Commonwealth Grants Commission Goods and Services Tax Allocations
Mr MATT BROWN (Kiama—Parliamentary Secretary) [4.02 p.m.]: I move:
That this House:
congratulates Premier Morris Iemma on his unrelenting fight to end the great GST rip-off.
supports the comments of Reserve Bank Governor Ian Macfarlane that New South Wales gets a raw deal under the present funding arrangements.
condemns the Federal Treasurer for his politically motivated refusal to make more funds available for the people of New South Wales.
(4) urges the Leader of the Opposition to show some backbone and put the interests of the people of New South Wales before those of his mates in Canberra.
New South Wales taxpayers are being ripped off when it comes to the GST. Each year, including during the past financial year 2005-06, New South Wales' taxpayers contribute $13 billion to Federal coffers, but only $10 billion comes back from Canberra for New South Wales to spend on the provision of services that are required by New South Wales' taxpayers. That means that New South Wales' taxpayers lose $3 billion in GST revenue each and every year.
Since his election as Premier, Morris Iemma has made his position clear: New South Wales' taxpayers deserve a better deal from the Commonwealth Government. Anyone who examines the basic figures I have mentioned would realise that New South Wales is getting ripped off and it deserves a better deal. The New South Wales Premier has raised this issue in Parliament six times—most recently this afternoon during question time—highlighting his personal commitment to the fight to ending the great GST rip-off.
All members of this Government stand united with the Premier in his unrelenting fight for families across New South Wales, including the taxpayers represented in this place by members opposite. I often receive representations not only from constituents of my own electorate but also from constituents of electorates south of Kiama who ask for government financial assistance in the provision of services. All the latter constituents ever hear is criticism about the insufficiency of services, but not once have they heard their local members of Parliament join in the fight and say to their Federal Coalition colleagues, "Why do you not give New South Wales its fair share so that more money can flow through to electorates throughout New South Wales."
Unlike the Leader of the Opposition, who panders to any special interest group that taps on his door and makes whacky commitments, such as the creation of a new bureaucracy—a defence industry unit, which would duplicate the work done by the Department of State and Regional Development, the Premier, Morris Iemma, is committed to clawing back $3 billion that New South Wales loses every year in the great GST rip-off. If this issue was not so serious, the Opposition's weasel words on the subject would raise a laugh, but nobody is laughing.
Blind Freddy can see the disgraceful scam being perpetuated by the Commonwealth Government. New South Wales' taxpayers are fed up, and their outrage is backed by independent figures from people such as the Governor of the Reserve Bank, Mr Ian Macfarlane. On Friday 17 February Mr Macfarlane told the House of Representatives Standing Committee on Economics, Finance and Public Administration:
... certainly, at the moment, there does not seem to be a logical case for taking the taxpayers' money from New South Wales and Victoria and redistributing some of it to Western Australia and Queensland.
The Governor of the Reserve Bank of Australia is saying that it is illogical. He cannot understand why it is happening. The Iemma Government will continue to offer its support for the smaller States and Territories such as Tasmania, South Australia and the Northern Territory and understands that we have a legitimate role in the Federation of supporting our smaller States, but that should not be the case in relation to Queensland and Western Australia, which are two big States with their current huge mining resources booms. Royalties are flowing into those States' coffers as they never have previously.
It makes no sense that about $636 million of this $3 billion of New South Wales taxpayers' money goes straight over the border to Queensland. Each year New South Wales taxpayers raise more than $636 million, but that goes straight to Queensland. That is an annual "Sunshine State" subsidy of approximately $93 from every man, woman and child in New South Wales, or $242 from each New South Wales household. That money goes straight to Queensland. This comes at a time when Queensland is experiencing a 47 per cent increase in mining royalties because of the resources boom that has been driven by the expanding economies of China and India in particular, which simply cannot get enough iron ore, coal and other mining industry resources. Approximately $232 million crosses the Nullarbor to Western Australia, which equates to $34 per person in New South Wales.
