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

I rise to make a contribution to the debate on the Treasury Laws Amendment (Making Sure Every State and Territory Gets Their Fair Share of GST) Bill 2018. Labor supports every state and territory and our Commonwealth getting their fair share of GST revenues. Federal Labor has consistently led the way in arguing for GST reform that addresses the needs of Western Australia while also preserving much-needed funding across the other jurisdictions.

It was of course Labor that first put forward policy to ensure that Western Australia got its fair share, without punishing the other states and territories. We announced this policy, our Fair Share for WA Fund, well over a year ago, at the end of August 2017. This policy recognised the issues that Western Australia had been experiencing and committed $1.6 billion at the time, funded by our sensible measures to improve the budget, which would have put Western Australia up to a 70c level. At the time, the coalition government criticised us for employing this top-up method. The then Treasurer, now Prime Minister, Scott Morrison, said, 'Top-ups forever is a mug's game.' This was merely the first in a number of inconsistencies in the government's approach to this issue, particularly over the course of last year. Indeed, after the government released its interim response to the PC inquiry, the Leader of the Opposition, Bill Shorten, again led the policy debate in July of this year when he said:

Make the floor the law.

This was also ridiculed by the government, but just what has the government now done with this bill? They've accepted a 70c floor and a 75c floor, along with top-ups going on forever.

The government's obstinacy was again on display when shadow Treasurer Chris Bowen, followed by the state and territory treasurers, unanimously called for a guarantee within the legislation so that no state or territory would be worse off as a result of the government's proposed new model. The government, at first, refused to heed these calls, saying there didn't need to be one because there was all this money available to the states. And yet, as evidenced in this legislation, Labor's position has been adopted and there is a guarantee within the legislation. While Labor has been consistent and principled in its approach, the government's approach has instead been to, at first, criticise what is a sensible proposal, then vacillate on their own position before, finally, backflipping.

Ultimately, however, we're pleased the government has seen the sense of Labor's proposals and broadly adopted them, albeit utilising them with a slightly different mechanism. The need for a reconsideration of how the GST is distributed is well known, particularly as it relates to Western Australia. Never in the history of the GST has any other state or territory fallen below 86c in terms of their relativity, except, of course, Western Australia, which got as low as 30c in 2015-16 and 2016-17.

It's important not to forget the role that a certain member of the Morrison government played in relation to the unenviable situation that Western Australia found itself in, particularly in relation to the GST. It was the then Treasurer of Western Australia, who, in early 2011, along with the then Premier, Colin Barnett, decided to raise royalties. This was a cynical and transparent attempt to force a change to the GST distribution so they could keep most of the money. And just who was that Treasurer? It was none other than the Attorney-General, Christian Porter, the member for Pearce. What was the result of this cynically engineered ploy?

Well, as the shadow Treasurer put it to the House, it was to make 'a complete and utter mess' of the Western Australian state budget.

Turning to the bill itself, the bill contains several elements that make up the government's proposal for the new GST distribution model. The bill makes changes to the GST distribution model, changing the equalisation method for horizontal fiscal equalisation from the fiscally strong state which was Western Australia to the strongest of either New South Wales or Victoria. The six-year transition period from the existing system to the new system starts in 2021-22 and finishes in 2026-27. This bill also legislates for a floor, which is precisely what Labor had been calling for. The bill contains a 70c floor for all states and territories in 2022-23 and 2023-24, rising to a 75c floor in 2024-25.

The bill also contains a mechanism whereby the Commonwealth will provide an additional top-up into the GST pool in perpetuity. From 2021-22 onwards, the Commonwealth will provide hundreds of millions of dollars to the states and territories: $600 million per year, indexed to GST revenue growth, from 2021-22 to 2023-24, rising to $850 million per year—again, indexed to GST revenue growth—from 2024-25 onwards. This will lead to top-ups of over $1 billion a year.

The bill also contains a legislated guarantee that no state or territory will be worse off. This is a cumulative guarantee. If a state's or territory's entitlement over the transition period from 2021-22 to 2026-27 is less than they would have received, the guarantee will activate. On balance, we think this is a reasonable approach; however, it's not as if there are no concerns about it. The government has only provided a guarantee for the transition period. What happens beyond that time? What is to stop GST revenue being taken away from jurisdictions such as Tasmania, South Australia and the Northern Territory? Notwithstanding that, we on this side of the chamber would like to see a long-term Labor government still in office at the end of this transition period. What could a future Liberal government do: cut schools and hospitals, as is their record and their preference?

The bill also contains a requirement for a review by the Productivity Commission on whether the changes are operating efficiently, effectively and as intended. The review will also look at the fiscal implications for each state and territory as a result of this legislation. The Productivity Commission must submit its report to the government by 31 December 2026. We have no issues with this review. I would note, of course, that the last time the government initiated a PC review into the GST it actually rejected the recommendations—and with good reason, given that the commission's preferred model would have been completely unacceptable.

