NSW Opposition Leader Luke Foley says, “Rather than accepting an increase to the GST, the states should agree on some national uniformity around state taxes – to eliminate competition that decreases revenue for all states”.
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Prime Minister Tony Abbott has applauded Mr Baird’s proposal, calling the suggestion “very sensible”.
State and territory governments are looking for potential solutions to their fiscal challenges, which were exacerbated by the Coalition’s decision in the 2014 budget to cut $80bn from projected health and education funding by 2024-25.
Mike Baird’s bold intervention to overcome a political deadlock over the GST may not get past this week’s leaders retreat.
I’m pleased that Premier Mike Baird, along with Premier Jay Wetherill, are prepared to have a constructive, responsible discussion.
The GST proposal is set to face resistance from numerous other states and from the federal Labor party.
“There’s a lack of leadership from our Premier on this issue”.
Victoria Premier Daniel Andrews rarely sees eye to eye with Tony Abbott, and the GST rise is no exception.
Treasurer Peter Gutwein is expected to confirm the Government’s opposition to any changes today.
The mood as the leaders entered the retreat this morning seemed positive, with Queensland Premier Annastacia Palaszczuk saying the meeting was an example of “coooperative federalism”, and Western Australia’s Colin Barnett declaring “the mood is good”.
“I think that is necessary for a whole range of reasons”, he said after the Australian Council of Government meeting on Thursday.
“This is the single biggest issue that confronts us as state and commonwealth leaders”, Mr Baird writes.
Its aim, according to officials, was to identify ways to reduce duplication, ensure government service delivery is more efficient and effective, and provide greater accountability to the community.
“We have a chance to take this nation forward this week”. Waving around numbers about the thousands of dollars in impact on the poorest people in society is facile, and any politician who starts reciting it should be called out for the scaremongering that it is.
He said compensating low income-earners was “just putting lipstick on a pig”. Compensation in welfare payments and tax breaks to lower income earners would cost $171 billion.
Abbott said he wanted to see “the overall tax burden go down” while at the same time having “a more rational arrangement of finances and responsibilities between the commonwealth and the states”.
I’m not against the GST rising as such whether it’s to 12.5% or 15%.
Increasing the GST from 10 to 15 per cent, he argues, will help overcome this.
But when The Australia Institute asked the Chartered Accountants for the modelling details behind these figures, or the report, we were told that there was none. He knows that the main thing he’s using to allow him to project slowly declining budget deficits in coming years is ever-rising collections of income tax, caused mainly by “bracket creep” – inflation pushing people into higher tax brackets.
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“Cheap credit will be around for a while longer yet”, he said. “I’m not going to give his thought bubble on the weekend more credence than it deserves”.
