Mr BARRESI —My question is to the Treasurer. In light of the Premiers Conference to be held tomorrow, can you outline to the House what future financial assurance the Commonwealth offers to the premiers? Furthermore, what level of support exists for this proposal?

Mr COSTELLO (Treasurer) —I thank the honourable member for Deakin for his question and acknowledge the brilliant electoral victory that he had on 3 October. As the member for Deakin indicates—as part of the new tax system which the government was elected by the Australian people to implement on 3 October—we are introducing, probably, the biggest overhaul of Commonwealth-state financial relations since Federation. As part of that process, the government will be introducing a broad based indirect tax or GST, the whole proceeds of which will go to the state governments. As a consequence of that, the rate of that particular broad based consumption tax can only be increased by unanimous agreement from six states, two territories, the Commonwealth government, the House of Representatives and the Senate. This is a protection against rising taxes which does not exist in relation to Labor's wholesale sales tax which does not require agreement from any of the states or territories. This will give the states a growth revenue, which means that their revenues will grow in proportion to the economy as the economy grows—something that has been sought by the states for a very long time.

The Commonwealth has also indicated to the states that this is conditional upon the abolition of inefficient indirect taxes which are currently applied at the state level, such as: the bed tax, which will be abolished under this proposal; financial institutions duty, which will be abolished under this proposal; the bank accounts debits taxes, which will be abolished under this proposal; stamp duties, which will be abolished under this proposal. The opportunity will be created to make Australia a great financial centre by taking stamp duties off marketable securities and shares, that will be a great thing for this country. It will work in with the government's reforms to make Australia a strong economy and to create more jobs, as we saw in today's labour force figures. These were the best labour force figures since 1990. I think all members of the House, even on the Labor side, would be pleased to see the surge in employment that we saw over the last month.

The Commonwealth will offer to the states a guarantee, over the transition period, that they will not be worse off. Down the track, states will have a growth revenue which will give them increasing security in relation to delivering state services—hospital services, school services—funded from a growing tax base from a big reform which is a necessary reform for a new tax system for a new century from a new government with a mandate to introduce it from the Australian people.

Mr Howard —Mr Speaker, I ask that further questions be placed on the Notice Paper .