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Monday, 9 November 2015
Page: 7941

Goods and Services Tax


Senator KETTER (Queensland) (14:12): My question is to the Minister representing the Treasurer, Senator Cormann. Can the minister confirm that Treasury has modelled at least four options to increase the GST to 15 per cent and that these include fresh food, health and education? Minister, do all of these options assume that revenue from a GST increase will be fully offset by income tax cuts?


Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (14:12): What I can confirm is that the federal government is working in good faith with the state and territory governments about common challenges that we are considering and about ways we can improve our tax system so that we can strengthen growth and opportunity across Australia. It is true that, at the request of state and territory governments, including state and territory Labor governments, the government is currently in a discovery phase, going through a process of identifying options and possible scenarios. That is what you would expect any good government to do. Would you like us to make decisions without collecting all of the information in order to make an informed judgement? We know that that is what the Labor Party did in government. We know that that was your modus operandi under the Rudd and Gillard governments. But this government actually works cooperatively with the state and territory governments. We engage in good faith with the state and territory governments about opportunities for reform, opportunities to strengthen the economy and opportunities to create more jobs, and of course we are talking about—

The PRESIDENT: Pause the clock. Senator Moore, you have a point of order?

Senator Moore: Mr President, my point of order goes to direct relevance to the actual question. The second part of that question was clearly about whether the revenue from the GST increase will be fully offset by income tax cuts. The minister has ranged very widely in his answer but has not got to that particular question.

The PRESIDENT: Thank you, Senator Moore. I will remind the minister of the question. Minister.

Senator CORMANN: Thank you, Mr President. I was being directly relevant to the question. I confirmed that the Commonwealth is talking in good faith with the state and territory governments about options to improve our tax system. What I also can say very clearly is that the federal government has not made any decisions—there is no final landing point about any option moving forward. Currently, as the Treasurer has clearly indicated, the government is in a discovery phase. We are engaged in public consultation, and if I might just—

The PRESIDENT: Order! Pause the clock. Senator Moore on a point of order.

Senator Moore: Mr President, I rise on a point of order, again on direct relevance. Do any of the options discussed by the minister in his answer assume the revenue from the GST increase will be fully offset by income tax cuts?

The PRESIDENT: Senator Moore, the minister did indicate in the continuation of his answer that the government has made no final landing, and I believe that was directly relevant to the questions asked.

Senator CORMANN: Thank you very much, Mr President. I would just refer Senator Wong to the comments of South Australian Premier Jay Weatherill, who said:

We do need all of these things on the table. I think there is a sensible discussion about this. I will be encouraging all of my colleagues to talk about it.

We understand that you come in here to— (Time expired)










Senator KETTER (Queensland) (14:15): Mr President, I ask a supplementary question. Minister, I refer to reported comments by a Liberal who said that any increase to the GST 'will be red hot internally if it looks like a tax grab to fund hospitals or Gonski'. Will an increase to the GST fund schools and hospitals?


Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (14:16): If the charge by the honourable senator is that on this side we have an instinct in favour of lower, simpler, fairer taxes, then yes you are correct. If you want me to confirm the unremarkable proposition that this government is focusing on tax reform without increasing the overall tax burden in the economy, that we are focusing on tax reform that improves the—

Senator Kim Carr interjecting

Senator CORMANN: If you think that that is exciting, good luck to you. We are focusing on tax reform which will help us strengthen the economy. We are focused on tax reform that will help to grow the economy such that more jobs can be created in the economy and there will be a growth dividend for government along the way in the form of increased revenue on the back of stronger growth. That is the best possible increase in revenue for government: a revenue increase on the back of stronger growth.



Senator KETTER (Queensland) (14:17): Mr President, I have a final supplementary question. Minister, I refer to Senator Bernardi's comment that:

Tax reform means lowering taxes and every justification that I've seen for tax reform thus far entails an overall increase in government revenue. That's not reform, that is gauging.

Does this represent the government's position?


Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (14:17): Senator, it is always dangerous to take the supplementary questions from your tactics committee without having listened to the answer—and I can say to you that I answered that question in my answer to your first supplementary. I have already indicated that the government is focused on tax reform without increasing the overall tax burden. We are focused on tax reform which improves the tax mix. We are focused on tax reform which helps to encourage people to work more, save more and invest more, because it helps us strengthen the economy, which in turn will help create better opportunity for people to get ahead, which will help Australians lift their living standards and which will also of course deliver a growth dividend to government.