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Wednesday, 16 February 2000
Page: 11870

Senator CARR (2:20 PM) —My question is directed to the Assistant Treasurer, Senator Kemp. I refer the minister to the Prime Minister's statement on Melbourne radio 3AW last Friday about the Commonwealth funding for hospitals, schools and housing. Is the minister aware that in response to the proposition that the Commonwealth will be providing less funding to the states for these services the Prime Minister said, `No ... we're providing less dollars, but because the cost of operating will fall, the real financial position will remain the same'? I ask the minister: did the Prime Minister really mean that the Commonwealth will be providing less dollars to the states, as this statement clearly implies?

Senator KEMP (Assistant Treasurer) —Let me make it clear that there are many winners under the GST, but there are probably no greater winners than the states. I say that for the simple reason that the states get the revenues from the GST—Labor states, Liberal states and any other states that are governed by any other party. The states have signed up to this deal. Frankly, what we would expect as a result of the GST is that states will not only be better off—we will have a simpler tax system—but also will have a guaranteed source of a growth revenue, which is very, very important. This will mean that the states themselves will have more money to spend on such things, Senator Carr, as education, health, welfare and other services that state governments provide. I think that is the reason why the states signed up—the states knew that they would be better off as a result of the tax reform process.

So I would say this: the states have got a tremendous deal out of tax reform, a truly tremendous deal. It is a once in a century deal which the states grabbed as quickly as they could for the simple reason that they will be better off and will be able to spend more on those very things which you mentioned.

Senator CARR —Madam President, I ask a supplementary question. Given that the minister has now acknowledged that the Prime Minister has in fact said that they are providing less dollars to the states, doesn't this statement of the Prime Minister last Friday completely contradict the commitment that the Prime Minister gave to the parliament on 12 November 1998 when he said:

... we have no intention of using the ... specific purpose payments to take away through the back door what we are clearly giving in a very generous fashion through the front door—

Was the Prime Minister dead wrong in his radio comment last Friday, or was he treating a commitment to this parliament as yet another non-core promise?

Senator KEMP (Assistant Treasurer) —Let me just mention the issue of promises. The one problem we have had with this Senate since the election is that the Labor Party is fighting to prevent us keeping our promises across a whole range of areas. The Labor Party is opposed to this government keeping its promises, and I can quote innumerable examples where the government has gone to the election with specifc policies and got a specific mandate and the Labor Party as one has refused to recognise that mandate.

One thing I can say to you, Senator Carr, is that unlike the Labor Party this government takes its promises very seriously and this government seeks to deliver its promises. Frankly, I think it would help if the Senate got out of the way and allowed the government to deliver its promises.