It is clear that the current Commonwealth-State funding arrangements are biased against the people of New South Wales. The GST package was supposed to provide the States with a better deal than the old system, which is what the propaganda associated with the GST led us to believe. When the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations [IGA] was signed in 1999 one of its objectives was to provide "an improvement in the financial position of all State and Territory Governments ... relative to that which would have existed had the current arrangements continued." But that has not happened. I sometimes hear conservative Coalition members say that more money is coming in from the GST than under the former arrangements, and that is true. There is more money, but it is not a relative improvement, which is the purport of the signed agreement.
New South Wales has been short-changed. New South Wales has received fewer GST gains than any other State. The Federal Treasurer, Peter Costello, says the States have received more from the GST than was promised, but since the introduction of the tax New South Wales has received just $209 million in GST gains compared to $4.1 billion for the other States. New South Wales receives an additional $209 million whereas the other States receive an additional $4.1 billion. How can that be shown to be fair? That equates to just $31 per person in net GST gains in New South Wales compared to an average of $297 per person for the remainder of the country. People who live in other States receive nearly 10 times the redisbursed revenue that New South Wales taxpayers receive.
Since the introduction of the GST, New South Wales has lost a total of approximately $800 million per year due to Commonwealth Grants Commission changes. This means that New South Wales is now receiving significantly less in GST funds than was expected when the agreement was signed in 1999. For example, in the 2004-05 financial year, New South Wales received $403 million less in GST grants than was initially expected.
For 2005-06 this shortfall is currently estimated at $631 million. All other States have received more in funding from the introduction of the GST than was originally estimated. New South Wales is the only State to suffer a shortfall in funding. That shortfall in our funding has resulted in the New South Wales slice of the GST moving by only 6 per cent between 2000-01 and 2005-06, or 1.5 per cent per year, which is significantly less than the rate of inflation. Every other State has experienced growth in its GST payments of about 26 per cent over that period. That is an annual growth of around 6 per cent per year, well ahead of inflation. In real terms per person, the New South Wales GST grants have fallen by about 7 per cent from 2001-02 until now. That is while the other States have experienced a per person increase in GST funds of about 7 per cent in real terms. That has imposed significant pressures on resources in New South Wales.
New South Wales funding had also been significantly cut by the operations of the Grants Commission. The current arrangements are inadequate, arcane and an insult to the intelligence, as can be seen if one looks at some of the reasons why New South Wales loses money. The commission has said that New South Wales has almost 16,000 too many bus stops—reduced our funding. We have 38 kilometres too much rail track—reduce funding to New South Wales. We spend $345 million too much on roads—we should cut funding. We spend too much on housing, vocational training and, worst of all, we spend $112 million too much on family and child services. Because New South Wales has a social conscience, its funding has been cut by the Commonwealth. That is a disgrace. The methodology clearly needs reform.
The dysfunctional GST carve-up literally gives New South Wales money, in the form of a continuing cross-subsidy, to the resource-rich States of Queensland and Western Australia. I ask Opposition members who are present today to take a stand and vote with the Government, and for their constituencies, to put whatever pressure we can on Peter Costello, who has the final sign-off on this deal, as is clearly spelt out in legislation. We want to make sure that Peter Costello knows that New South Wales is united, that we care about this State, and we will not pander to his power base in Victoria. Today our job is not to worry about what Peter Costello will do to Victoria. We are fighting for the right of the people of this State to a decent share of GST revenue. I expect Opposition members to stand, on behalf of their constituents, with the Premier and the Government members of this House. I appeal to the Leader of the Opposition to pick up the phone and put an end to this scam. We need a better and fairer system, and we need it urgently.
Ms PETA SEATON (Southern Highlands) [4.12 p.m.]: The honourable member for Kiama has either not been listening or is terribly confused. In September last year the Leader of the Opposition clearly said that Queenslanders are bludgers because they have had the benefit of the New South Wales GST distribution that they do not need, and that if Premier Iemma were serious about this, he and the Leader of the Opposition would get on a plane together and go to Queensland to confront Peter Beattie. The Opposition has said this again and again, but still the honourable member for Kiama persists with this nonsense. The real problem is that Labor simply will not stop spending, will not reign in on its waste and duplication, and will not cut taxes in such a way as to promote employment opportunities and employment confidence in small business.
