side of the House what the consequence of raising or broadening the GST will be: it will increase the price of everything. Every single one of my constituents will have to pay more. Every single one of my constituents who are struggling to make ends meet will have to pay more. It will cost my constituents more every time they get the groceries,    buy their children's school books, go to the doctor and pay for their electricity and gas bills, even if they go to the Rocklea market and stock up on fresh fruit and vegetables.

NATSEM modelling shows that, if the GST is increased to 15 per cent—a 50 per cent increase—and broadened to apply to fresh food, health care, education, and water and sewerage, an average family with a household income of $86,000 will pay an extra $6,200 per year. If the GST is increased to 15 per cent and the base left as it is now, that family would still pay $3,200 extra each year. If the base is broadened to include fresh food—heaven help us if that ever happens—health care, education, and water and sewerage but the rate is left at 10 per cent, that family would still pay an extra $3,000 per year. This would be an additional cost at a time when families are doing it tough.

The GST does not currently apply to fresh food—as you can see if you go to your grocery store—medicines and health care; school, TAFE and university fees; child care and early childhood education; or rent, mortgage payments and council rates. There is good reason for that. These are all things that we do not have a choice to pay for. They are what we call the essentials. Even if the government tried to compensate taxpayers by lowering the rate of income tax, that would not adequately compensate the people who would be worse off. We all know how these sugar hits used to bring in the hard vinegar turn out. You get a little bit of the flavour out of your mouth for a while, but soon after the pain comes and stays.

The NATSEM modelling shows that lowering the rate of income tax by five per cent would still make the lowest 60 per cent of households worse off, while the top 40 per cent would, effectively, gain at their expense. It is unfair and un-Australian. I cannot believe that the Turnbull government would do this rather than force big multinationals to pay their fair share of tax. Labor will never support an increase to the GST rate or a broadening of the base to include fresh food, health care or education. (Time expired)