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Monday, 9 November 2015
Page: 7944

Goods and Services Tax


Senator DI NATALE (VictoriaLeader of the Australian Greens) (14:23): My question is to the finance minister. For years members of this government went to supermarkets, pie factories and trucking companies demonstrating that the price on pollution was a great big new tax on everything and that it would dramatically increase the cost of living for ordinary householders. We saw some modelling from the Parliamentary Library that, interestingly, said that an increase of 2½ per cent in the GST or indeed abolition of the exemptions that currently exist on the GST would cost three times more for householders than a price on pollution at $28 a tonne. Will the government confirm this modelling? And will the government confirm that what it plans to do is to genuinely impose a great big new tax on everything?


Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (14:24): This is typical Greens voodoo economics. We have a tax that will raise the same or more but will cost less. The Labor-Greens carbon tax was not just a tax on people's electricity bills; it was a tax on the economy and jobs. It made Australian businesses less competitive internationally by shifting jobs and emissions overseas. You might think that costing people their job is not a problem, but the coalition actually thinks it is. We happen to think that stronger growth, more jobs and more opportunity for people to get ahead are good things. The carbon tax was a tax on everything in the economy. You call it a tax on polluters, but it was actually a tax on employers. It was a tax on businesses that employ Australians. It was a tax on those businesses that keep our lights on, including the lights in this chamber. It was a tax that was not only hurting families, pensioners and small businesses but hurting the economy as a whole. It was costing jobs. It was, over time, according to Labor's own modelling, going to lead to pay cuts and fewer jobs that were less well paid, all the while helping businesses in other parts of the world that were polluting more, for want of a better word—putting more emissions into the atmosphere for the same amount of economic output—to take market share away from us, helping them to take jobs away from Australia. So, there was no environmental benefit but all economic costs—costs for families, pensioners, small businesses and the economy as a whole.


Senator DI NATALE (VictoriaLeader of the Australian Greens) (14:26): Mr President, I ask a supplementary question. I refer to comments made by the Treasurer where he said that he planned to introduce a system of income taxes alongside the GST because he did not favour increasing the overall tax take. Can the finance minister explain why shifting the tax burden onto people on low and middle incomes is simply tax shifting rather than tax reform?


Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (14:26): I do not agree with the conclusion that Senator Di Natale came to. There is no intention of shifting the tax burden to low and middle income earners. The intention is to improve our tax system. In Australia we have too heavy a reliance on personal income tax. We have been on the public record in relation to that. Too many middle-income Australians are getting into the higher income tax brackets. We have been on the public record with that. There is a need to ensure that our tax system today helps us to improve our productivity and helps us to improve our competitiveness and that over time we are able to strengthen economic growth. The way to do that is by incentivising people to work more, save more and invest more, and obviously personal income tax rates are a part of that conversation. Now, you are jumping to a series of conclusions, making a series of assumptions, in relation to decisions that have not actually been made. (Time expired)


Senator DI NATALE (VictoriaLeader of the Australian Greens) (14:27): Mr President, I ask a further supplementary question. I refer to legal advice provided by Bret Walker SC, who said that the intergovernmental agreement requiring that all states agree to any GST changes is not binding against this parliament. Will the government pledge not to change the GST unless every state and territory agrees? And will it rule out using its unilateral power to push ahead with changes regardless?


Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (14:28): Senator Di Natale is getting way ahead of himself. The government is involved in good-faith discussions with the states and territories on how we can improve our tax system. We are in the early stages of a tax reform discussion. Obviously the next step will be the release of a green paper with a draft set of proposals on which there will be further consultation. The approach the government intends to take in relation to how we want to improve the tax system will be released, openly and transparently, in the form of a white paper before the next election, and at the next election the Australian people will have the opportunity to pass judgment on what the government is putting forward as our proposal to improve our tax system as part of our plan for stronger growth and more jobs.