If the Government wants any evidence of that, it need only look at today's release by Sensis of the small business confidence index, which shows that nearly 50 per cent of all small businesses surveyed said that they have no confidence in the policies of the Iemma Government. The index showed that they most dislike the large number of bureaucrats in New South Wales, red tape, and the high taxes and charges levied by the State. The Labor Government should not have needed the Stokes and Vertigan audit to tell it exactly what was wrong. For years the Opposition has been telling the Government what was wrong with its budget and its budget management. We have had to wait for five months to get an audit from Stokes and Vertigan to tell the Government what everyone else has known for years: it cannot continue to spend at a rate greater than the revenue it receives.
It is interesting that the honourable member for Kiama moved this motion today, because clearly he is very nervous. Again we hear the great Labor blame game yet again. It tries to blame anyone but itself for the situation it is in. One only need listen to the Government's response to the Stokes and Vertigan audit to realise that it is blaming everyone else. It is blaming the Reserve Bank of Australia, the climate, the drought, terrorists and the outbreak of the severe acute respiratory syndrome. It makes no mention of State taxes in the list of blame. New South Wales undoubtedly gets a raw deal, and Queensland is undoubtedly big enough and ugly enough to stand on its own feet. There is no argument whatsoever from the Opposition on that point. The real problem is that Premier Iemma does not have the guts to stand up to and confront Peter Beattie. The Opposition has never had a different view about that.
The honourable member for Kiama should focus on why New South Wales is in the present dreadful situation of having the highest level of mainland unemployment in Australia. New South Wales is meant to be the powerhouse of the national economy, but it has an unemployment rate of 5.7 per cent. That rate has increased consistently over recent months, particularly since the Premier was installed in the State's top job. It has increased almost every month since he became Premier, from 4.8 per cent a little over six or seven months ago to 5.7 per cent. That is the highest unemployment rate of any mainland State.
In the last quarter of 2005 New South Wales economic growth contracted. I would be interested to hear what the Government has to say about what it expects to see in tomorrow's economic growth results. New South Wales has the lowest population growth. That is because those who arrive in New South Wales look around and decide that our taxes are too high. They realise they cannot afford a home in Premier Iemma's New South Wales, so they move their families and their businesses to Queensland or Victoria—and increasingly it is to Queensland. New South Wales has amongst the lowest dwelling approval and investment statistics in the entire country. That is because State taxes, including land and payroll tax, are absolutely prohibitive. Whilst the Government is good at announcing that it will release large areas of land in south-west and north-west Sydney, developers cannot afford to buy that land and invest in it because they know they will not make a profit.
New South Wales has an unaffordability crisis for homebuyers, the highest average mortgage being about $258,000. But the Iemma Government does not care because it gets extra mortgage duty from the higher mortgages. That is part of the hidden taxes, the so-called hidden GST taxes, which we should not have kept. When former Premier Bob Carr signed the GST deal he knew exactly what the formula was. At that time Premier Carr was not prepared to stand up to Queensland, and Premier Iemma does not have the guts to do what he should do, that is, take on Peter Beattie. One only has to look at the December half-yearly review, which was issued just before Christmas in the hope that no one would notice it, to learn of the dire straits that New South Wales is in. New South Wales is heading for a $522 million deficit in 2006-07. There are also admissions in the half-yearly budget review that not only is the Government not going to be able to achieve its targets to reduce net debt and reduce unfunded liabilities, but that the Government's claim of success in reducing net debt over many years is also starting to go backwards.
According to the half-yearly budget review, net debt has blown out by $182 million. Unfunded liabilities will not decrease; they will increase by about $1.2 billion. That is the hidden story of the half-yearly budget review that the Government does not want us to know about. The Government expects to get a pat on the back for its announcement last week of about $90 million over four years in payroll tax relief. One only has to look at the windfall revenues that the Government has received from payroll tax in 2004-05—$188 million—to realise that $90 million over four years will barely touch the sides. It is an insult for the Government to tell businesses that it should be congratulated on its latest initiative when it does not go anywhere near returning the windfall revenue it has received from payroll tax, let alone the more than $5 billion in revenue it receives from that tax every year.
