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Wednesday, 24 November 2010
Page: 3570


Mr HOCKEY (10:37 AM) —Mr Deputy Speaker Thomson, may I take the opportunity to wish you a very merry Christmas and a happy new year. There is goodwill all round here, except for this Federal Financial Relations Amendment (National Health and Hospitals Network) Bill 2010. This bill enables the Commonwealth government to retain part of the GST for dedication to the National Health and Hospitals Network fund and about $50 billion in GST revenue over the current forward estimates will be rebranded as increased federal government spending on health. This bill does not provide the details of the new health arrangements. It simply delineates the financial aspects of the government’s new health policy.

Under the agreement, the Commonwealth will cover 60 per cent of the costs of the public hospitals and 100 per cent of a range of other healthcare services in return for the states handing over about one-third of their GST, although the exact proportion differs between states. So this is simply about shifting money from the states to the Commonwealth. Ironically, it comes from the Commonwealth, it goes to the states and now it is going back to the Commonwealth, and this is dedicated reform, according to the Labor Party in government. States will also be eligible for additional money called top-up payments.

There is no detail about the criteria under which these new payments will be provided. These will be at least $15.6 billion, although the minister can specify a lower amount. The payments will not commence until 2014-15. How convenient that might be. It just happens to fall outside of the existing four-year budget. It is amazing how these additional payments just pop up at a date well after the next budget forward estimates.

The motivations to fix the hospital system are noble—we all want to have a better hospital system—but the policy prescription is inadequate. The hospital system needs good public policy, but a simple cash grab by the Commonwealth is not the answer. The government’s new health policy aims to achieve accountability by better delineation of health responsibilities. However, the new model adds an extra layer to the administration of the health system and will not end the blame game that is the nature of health care in Australia.

Measures such as the local hospital networks sound good in practice but will do nothing to alleviate incompetent management in some hospitals. The litmus test for these health reforms will be better and more accountable service under this new system. The government has failed miserably to prosecute this case. We all know that the Labor Party just cannot manage money. The Minister for Resources and Energy knows that, and so do the Australian people. This bill drives a massive increase in revenue for a Commonwealth government that has proven itself incompetent and wasteful in the delivery of services. The total revenue redistribution that is shuffling money here and shuffling money there of $50 billion over the forward estimates involves a substantial amount of effort and it will lead to a significant increase with little planning as to how it is spent.

We are concerned about the lack of detail in this bill. Nowhere in the bill or in the explanatory memorandum is there mention of the precise amount of the GST to be taken from the states. If it was about a third, as indicated by the Treasurer in his second reading speech, it would be about $56 billion in additional federal revenue over the three years of the forward estimates—just a lazy $56 billion lying around which the federal government is just plucking out of the states. In the Mid-Year Economic and Fiscal Outlook, released a week after the Treasurer presented his second reading speech on this bill, it was said to be $44.6 billion over three years of the current forward estimates, excluding Western Australia. At this stage the amount involved looks to be around $50 billion. Under the proposed section 6A, the minister determines the amount of GST revenue to be paid by legislative instrument. This decision of the minister cannot be disallowed by parliament. This is an incredibly dangerous precedent for the federal government, which has shown time and time again that it will use any means necessary to pay for its reckless spending. I nearly choked on my oxygen yesterday—


Mr Billson —Your weeties.


Mr HOCKEY —It was well past weeties time. I choked on my oxygen in question time yesterday when the Prime Minister said somehow the Liberal Party is the party of higher taxes. The Prime Minister so conveniently forgets that she was a member of a cabinet that dared not speak its name under the previous Prime Minister, Kevin Rudd, that introduced a new tax on alcohol, a new and higher tax on motor vehicles and higher taxes on cigarettes and made significant changes to taxation arrangements for a whole lot of different areas that were enjoying certain concessions. Of course, the Prime Minister forgot that yesterday, and the Prime Minister forgot that she is now contemplating a carbon tax and that she was advocating an emissions trading scheme and a mining new cost. Of course, the Prime Minister forgot old Marn’s mining tax, but there have been so many versions of it that it is hard to keep up. It is just a lazy $10 billion, isn’t it, Marn? What are you going to do with the royalties there, son?


