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Monday, 9 November 2015
Page: 7976


Senator LINDGREN (Queensland) (16:09): I rise to speak on this matter of public importance on the goods and services tax. We need a taxation system that allows the government to build a strong economic plan that supports a national platform for economic growth and jobs that backs Australians who are out there every day making their way in the world, working hard, saving for their future and investing in their capabilities and opportunities—backing Australia and Australians to earn more. Currently there is no proposal for an increase to the GST; however, there has been talk amongst the state governments and former Labor premiers and individual members of parliament. The government has no proposal or policy to change the goods and services tax. As South Australian Premier Jay Weatherill says, talk of increasing the GST needs to be part of an open and honest wider discussion between the states and the federal government on taxation. Mr Weatherill went on to say the prospect of GST changes presented a chance for sensible discussion on how future costs of health care could be met. Former New South Wales Premier Kristina Keneally, Queensland's Peter Beattie and Western Australia's Geoff Gallop—all Labor premiers—have outlined the conditions under which the tax change could be implemented as part of a reform package.

I think it is ideal that we can actually have a discussion about not only the GST but also tax reform in general, and that is what this government is prepared to do. The Prime Minister, the Treasurer and the Minister for Finance have all openly stated that we will pursue all discussions on tax reform, because this country needs to address the taxation system for all. I have heard for over three weeks now the Treasurer openly commenting on this on all forms of media. The Treasurer and this government are about encouraging people to work hard, to make money, to save and to enjoy their lives in Australia. We are considering all options in looking for the best possible tax system.

The Turnbull government is committed to tax reform; looking for lower, simpler and fairer taxes for all Australians whilst focusing on tax reform that increases revenue for the government. It also needs to ensure that it reduces red tape and supports small businesses, as well as pursuing an ambitious innovation package. Income tax has become a silent tax for many Australians, particularly young Australians. As a proportion of total tax revenue, personal income tax in Australia is the second highest amongst OECD countries. This means that next year the average wage earner will be taxed up to 37c in the dollar on what they earn. If there were no tax cuts for 10 years, nearly half of all taxpayers would be in the top two tax brackets—an increase from around 27 per cent today to about 43 per cent in 10 years. They do not need to be paying the second highest bracket of tax on their weekly earnings, so what is the answer? The answer is simple—let us have a mature discussion about tax and see what can be done. Let us look at each and every aspect of our tax system and see what is working and what is not.

Critical to this government is a better tax system, with a better mix and a better combination of taxes at state and federal levels that helps us to grow our economy. This process includes engaging and working collaboratively in good faith with state and territory governments to examine how we can improve our tax system to better support jobs and growth. Economic leadership is what this government is about and it is economic leadership that is needed to grow jobs and the economy: engaging in processes where we are talking to the states and territories as well as other stakeholders; communicating with the Australian people not just about the challenges that they are facing in our tax system but about how services are delivered right across the economy.

So there has been discussion about personal income tax but there has been discussion about other areas of tax as well, and our next meeting with state and territory treasurers may focus on state and territory taxes and charges. That is what was agreed at the last meeting and the Commonwealth Treasury has been doing work with the state treasuries around a broad array of state taxes and charges. They are collecting almost $85 billion in annual taxes and charges, and they can discuss how a better mix of taxes, freeing people to work, save and invest, could be created. Let us not forget that the states on balance, as was reported in The Australian today, are broadly in surplus. This will be an important part of an ongoing discussion. However, economic leadership is not about rushing into any decision. Good economic leadership is about communication, listening to those around us and being collaborative with people, understanding the problem and ensuring that we can solve it so Australians are much better off.

These discussions also include competition policy reform, because the Australian people will expect that any changes in the tax system should result in better services, more choices and better spending. We are having a conversation about how we grow the economy and how we grow jobs. There are many elements to this. The tax system is one of the things that can hold Australians back. Prime Minister Turnbull is right: we need a tax system that is the 'minimum handbrake on economic activity'.

It is important to note that to control expenditure there is the need to address budget issues, and then you can grow the economy to grow revenues. Australia's problem, at the moment, is that we are not earning enough, and that is why the trade agreements are so important. That is why ensuring that people can realise their full potential in their businesses or as employees is just as important. That is what productivity is about. It allows you to grow real jobs, lifting revenue. You do not lift revenue by just taxing people more. That is why our objective on this is very clear: we do not want to increase tax burdens on Australians. We want to grow the economy and to grow jobs. That is the only reason we are engaging in this discussion. It is a good discussion. I think it is a positive discussion and it is a task that the economic leadership really needs to engage in, positively and collaboratively, to try to draw together where there is a meeting of minds and a consensus on key issues.

Let me summarise why it is important to have a discussion on GST. We need the right tax system to generate growth and people want a tax system that will bring them together rather than hold them back. The purpose of any taxation system is to improve jobs, hospitals and education, and that is what this package does.