It is the same story in land tax. Last year the Government received windfall revenue of $125 million, but in the meantime valuations have skyrocketed, and there is no cap. That means that more and more people will cross the land tax threshold and more and more people will pay higher council rates and land tax for the first time. The Premier expects to be patted on the back for announcing that he will give back $53 million through land tax threshold changes. However, that is only a drop in the bucket when one learns how much windfall revenue the Government has received from land tax and how many more millions it is set to obtain from the latest round of valuation increases.
Only this week in a paddock in Riverstone the Federal Liberal member for Greenway, Louise Markus, and I held a meeting with about 50 or 60 local landowners. They are all ropeable about the Iemma Government because of the valuation hike rip-offs to which they have been subjected. They said they cannot afford to pay the resulting increase in council rates and that some of them would have to consider selling their homes, their investments for their families, to pay the Premier's land tax bill. The honourable member for Kiama had the hide to try to blame others for the woes of this State. What we heard today from the Premier in relation to tax is an absolute crock. He claimed that he is cutting taxes but we have only to look at his record in creating taxes to realise what nonsense that is.
In the past few months the Premier has increased taxation by about $700 million. He has increased the stamp duty rate on insurance products from 5 per cent to 9 per cent, costing each family an additional $50, and each business an additional $100. He increased the waste and environment levy and extended payroll tax by implementing a range of new measures that were never before dutiable. There have been new mining charges to pay for government regulation, and there have also been extensions to land tax so that land transactions and ownership are now taxable. There have also been new measures on mortgage duty. The Premier increased 11 charges ahead of time, including Sydney Water charges, Heritage Office fees, Hunter Water charges and Department of Lands fees.
The Premier also forced vendor duty victims to fork out $60 million more in tax to suit his own cynical announcement timetable. We cannot believe the Premier on tax and we cannot believe he is serious about reining in waste and expenditure. He is interested only in casting about for other people to blame. The budget is in such a desperate crisis that he is willing to blame anyone for the disgusting situation in which Australia's premier State finds itself. That should not have occurred. [Time expired.]
Mrs KARYN PALUZZANO (Penrith) [4.22 p.m.]: I commend the honourable member for Kiama for bringing this urgent matter to the attention of the House. We support the Premier in his determination to end the Commonwealth Government's GST rip-off. The honourable member for Kiama said that in relation to this issue the Leader of the Opposition likes to point the finger everywhere other than at the Federal Government. Rather than fight for the rights of families from Penrith and Vaucluse he is happy to sit back and let Peter Costello present a flimsy case as to why we do not deserve our missing $3 billion. The Leader of the Opposition does not have the backbone for the fight, but I am appalled that other Opposition members are trying to defeat this motion—for example, the honourable member for Southern Highlands, who spoke about everything but the GST.
Other Opposition members are copying the lazy approach of the Leader of the Opposition rather than working with the Government to achieve a better deal for New South Wales. Mr Costello referred to State governments "fighting over slices of the GST cake", but there is something seriously wrong with that cake. This is our money. The Federal Liberal-National Government has a $12 billion surplus. In that paddock at Riverstone a week ago I am sure the honourable member for Southern Highlands did not speak to the Federal member for Greenway about that surplus. Riverstone residents—indeed, everyone in New South Wales—could benefit from our missing GST billions through the provision of essential services such as health, disability services, home and community care, transport and housing.
Peter Costello must realise that if he wants to be Prime Minister he must act in the interests of all Australians. He should not engage in political arguments and blame his problems on Labor and the people of New South Wales. The Leader of the Opposition should wake up to the fact that he will never gain any credibility with taxpayers in New South Wales by parroting the Federal Victorian Treasurer's flimsy arguments. We deserve a fairer distribution of GST revenues for the families that we represent. Will Opposition members stand with the families and taxpayers of New South Wales—I doubt it—or will they stand with their political friends in Canberra? Will they deny the families and taxpayers of this State their fair share of GST revenue? It is money for which they have worked and which they are losing. They deserve to have more of that GST revenue remain in New South Wales.
The Leader of the Opposition is too lazy to argue the case with Peter Costello, which is a disgrace. Has he even bothered to appeal to the Prime Minister, whose constituents in Bennelong are being dudded under current arrangements? One thing that should motivate us all is the desire to secure more services and better infrastructure for our constituents. They have placed their trust and faith in each of us to fight hard to achieve those outcomes. The difference between the Iemma Government and the Debnam-led Opposition is fundamental: we will never walk away from this fight.