Mr Martin Ferguson —Industry has signed up to it.


Mr HOCKEY —And industry has signed up to it. Is that right? Twiggy Forrest, Gina Rinehart and a whole lot of other people who would consider themselves from time to time part of the mining industry would say that industry has not signed up. We really look forward to seeing that bill in this place. I know there is a history in the Labor Party of giving ministers hospital passes. Look at poor old Peter Garrett on the receiving end of pink batts and green loans. What about the former Minister of Education, Julia Gillard, who was on the receiving end of the BER program that she thought was a great idea—such a great idea that she had to commission an independent inquiry into it? But there is more to come out of that today, I suspect. Now we have a Minister for Resources and Energy who thinks that it is a great idea to tax the resources industry. Mr Deputy Speaker, I know I am indulging here a little—


The DEPUTY SPEAKER (Mr KJ Thomson)—You are right about that.


Mr HOCKEY —But I do want to give a little bit of career advice to the Minister for Resources and Energy: take up that ambassadorial appointment before the end of this term, old buddy. You do not want to be the one in this place to miss out on the opportunity to get your mining tax through. You will be blamed. So while you have some leverage on the Prime Minister, take that ambassadorial appointment.


The DEPUTY SPEAKER —The member for North Sydney will return to the bill.


Mr Billson —Martin the Mountie could go to Canada and follow up his love for mining.


Mr HOCKEY —That is right. Canada is nice. Martin always gets his mounties, does he?


Mr Billson —He has done more for mining in Canada than in Australia.


Mr HOCKEY —Anyway, some states will have to sacrifice up to 50 per cent of their GST revenue. I do not think they are very happy about that. Quite frankly, Western Australia is so unhappy about it that it has not agreed. So this is only partially a bill for part of Australia because that great chunk of Australia on the other side of the black stump is not prepared to give up its GST. In the case of the ACT, Treasurer Katy Gallagher’s office confirmed that the territory would be handing back between 48 and 50 per cent of its GST to Parliament House.


Mr Billson —It will not have to travel very far.


Mr HOCKEY —No, it will not. Queensland health minister Paul Lucas’s office said ‘the state would be handing back 39.3 per cent of its GST’. And the Queensland shadow health minister claims that Queensland will be forced to hand over 42 per cent of its GST in 2012-13.

What happened was that the Labor Party started running out of money. They not only spent all of the surplus but also raided the net assets of the Commonwealth. They started borrowing money because they ran out of money to pay for pink batts and school halls. They imposed their alcopops tax and their tax of motor vehicles at exactly the wrong time. Of course, that did not work because they started to run out of money again. They then introduced the mining tax into the public debate. When they ran out of all of that money and started borrowing $100 million a day they raided the GST cookie jar, which is the money that goes to the states.

This mob has spent everything that moves and you have to ask yourself, ‘Where does it go?’ It goes to the states. As Margaret Thatcher said, the problem with socialism is that sooner or later you run out of other people’s money. That is exactly what this mob are doing—they are running out of taxpayers’ money. Despite handing over significant sums of money, there is no guarantee that the states are going to end up with improved health care.

The bill is premature in discussing final arrangements because they are not finalised. The explanatory memorandum to the bill notes:

The extent of expenditure covered under the Commonwealth’s new funding commitments will be finalised with participating States as part of the implementation of the NHHN reforms. This is not covered in the amendments to the FFR Act.

So this worsens the blame game in health funding that the agreement was meant to stop. This suggests that in late 2010 the government has not finalised the figures for how much money will be provided to hospitals and health care facilities. This is quite a dangerous precedent for our parliament, especially with the upcoming election in New South Wales and the Victorian election this Saturday, where the state oppositions have expressed strong concerns over the new health arrangements. I quote the shadow Treasurer in New South Wales, Mike Baird—a very good man—who said this:

The GST is efficient and stable and grows with the economy. Do the Premier and the Treasurer of this State think this State is no longer going to grow, so they are happy to give away the GST? That could be their argument. Why did John Brumby and Colin Barnett argue so strongly? Colin Barnett continues to argue strongly that he does not want to give up the GST but is happy to contribute to the new program. We understand that health costs are rising at a rate that is unsustainable for the States to manage them, and the States want the Federal Government to contribute. We are happy to make a contribution but not from our growth tax. Why should we give away our growth tax, which is the only tax that grows with the economy? The National Health and Hospitals Network agreement contains some good points. What is the State’s GST contribution that this Labor Government has signed up to? There is nothing mentioned in that agreement, no percentage amount. That means that the amount we are going to give in GST is a blank cheque.

