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Tuesday, 8 March 2005
Page: 95

Senator BARTLETT (7:06 PM) —First I would like to note the contribution of Senator Brandis, who is also from my state of Queensland, and agree that the Queensland government has certainly done far better than any other state or territory government in terms of profiting from the GST revenue. I note Senator Brandis’s description of the GST as a ‘huge success’ because it has brought in more money than expected. It is an interesting definition of success from a Liberal Party senator that a tax is successful because Australians are paying even more tax than we thought they would. From my point of view, as a member of a party that has never been shy about recognising the importance of ensuring that we have a sufficient amount of revenue to fund social services, perhaps that would not be so surprising. But a Liberal senator boasting about exactly how enormous the tax take now is is worth noting.

I should emphasise that in some ways we unfortunately still have echoes of the GST debate—Labor versus Liberal—playing out in the current debate about whether the states should be getting rid of more taxes or funding more services as opposed to the federal government funding them. People are taking up some of the same lines because of their position on the GST. Senators would probably be aware that I was one of the Democrats who voted against the GST, not because of the amount of revenue it might raise but because of concerns about it being raised in a less than equitable way. I think if you make those sorts of assessments you might come up with different criteria in determining whether or not it has been successful.

It is about time for us to have a good examination, five years down the track, of how that whole tax shake-up is operating and whether there are ways to make it fairer, stepping back from everybody’s individual views about whether or not it was a good idea in the first place. Obviously, the GST has happened and is now well entrenched, but I am disappointed that the Labor Party have stepped back from their position of a couple of elections ago—not that I necessarily supported everything about roll-back but the principle of continuing to look at improving the fairness of the way the tax operates is appropriate, particularly now that it has been in place for some five years now.

There is a good case to be made for state governments to consider removing some of those economically unproductive taxes—those that whilst they might raise revenue have a negative side effect as well—and to counterbalance, whether in terms of economic activity or social equity. Some of the taxes that are still in place are exceptionally regressive, as were some of those that were abolished. If we are talking about what is appropriate for tax reform, one issue is how much revenue a tax raises—not just what it is spent on but whether it is raised fairly. My concerns are on the record about the GST not being fair. My colleagues did a lot to try to make it fairer—by exempting food, for example. Let us not forget that some of the state taxes that are still in place are also incredibly regressive, not least the gambling tax. That is an area all state governments should focus on, not just because they now have GST revenue to replace it but because of the real problem of their being tied to that gambling tax revenue.

As with many cases where you have state and federal governments pointing fingers at each other and saying, ‘The other mob’s to blame’—whether it is expenditure on social services, regressive taxes or addressing issues like housing affordability—I think that both state and federal governments can do more. I get really tired of them spending more energy on pointing the finger at each other than on focusing on what they are capable of doing. We need an approach where there is less finger pointing, name-calling and shouting at each other across the divide and more getting together and looking at where we can go forward, five years down the track, regardless of whether you supported the GST or, like me, opposed it. We need to look at where we go from here, whether there are changes we could make at a federal level and what states can do in terms of changing their remaining taxes or what they spend their money on. Some of them are doing better than others. This report does not go into that so much but it is an ongoing debate that we do need to have. There is clearly still a problem with adequate expenditure on social services—in particular, in Queensland—but it is something the federal government should take a constructive approach on rather than just more of the finger pointing, political point scoring and posturing.

Question agreed to.