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GST distribution: Too late for WA and no guarantee of future services



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CHRIS BOWEN MP SHADOW TREASURER SHADOW MINISTER FOR SMALL BUSINESS MEMBER FOR MCMAHON

GST DISTRIBUTION: TOO LATE FOR WA AND NO GUARANTEE OF FUTURE SERVICES

Today’s announcement by the Government regarding changes to the GST comes 12 months too late for Western Australia, and relies on a desperate “trust us” commitment from a government that has cut billions in funding for schools and hospitals.

After a year of inaction and failing to deliver for Western Australians, the Government has now effectively come on board to Labor’s approach of locking in a 70per cent floor that would deliver more funding for WA.

If Labor was in government, our Western Australia fair share fund would have been legislated with the money already flowing, instead of waiting more than 12 months for a Productivity Commission report that the government has simply ignored.

When it comes to the broader GST distribution model, the Turnbull Government is now essentially telling people to accept cuts to their GST payments now and that it can be trusted to deliver ongoing top up payments into the future.

The irony today is that Scott Morrison said “top ups forever is a mug’s game”, yet his proposal today to grow the GST pool relies on top ups forever from the Commonwealth.

The model proposed today is moving from a GST pool towards a GST plus “trust Scott Morrison” pool.

The Government’s proposed model relies on $7.2 billion in additional top up payments over the next decade.

This comes on the back of the Government’s expensive and unfair $144 billion in income tax cuts on the never never and giving $17 billion to the banks.

Where is the money coming from?

When it comes to the Budget, Scott Morrison isn’t Santa Claus, he’s the lead character in the Magic Pudding.

The States and Territories are entitled to be concerned that this approach by the Government could lock in future cuts to schools and hospitals.

The GSTtop ups to smaller states are as permanent as schools and hospital funding agreements - which the Government has cut time and time again.

As the Productivity Commission warned today in its report, models that rely on ongoing top up funding arrangements will “always be subject to the vagaries of the Commonwealth Budget”.

No one trusts Turnbull or the Liberals on the GST. Every time they’ve touched the GST, they’ve tried to increase taxes on people, or cut payments to states.

Labor will carefully consider the Productivity Commission’s report and the Government’s proposal as the devil will be in the detail.

THURSDAY, 5 JULY 2018

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