Prime Minister Tony Abbott says its up to the states whether they change the rate of the GST as part of the federation and taxation reviews.
Prime Minister Tony Abbott says the GST will be looked at as part of the government’s federation and taxation reviews but it is up to the states whether there is change.
Mr Abbott has laid out a timetable for the reviews which will result in recommendations being released in the run up to the 2016 federal election.
There will be a need to look at both spending responsibilities and revenue capacity as part of a mature debate about the future of the federation, he told parliament on Monday
“My hope is that just for once it might be possible to have a debate rather than a screaming match,” he told parliament.
Shadow assistant treasurer Andrew Leigh accused the prime minister of using “code language” rather than being up-front about his GST plans.
“What Tony Abbott wants to do ought to cause the hairs on the back of Australians’ necks to stand up,” he told reporters in Canberra.
Labor South Australian Premier Jay Weatherill said if the prime minister wanted co-operation on tax reform, he should restore the $80 billion of health and education state funding that was ripped out in the May budget.
“I would have thought a starting principle of federation is that governments … keep their agreements each to the other,” he told ABC radio.
Liberal Victorian Premier Denis Napthine, who faces a state election next month, does not support lifting or broadening the base of the GST, only a fair share of GST revenue.
He wants the same as NSW, around 96-97 cents in the dollar, rather than the 88 cents the state now gets.
“Show us the money on the current GST distributions before we even think about talking about other tax matters,” he said.
But former NSW premier Nick Greiner said the argument about how much tax you raise and who raises it obviously depends on what you want to spend it on.
“Start with federalism and then go to tax, rather than starting with tax without knowing what you want to fund,” he told ABC radio.
A new Committee for Economic Development of Australia report into federalism makes a series of recommendations, including the creation of a Federation Reform Council to monitor and evaluate the effectiveness of reforms and to make sure there are no unintended consequences.
Chief executive Stephen Martin said Australia’s federation has largely worked well, delivering political stability and economic prosperity for more than a century.
“(But) it can do better,” Prof Martin says.
Mr Greiner, a contributor to the CEDA report, was more critical, describing the current state of federalism as “dysfunctional” with everyone doing everything.
“The public doesn’t know where to look and the politicians blame each other,” he said.