I also note that this bill went through a short Senate inquiry. This provided the chance for states and territories to make submissions and to ensure that this legislation is doing what it is supposed to do. Again, let me make it clear that, while Labor will support this bill, it's not as though the states and territories did not raise concerns with the bill. Evidence to the Senate inquiry from the Victorian government went to the fact that the forecast of future relativities is subject to a high degree of variability, which could leave states and territories worse off. State and territory governments were notably concerned that the Commonwealth top-up funding might come at the expense of cuts to other funding arrangements. While a letter from the federal Treasurer to state and territory governments stated that 'any additional financial assistance referred to in the bill will not be offset or partially offset by a decrease in other grant funding to the states', there were still concerns raised.

Federal Labor will hold this government to account on its commitment not to cut other funding to states and territories. We will scrutinise the imminent MYEFO budget update to determine just how the Morrison government will be paying for these top-up payments. Labor senators are of the view that the letter from the federal Treasurer to the state and territory treasurers ought to be tabled during the parliamentary debate so that the government's commitment to this issue can be strengthened.

This is a government that can't be trusted. This is a government that is so consumed by its internal conflicts that it just can't get economic policy right, and this is another example. They have backflipped on each of the issues that Labor raised, and raised for due and proper reasons. This government is inconsistent. It's incoherent on economic policy. It makes promises and breaks them. Remember this government's commitment 'no cuts to education, no cuts to health, no cuts to the ABC or SBS'? Remember that?

Have a look at what they've done in the last few days. They have made cuts to Foodbank, reducing its funding from $750,000 to $427,000. This is an operation, a non-government organisation, that sets about trying to help the most disadvantaged in our country. Foodbank leveraged their funding to $8 million through support from business. Across the country, 2,600 charities rely on Foodbank's support. So the government has cut funding to Foodbank.

Trying to do some sleight of hand, the government have provided $444 million to the Great Barrier Reef Foundation—a small, private foundation—without a tender. That's great economic policy! They have provided $200 million to a project in Bob Katter's seat in return for his vote. What's that about? No wonder they're handing $200 million to a lower house member when they are in such a parlous state, when they are depending on the vote of Mr Katter.

They are providing $60 million to deliver One Nation's policy on apprentices. Why would anyone take up any policy position of One Nation, especially a policy position that the coalition are now describing as the 'bush wage' to support apprentices? It is basically paying for apprentices' employment in their first, second and third years to various levels. The government actually subsidises apprentices generally, across the country, to the tune of $9,000. This attempt to get the support of One Nation will cost $92,000 per apprenticeship. Where's the economic rationality in that? Where is the logic in these decisions that this government is making, when it's desperately trying to cling to government?

They're describing this so-called 'bush wage policy' as a 'pilot'. Well, if the pilot were run out across the rest of the country, it would cost $11 billion to subsidise apprenticeships across the nation. It's absolute economic nonsense. There are better, cheaper and more effective ways to deal with ensuring that apprentices are taken on, such as Labor's proposal that one in every 10 employees on government-funded projects is an apprentice. The government should stop this nonsense of trying to ensure that unions in the construction sector can't negotiate and reach agreement with their employer on employing apprentices. The government have made that illegal. By making that illegal, they now have to hand over $92,000 for every apprentice as part of their appeasement of the racist party, One Nation. They also provided $2 million to former Senator Bob Day to try and make sure that former Senator Bob Day voted with them. Then Senator Day had asked for $1.4 million to subsidise 20 apprentices, and the government handed him $2 million. Where's the economic rationale in that?

This government must be watched. This government is about making promises based on securing its own survival. Its priorities are crazy. It's no wonder that Prime Minister Morrison described his own government as 'muppets', and it's no surprise that former Prime Minister Turnbull described those that knifed him in the back as 'mad'. So we've got the M&Ms, the 'mad muppets', across the chamber. That's all they are—a pathetic, declining government; a government in chaos; a government that claim economic superiority but don't have an economic brain in their head. Despite this, Labor will support this bill. We'll support the bill, but we will continue to monitor the crazy decisions that this government makes. We will continue to oppose bad decisions. We will continue to oppose bad economic decisions.

Let's look at this government's record on economic decisions. What was their first position? It was an austerity budget in 2014-15 that would have made pensioners $80 a week worse off over 10 years and would have resulted in young kids getting no social security payments for six months—on the streets with nothing to spend and nothing to look after their basic needs. Then the government moved from that to handing the GST over to the states. Remember that economic policy? Prime Minister Turnbull announced it at Penrith Stadium, and it lasted a day and a half. Then they moved from that to other crazy propositions, like trickle-down economics—that workers would be better off if the big end of town was given $80 billion and the banks were given about $17 million. The government have no economic credibility. They are a mess. We need to get to an election and we need to get rid of these mad muppets as soon as possible. (Time expired)