Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Tonight I want to expose the great sham of the Labor Party over federal-state finances, especially in my home state, where the state Labor government continues to cry poor when it comes to cutting taxes and providing proper government services. On Tuesday this week the Treasurer, Peter Costello, called on the states to use the buckets of GST windfall they are receiving to cut more state taxes and, in their usual fashion, the states have whinged. Even in my home state, the state Labor Treasurer cried foul and said the state had cut taxes to the tune of $150 million a year. What he did not say was that most of the tax cuts he referred to were forced on the states and on Tasmania by the Howard government to keep faith with the GST intergovernmental agreement between the states and the Commonwealth that was signed in the year 2000. I will say more about that later.

Treasurer Peter Costello pointed out that the windfall gain to the state—that is, what they are receiving in GST revenue over and above what they would have received under the old tax system prior to 2000—will grow from $2 billion in the current financial year to $3.4 billion next financial year and to $5 billion by 2009-10. Every cent of GST revenue goes to the states and territories and, in the current financial year, the total revenue is $39.3 billion. By the year 2009-10, this total is projected to grow to $46.6 billion or $5 billion more than what the states would have got had the federal Labor Party won the 1998 federal election and scrapped the GST.

In my state of Tasmania, the windfall is currently $107.6 million. By current projections it will grow to $125 million next year, then to $144 million. By the year 2009-10, it will have grown to a windfall of $154 million a year—that is, $154 million more a year than if federal Labor and their state cronies had got their way in 1998. It means that in the coming Tasmanian budget in May there will be enough windfall in the GST fund, $100.4 million, in the Tasmanian budget to provide Tasmanians with 25 new ambulances, three new high schools, three new district hospitals and 122 new homes for housing tenants.

From 2006 to 2010, the windfall payments for Tasmania will accumulate to $532 million and, if you include the windfall paid out to my state since the year 2003, the total is projected to be $811 million by the year 2010. The Tasmanian government Treasurer often claims that this money is peanuts in proportion to the $3 billion a year state budget. He forgets that if he had had his way, there would have been no windfall at all.

Let us measure the so-called smallness of the $811 million windfall between 2003 and 2010: at an average of $100 million a year, this windfall could create 2,500 new and full-time jobs a year and wipe out Tasmania’s unemployment, which is currently 13,300, in five years; it could wipe out payroll tax of $210 million a year in Tasmania in almost two years and provide a huge boost for the business sector and employment; it could build 400 housing division homes—and that is estimated at $250,000 a unit; it could build five high schools—for example, Reece High School in Devonport cost about $20 million to rebuild; or it could build 10 regional hospitals. The new Queenstown hospital is estimated to cost around $10 million.

So this money is not peanuts. The regime of tax cuts forced on the states and territories by the Howard government and made possible by the GST is worth almost $4 billion across Australia this financial year, plus a further $1.7 billion by 2010. That is in addition to the more than $80 billion in Howard government tax cuts for persons and business since 1999.

The Australian government has forced the states to abolish financial institutions duty, debits duty and a range of stamp duties, including mortgage duty—but sadly not all stamp duties as yet—lease duty, cheque duty and marketable securities and non-real conveyances. In the meantime the Tasmanian government has received buckets of GST revenue. Rivers of GST gold are now flowing throughout Tasmania.

In the carve-up of GST finances, Tasmania receives the equivalent of $1.55 for every GST dollar going to the states so that the state can provide services equal to anywhere in Australia. As I have said: every cent of GST revenue goes to the states and territories. A great lie was perpetrated by the Labor states and territories. They forget that they fought tenaciously against the GST in a purely political scare campaign to support their federal Labor mates. But now they are swimming in GST revenue and they have the gall to squeal when the Howard government says, ‘Cut those taxes you promised to cut when you signed up to the GST.’ There is nothing wrong with that assertion.

This is an era far divorced from the Hawke and Keating eras, when Tasmania suffered cumulative cuts of $300 million through successive federal cuts, starting in 1985, and the states and territories had no idea how much money they would be getting from one year to the next. Now they have got buckets of GST and, with it, certainty in being able to plan ahead.

But the other great lie, as I have mentioned, is how the Tasmanian government has not only taken all the GST since 2000 but also claimed credit for the tax cuts it was forced to introduce. In a media statement on Tuesday in response to the federal Treasurer’s statement, the Tasmanian Treasurer, Michael Aird, said the following, and I quote:

The Tasmanian community is already benefiting to the extent of over $150 million in tax cuts each and every year.

More than $1 billion worth of tax cuts will have been provided by the State Government to the Tasmanian community over the period 2001-02 to 2009-10, over half of which results from State Government initiatives.

Mr Aird’s first admission is that only about half of the $1 billion tax cuts he referred to could be classed as initiatives of his government. The second revelation is his gloating about $150 million in tax cuts each and every year. Let us hear the truth. I will now read from explanatory notes in the 2005-06 Tasmanian Budget papers, no doubt written by Treasury officials. The notes say:

Beginning with the 2001-02 Budget, a series of complementary tax relief measures introduced by the Tasmanian Government have combined to deliver $128.0 million per annum in tax relief to Tasmanian businesses and households. In addition to this, the Government’s decision to introduce other taxation relief initiatives, as part of the 2005-06 Budget, including the abolition of mortgage duty and stamp duty on non-real-property business conveyances over the coming years, will bring the total benefit to the community from tax relief provided by the Government to approximately $155.0 million per annum by 1 July 2008.

Mr President, those ‘complementary measures’ are those forced on the states by the Howard government in the intergovernmental agreement signed in 2000.

It is the same story with the First Home Owners Scheme, which was responsible for thousands of Australians and Tasmanians being able to afford their first home and get out of the rental roundabout. This scheme has been worth well over $100 million to Tasmanians. It was created and funded by the Howard government and managed by the states, but the states, including the Tasmanian government, tell their electors that it is their scheme. Which Labor spin doctor thought up that Labor lie?

So what do the Labor states and territories do with all this GST money? They waste it. In Tasmania we have a government that is hell-bent on the maladministration and mismanagement of the Tasmanian economy. This is now a big issue in our state. The pulp mill approval process where the Premier has allegedly heavied Resource Planning and Development Commission boss and former judge Christopher Wright is a case in point.

If you want an idea of how a Rudd Labor government would manage our finances, apart from raiding the Future Fund and the savings put aside for our kids and grandchildren to pay for Labor’s current election stunts, then just check out what the Labor states have been up to. It was revealed last year how the Lennon government was squandering its GST revenue at the expense of health and education services—that was according to a Productivity Commission report. That report made it clear that Tasmania is well behind with  regard to providing those education and health services. It also showed that Tasmania had too few ambulances on the road at any given time and poor response times; in fact the worst in Australia. It is not a good record.

The GST was designed to provide Australians with a proper level of public services wherever they lived. It is a growth tax which grows with the economy. It is designed to ensure all Australians share in the nation’s prosperity through adequate services and lower state taxes. Sadly, the state governments, especially in my home state, have let them down through gross mismanagement, special deals for special mates, deceit and maladministration. (Time expired)