Opposition members can criticise us for bringing this great GST rip-off to the attention of the public and they can blame taxpayers from other States and Territories. However, one thing they seem unwilling to do is to send a clear message to the people in Canberra, who can fix it, that New South Wales families and taxpayers, and even the Governor of the Reserve Bank, realise the undeniable truth that we are being ripped off to the tune of $3 billion a year. The more Opposition members hide behind juvenile arguments and name calling, the more we see through them. Families in New South Wales know that a clear message should be sent to Canberra.
Opposition members could take their cue from the Leader of the Opposition—they could sit on the sidelines and carp and whinge—or they could be working for the people of New South Wales. If they claim to represent the interests of their constituents they should send a message to those who can make a change. They should ask the Treasurer in Canberra for more police, hospitals and schools. They will not even try to put an end to a scam that is hoodwinking the people we represent: the people of New South Wales. I would like to know whether Opposition members have appealed to their Federal counterparts. If they have they should vote with Government members on this motion. If they have an ounce of decency they will support the motion. For once they should put aside the interests of the Federal Government and take up the cause of the families and taxpayers they represent. Do not betray them in favour of a greedy Federal Treasurer from Melbourne: vote with Government members in support of this urgent motion.
Mr PETER DEBNAM (Vaucluse—Leader of the Opposition) [4.27 p.m.]: What curious contributions we heard this afternoon from Government members on just about every issue. Let us look at the problem. First, this motion attempts to congratulate the Premier on his unrelenting fight to end the great GST rip-off. As I demonstrated during question time, the Premier attended two Council of Australian Governments meetings and he failed, refused or whatever to ask for the GST arrangements to be put on the agenda. He played to the media when he got into trouble and the financial audit was about to be released.
I assume that Government members who are in the Chamber simply have not read that 70-page financial audit. If they had they would know it is a damning indictment of the Government's administration over the past 11 years. Every paragraph of that 70-page audit talks about the prudent budgetary practices that should have been place in New South Wales over the past 11 years. Every alternate paragraph states that those practices have not been in place to protect the people of New South Wales. The real issue is that the clowns opposite have been sitting on the Treasury benches burning up the money.
When the audit was about to be released Premier Dilemma decided he needed another distraction. So he reintroduced this GST debate, which I dealt with in the Parliament six months ago on the first sitting day in September last year. I said, "We can all sit here in the New South Wales Parliament and agree that Queenslanders are bludgers." We agree, but now let us do something about it.In September last year, six months ago, the Premier should have left question time in this place, driven to the airport, flown to Queensland and said to Peter Beattie, "We're going to renegotiate the contract". But Premier Dilemma refused to do that. Why? It is because it would require Premier Dilemma renegotiating with each Labor Premier and securing their agreement to changing the arrangements.
Mrs Karyn Paluzzano: Point of order: I am sure there is a standing order about addressing members of Parliament by their correct title. Members of Parliament have surnames. I ask the Leader of the Opposition to withdraw his racist slur. I would like Hansard to read back how the Leader of the Opposition referred to the Premier.
Mr ACTING-SPEAKER (Mr John Mills): Order! The honourable member for Penrith is correct in that the standing orders require honourable members to be referred to by their ministerial titles or their electorates. I suggest that the Leader of the Opposition take notice of the standing order and resume his speech.
Mr PETER DEBNAM: I would like to find out what I said. Can we find out what I said? I thought I referred to the Premier as Premier Dilemma, which is how he is referred to in the media. Is that what the honourable member for Penrith is referring to? Is that the problem, the honourable member does not like Morris Iemma being known as Premier Dilemma?
Mrs Karyn Paluzzano: Point of order—
Mr ACTING-SPEAKER (Mr John Mills): Order! I have already ruled on the point of order. The Leader of the Opposition will resume his speech.