It is a blank cheque. I was in this place sitting in the position where old Martin is now—


The DEPUTY SPEAKER —The member for North Sydney will refer to members by their titles.


Mr HOCKEY —Sorry, the Minister for Resources and Energy. As Minister for Financial Services and Regulation, I sat in that chair for three days—I think that is why it has a little sag in it—as we passed through all of that GST legislation which the Labor Party opposed root and branch. In fact, the former Prime Minister, the member for Griffith, described the day the GST came in as ‘fundamental injustice day’. He so hated the GST that he wanted to collect it himself. That is why he negotiated this health agreement.

I say to the Minister for Resources and Energy that eventually your history catches up with you. On this occasion there must be just a tinge of embarrassment at the hypocrisy of the Labor Party once so desperately opposing the GST but now wanting to take it themselves. That is how opposed the Labor Party were to the GST. They thought it was a very bad tax.

You may remember that Kim Beazley, the former member for Brand and Leader of the Opposition, said something to this effect to his caucus: ‘We are going to surf the wave of GST all the way into government.’ The members for Dunkley and Bonner remember that. If I was the Minister for Resources and Energy or the Treasurer, I would pick up the phone to the now ambassador in Washington and say, ‘Hey old mate, are you going to be embarrassed if we now try to claim the GST for ourselves given that we were so opposed it?’ In fact, the Minister for Resources and Energy here at the table voted against it. Do you remember that vote?


Mr Martin Ferguson —I remember you and Work Choices.


Mr HOCKEY —He does remember that vote. I am so pleased he recalls that vote. I know there is some fading memory there. Of course, former ACTU presidents have selective memories, especially in this place. I would say, though, that he is not a bad guy, the old minister for resources, the old charmer. In the deep, dark recesses of his memory, he will recall that he voted against the GST. But, I would say this to him: give that part of your brain a little bit of oxygen, give it the opportunity to rebirth and remind yourself of the fact that you voted against the GST, and now you are voting for legislation that wants to claim it back.


The DEPUTY SPEAKER —Order! The member for North Sydney will address his remarks through the chair.


Mr HOCKEY —You are the same, Deputy Speaker. I remember those battles well.


The DEPUTY SPEAKER —The member for North Sydney will not engage the chair in debate.


Mr HOCKEY —I remember the battles with the member for Wills. The member for Wills was one of the strongest advocates for the Labor Party’s position and he was formidable in the debate.


The DEPUTY SPEAKER —The member for North Sydney will return to the bill.


Mr HOCKEY —I was on the receiving end of all of that at question time. The Labor Party would come into the House with packets of salad and Hockey Bear pyjamas. Remember the Hockey Bear pyjamas?


Mr Martin Ferguson —Yes.


Mr HOCKEY —That’s right. And they brought in bottles of Coca-Cola. They would say: ‘Look at the price. Look at these Hockey Bear pyjamas, they are going to go up 10 per cent. How much is a packet of salad going to cost after the introduction of the GST?’


Mr Martin Ferguson —With mayo and without mayo.


Mr HOCKEY —Yes, with mayo, without mayo, with salad dressing and so on. I do recall those moments. These dispatch boxes still exist but, sadly, the minister for resources—who obviously drifts in and out of the political Alzheimer’s club—fails to recall the strength of the advocacy of the Labor Party against the GST at that time. Now they are taking the GST off the states.

