MPI - Goods and Services Tax

Wednesday, 02 December 2015

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (15:30): We are really going through the motions now, at this time of the year, with the shadow Treasurer coming in here again and again with the same tired old rhetoric about a GST plan which the government does not have and which the government has not announced. He is telling old golfing stories—he is now at the level of telling his golfing war stories of how good his handicap is. I am not sure that the constituents of McMahon or even Fowler, to name another electorate that the shadow Treasurer might be interested in, would be so interested in his golfing analogies. The constituents out in Western Sydney might prefer to hear about the NRL or they might want to a story about the Wanderers, but I am not sure the golfing analogy is going to go down all that well in Fowler. I am not sure that you want to go doorknocking to tell your golfing buddies how you do the mulligan. I would invite the whole Labor Party to come doorknocking with me to tell them what avid golfers they are. They have time to play golf. The rest of the country, of course, has to get on with the job of building growth and investment and providing the savings this country needs to run a stronger economy.

On a day when we see the national accounts showing that economic growth strengthened in the September quarter and that we are making a positive transition from the end of the mining boom into new areas of the economy—the broad based growth that we will need to function—it is ironic that the Labor Party is coming in here to sell their doom and gloom, their scare story or their 'not so scary scare campaign', as the Prime Minister says, against a goods and services tax.

It is ironic, too, when you consider Labor history. It does seem that the shadow Treasurer is stuck in 1998. Let's listen to some of the people who have supported GST—the attitudes of some Labor figures to the GST, Labor luminaries that people used to vote for. Let's start with the Leader of the Opposition, Bill Shorten, who said, 'Labor has always believed in broadening the base and trying to lower the tax rates.' He also said, 'This government doesn't have the courage to argue for a GST.' Or let's go to Geoff Gallop, a distinguished former leader, who said, 'I have been on the record for some time talking about the need to increase the GST. I think the time has come to take that step.' No-one in the government has made that assertion that it is time to lift the GST, but Geoff Gallop said that.

We could move on to John Brumby, another distinguished former premier, who said, 'If you look at all of the arguments and all of the facts, it is inevitable that we need to increase the GST.' That is not a member of the government's economic team or a minister in this government or a member of the backbench—that is John Brumby, former Premier of Victoria. We can go then to the Premier Jay Weatherill, the current Labor Premier of South Australia. We are going pretty well—we've been to Western Australia, Victoria and so now let's go to South Australian Labor. Jay Weatherill has said, 'We do need all of these things'—referring to a goods and services tax in, increasing the rate, increasing the base; that is the context of his remarks—'on the table.'

Would you think that the ACT Labor Party would be a little different on this? Would you think they would have a different view? On the question of raising the rate and of increasing the base of the goods and services tax, Chief Minister Andrew Barr said, 'We are open to the proposal.' We know that the shadow Assistant Treasurer, Dr Andrew Leigh—a member of your own shadow economics team— is certainly open to the proposal. Just read his books—I encourage the shadow Treasurer to get a copy. I have signed copy in my office in pride of place on my desk.

If that is not enough, we can go to former Labor premiers in New South Wales, the biggest state and the biggest part of this country's economy. We have the shadow Treasurer completely out of step with almost every Labor leader or former leader of the past decade. Former Premier Christina Keneally said, 'The GST is obviously part of the mix.' Then let's go back to Victoria, where Labor Premier Daniel Andrews has said: 'We would not support any changes to the GST but in the event that a federal government were elected on a platform and had a mandate to do it—well that is a different issue.'

The shadow Treasurer is stuck back in 1998 and he seems to continue to litigate an argument not against an increase in the rate or against an extension of the base of the GST now—he is arguing against the original goods and services tax every time he makes an argument in this House. This week he asked a series of inspired questions about what happened to growth in Australia, following the introduction of the original goods and services tax—as if the goods and services tax is bad for the economy in general. He was saying that there was a six-month period where growth suffered, but then he conveniently neglected to examine the next decade, where we removed dozens and dozens of taxes, including the wholesale sales tax and many other inefficient taxes that were holding our economy back. You do not just look at the next quarter or the quarter after that to say what happened after the goods and services tax. Have a look at the next decade, have a look at the efficiency that was created in the economy with those consummate income tax cuts and the entire package that was presented to the Australian people.

The shadow Treasurer has mounted the most bizarre argument in Australian economic history, that we should somehow replace the goods and services tax because we had some negative growth following its original introduction. That is the argument he has mounted. He is not arguing against a contemporary increase in the GST, he is mounting no case against that—he is saying look at the original GST. He is saying the original GST was a bad idea. How would you replace the revenue that is raised from the GST that goes to the states, shadow Treasurer? This is the question you need to answer. You cannot continue to stand there at the dispatch box day in, day out, month in, month out, every question time, asking absurd questions—it is like it is from the school of absurdism—and litigating an argument against a goods and services tax; not just some increase, not just an extension of the base, but arguing against the original goods and services tax. The original goods and services tax is what you have been arguing against in question time this week. You have to answer a question: what would you do differently in government?

Mr Sukkar: Roll it back.

Mr HAWKE: Would you roll back the GST? My colleagues quite rightly refer to rollback. Where have we heard rollback before? We have heard rollback before. You did have a plan to roll it back but then you had six years in office when, if you wanted to roll back the GST, you could have taken that action. You could have continued to litigate this argument. But the argument against the GST vanished as soon as you secured office in 2007. From 2007 to 2013 the Labor government made no argument against the GST. In fact, there was action taken on the GST that we know about—just like Paul Keating's option C, the then Treasurer had three scenarios modelled on increasing the rate and expanding the base of the GST. We still do not know what is in those scenarios. The Australian public do not know what was in the modelling or the directions that the then Treasurer gave for the modelling, for the extension of the rate and the increase of the base. What were they? We have part of scenario three, which was increasing the GST rate to 12.5 per cent and broadening the base. It is the estimated weekly price impact on households in 2014-15. This is actual Labor Party modelling that was done at the direction of the former Treasurer, who is now the shadow Treasurer. He says that we are modelling something, but he is the only one who has received modelling.

Mr Bowen: You've got a copy of it.

Mr HAWKE: We have a copy of it. There is no other modelling. But we do not know what was in scenario two and we do not know what was in scenario one. Tell us—you are here now. You have just spoken on a matter of public importance on the GST so why did you not tell us what was in scenario two or scenario one? Was scenario one extending the GST to health and education? Was scenario two extending the base of the GST to fresh food? Was scenario two an increase in the rate to 15 per cent, or was it 20 per cent? We know scenario three was an increase in the GST rate to 12.5 per cent. It is this government that is getting on with national growth and that has a plan for economic growth and jobs, and the national accounts figures today bear that out. We are going to continue to pursue that plan.