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Tuesday, 9 February 1999
Page: 2179


Mr BEAZLEY —My question is to the Treasurer. Treasurer, can you confirm Treasury's evidence to the Senate GST committee that Treasury has done no modelling of the employment effects of the GST?


Mr COSTELLO (Treasurer) —As I have said on a number of occasions, the Treasury has modelled all sorts of effects of the tax package, including prices, household expenditures and all sorts of other things. In relation to their modelling, they assumed, for the purposes of their modelling, no change in employment, not because they did not think that employment would be increased, as their evidence was that they believe it will be increased for a number of reasons, but because, if there was an assumption about an increase in employment in the figures, it would make the modelling even better—the advantages would be even greater. As the evidence showed, they took cautious assumptions, which could not be challenged on any basis, for all of the modelling work they did.

I would venture to say that if you actually put in the benefits to employment which follow from the following things: a more productive tax system; increased GDP growth; personal income tax cuts; the fiscal stimulus from the overall package—


Mr Beazley —Mr Speaker, on a point of order: the question was very specific. It was: has the Treasury done any modelling on this? He confirmed that they have not, and so anything else is irrelevant to the answer.


Mr SPEAKER —The Treasurer is in order and will continue.


Mr COSTELLO —If you factor in the undoubted employment increases which follow from a more productive tax system, the better allocation of resources, an increase in GDP, cuts in personal income tax, the simplified business taxation system and a fiscal stimulus, then the benefits become even greater. This is a new tax system which was put to the Australian people, which they openly voted for, and which the Labor Party cannot bring itself to support.