The reason we gave the GST to the states was that the states had growth areas of expenditure—granted, it is the case that health is an area of growth. Having worked in state government, one of the challenges for the states is that their revenue does not grow at the same speed as their necessary expenditure on health, education and so on. But, this is the point that Colin Barnett is making: if the federal government is going to provide assistance to the states in this area of significant growth—health expenditure—then the federal government should do it out of its own sources of revenue and not out of the revenue that is allocated to the states. I fully accept the concern of Western Australia in that regard, particularly given—whether it right or wrong—that Western Australia has a current concern about the Grants Commission formula.

Deputy Speaker, as someone who is familiar with this, you will appreciate that I have to move the following second reading amendment:

That all the words after “that” be omitted with a view to substituting the following words:

   “the House declines to give the bill a second reading until:

(a)   there has been laid on the table of the House a copy of an agreement reached between the Commonwealth and each of the states and territories about GST handback in relation to the measures in this bill;

(b)   each of the states and territories has signed that agreement; and

(c)   given that the state opposition parties in New South Wales and Victoria have signalled that they do not support the current agreement, the people of those states have voted in their upcoming state elections”.

This is a very important point. The government are asking us to vote on a bill that will be immediately undermined should there be a change of government in Victoria on Saturday or in New South Wales in late March next year. Therefore, now is the time to put in place a framework that ensures that not only does the government deliver on all the preconditions for this bill upfront but also the government does not go down the path of trying to legislate for something that will not be able to be delivered.

I make another key point. The GST was introduced to try and reduce the serious vertical fiscal imbalance in Australia by providing a large and growing revenue stream to the states. This is a very important point: the coalition are firmly of the view that governments should be responsible for raising the revenue that they choose to spend—this is a key principle. It is easy to spend other people’s money. It is hard to spend the money that requires political pain to raise it. That is why exacerbating vertical fiscal imbalance in Australia with this bill is a bad decision.

Even though the Commonwealth government collects the GST on behalf of the states, all the revenue goes to the states. Therefore, the states should be in the business of determining exactly where that money goes rather than having a fixed formula where only a part of the GST goes to the states. Most significantly, the states were the ones at the end of day that supported the GST through the Senate. I remember the impact on negotiations with the Democrats to get the GST through the Senate—as my colleague the member for Casey, who at that time was working for the Treasurer, will recall. It was significant for the Democrats to get their support that the revenue was going to the states.

Not all the states abolished all the taxes that were part of the GST deal. What a surprise that the New South Wales Labor government did not keep a deal! The only deals they keep are in relation to jobs for their own people, but they do not keep a deal between states. To be fair to old shoebox over the table, the minister for resources, he knows as I know that Kristina Keneally rejected the national approach to occupational health and safety and so there is a broken deal there. I think the minister for resources would be very keen for New South Wales to keep its commitments.


Mr Martin Ferguson —Have you run out of steam? You have morning tea on your mind.


Mr HOCKEY —No, I am just wondering. I am curious. I would say to the minister for resources: if you want to keep your deals then the key aspect of that for this bill is that the states continue to receive the revenue out of the GST rather than having it shanghaied by the federal government.

In conclusion, the opposition in both Victoria and New South Wales have expressed serious concerns about this agreement and there are still enormous uncertainties about the terms of this agreement. As well, this is a government that is more and more addicted to spending and looks all the time for new revenue-raising sources. Look no further than today. Yesterday the Assistant Treasurer said that he was going to investigate applying the GST to online purchases and then he scurried out onto ABC TV today and desperately tried to recover the situation by saying, ‘We’re not going to place a tax on online purchases.’ That is the way the government’s tax policy is framed. It cannot hold a policy on tax from midnight to dawn, let alone hold a policy on tax from budget time to election time, like the mining tax, or hold a policy on tax for six months in relation to carbon emissions.

This is a confused government. It does not know what it stands for and therefore is incapable of delivering policy that people believe in. So when it comes to this initiative on health, with a lack of detail in the bill and a lack of certainty in relation to tens of billions of dollars, the coalition will oppose this bill because it is bad policy and we would ask the parliament to support our second reading amendment, which defers any further consideration of the bill until such time as additional information is provided by the government.


The DEPUTY SPEAKER (Mr KJ Thomson)—Is the amendment seconded?


Mr Anthony Smith —I second the amendment and reserve my right to speak.