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Lennon Government squanders GST windfall: services suffer.

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Lennon Government Squanders GST Windfall - Services Suffer

Wednesday, 15 February 2006

The Lennon Government is squandering buckets of GST revenue at the expense of health and education services, according to the Productivity Commission and latest GST data, Senator Guy Barnett said today.

“This is either a case of gross mismanagement of taxpayer ’s money or the State Government is saving the money for an election war chest. Either way it is a reprehensible contempt for Tasmanians,” Senator Barnett said on behalf of the Federal Liberal Team in Tasmania.

“Why is it that the Productivity Commission has assessed Tasmania as a poor provider of key public services, and yet the State Government receives more federal funding on an equal population share than other States?” Senator Barnett asked.

“I note that Premier Paul Lennon has lamented the recent loss of about $20 million in anticipated GST revenue due to a brief downturn in household expenditure, but the period assessed by the Productivity Commission was 2003 to 2005 when the State actually received GST windfalls totalling more than $180 million, and unaffected by any downturn. Windfalls are the extra amount the State receives over what it would have received had the GST never been introduced.

“A $20 million dip due to economic factors is miniscule compared to the windfalls of GST revenue the State receives,” Senator Barnett said.

He said that between 2005-06 and 2008-09 the State will receive a net $289 million in windfalls after a range of State taxes have been abolished as required by the Howard Government.

The GST windfall over this period is equivalent to acquiring one of the Spirit of Tasmania ferries, two new high schools, 100 new ambulances, three new district hospitals and 200 new housing division homes.

The total windfall over the next four years is more than $600 million but the Australian Government forced all States to cut a host of State taxes in line with the 1999 GST inter-governmental agreement.

The tax cuts include financial institutions duty, bank accounts debits tax; stamp duty on non-quotable marketable securities; stamp duty on leases; stamp duty on mortgages, bonds, debentures and other loan securities; stamp duty on credit arrangements, instalment purchase arrangements and rental arrangements; stamp duty on cheques, bills of exchange and promissory notes; and, stamp duty on business conveyances other than real property.

“How is that despite all this GST windfall the Productivity Commission report showed Tasmania ’s expenditure per person on public hospitals is one of the lowest in the nation, and well below the national average; Tasmania has fewer public hospital beds per 1000 people than most other states, and the figure is also well below the national average, and, Tasmania has fewer full time equivalent nurses per 1000 people than any other State or Territory?” Senator Barnett said.

“How is it that Tasmania has too few ambulances on the road at any given time; poor response times, in fact the worst in Australia and poor or non-existent training, accreditation and skill updates?

“And why has Tasmania the second lowest expenditure per full time student in public schools in the nation?

“Why is this so when Tasmania receives $1.55 in GST revenue on an equal population basis than any other State, and compared to NSW which receives only 86 cents in the dollar and Queensland $1.05, and yet with such favourable treatment the Tasmania Government seems incapable of matching the effort of other States,” Senator Barnett said.

“And finally, would Mr Lennon stop embarrassing his fellow Tasmanians by saying his Government is wholly responsible for the buoyant Tasmanian economy.

“These comments make us a national laughing stock. The $3 billion Tasmanian Budget has a tiny impact on the reason why Tasmanians enjoy higher wages, low inflation, low unemployment and low interest rates - not to mention the fact that 63% of the Tasmanian Budget is federally funded,” Senator Barnett said

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