Mr PETER DEBNAM: I will go back to discussing Premier Dilemma. The problem in New South Wales is that the financial audit was about to see the light of day and the Premier needed a distraction. So he began to talk again about the GST arrangements—six months after I offered to go with him to renegotiate those arrangements with each State Premier. Why did the Premier not do that? It is because no Labor member is interested in financial distributions or financial management. If we look back over the 11 years of Labor's stewardship of this State we will see that the spending Ministers are out of control. Former Treasurer Michael Egan decided that he had only one strategy to deal with his Labor colleagues: outrun them. He began to do that in 1996-97. Thereafter, he took the opportunity to raise taxes and charges in this State twice a year. He eventually broke the back of this State.
That fact is reflected in every single economic indicator for New South Wales. It has the lowest growth and high unemployment. New South Wales is not attracting investment; there is no wealth creation. It has an enormous bureaucracy. Jobs are not created in this State because businesses do not regard New South Wales as an attractive investment environment. That is the problem. As to getting the money back from the bludgers in Queensland, I am happy to help the Government. But it will require Premier Dilemma working with us and renegotiating the GST arrangements with the other State Premiers. Let us go and do it.
Mr BRYCE GAUDRY (Newcastle—Parliamentary Secretary) [4.32 p.m.]: The Leader of the Opposition has again insulted the people of Queensland. Those opposite indulge in name calling and attacking the Government rather than joining us in saying to the Federal Government and Peter Costello, "Send us back the $3 billion of the $13 billion that New South Wales pays each year in GST". The Commonwealth Treasurer has the ultimate responsibility for determining the distribution of GST funding among the States. The intergovernmental agreement states that the:
_ relativity factor for a State or Territory will be determined by the Commonwealth Treasurer after he has consulted with each State and Territory.
Peter Costello does not need to conduct a review to tell him that the taxpayers of New South Wales are paying too much money. The Premier has already told the Treasurer and John Howard. Ian Macfarlane, the Governor of the Reserve Bank of Australia, has made it very clear that the GST is unfair to the hardworking people of New South Wales. The New South Wales Government is not telling the hardworking people of Queensland that we want to make this decision; the decision is for Peter Costello to make.
I am proud to be the member for Newcastle and to represent in this place the hardworking business people and factory workers who are generating GST payments for the Commonwealth Government. But we say to the Commonwealth Government: Be fair and send the money back. The current arrangements treat New South Wales taxpayers very unfairly and continue to provide cross-subsidies to the resource-rich States of Queensland and Western Australia. Those cash-rich, mineral-rich States have accumulated massive surpluses. For example, the Western Australian Government can afford to spend $1 billion on expanding the rail system to Mandurah. The Queensland Government can afford to purchase the Australian Railroad Group Pty Ltd, the Western Australian heavy rail freight system, and go into competition with Pacific National. They are rotten rich with money at the moment, but it is not the fault of the Queensland people. How dare the Leader of the Opposition call the people of Queensland bludgers instead of dealing with the real issue in this debate.
The crux of the matter is the unfair allocation of GST revenue. Since the introduction of the GST the States have received a total of $4.3 billion more than they would have received under the old tax arrangements. But the taxpayers of New South Wales have consistently missed out. Only in 2004-05 did we receive more from the GST than we would have received under the old system. But we got a net gain of only $209 million in that year from a total of $4.3 billion. That is $31 per person compared with $297 per person in the rest of Australia. New South Wales taxpayers have received the lowest gains by far. The Northern Territory has received $1,825 per capita; Tasmania has received $530; Queensland, the ore-rich area of Australia, has received $458 per person; the Australian Capital Territory has received $426 per capita; Western Australia, $281; South Australia, $256; and Victoria has received $95 per capita. However, New South Wales has received just $31 per person. That is right: Queensland has received GST gains of $458 per person while we have got $31. No-one can claim that that is a fair distribution of revenue to a State that does not have the rich mineral resources that are currently driving the economies of Western Australia and Queensland.
We have said clearly that we are very happy to share the distribution of GST revenue with the Northern Territory, South Australia and Tasmania—the States that are struggling. But the current arrangements are patently unfair. I call on Opposition members to forget the prating of the Leader of the Opposition and join Labor members in saying to the Howard Government and Peter Costello: Return a fair rate of GST to the hardworking men and women of New South Wales. [Time expired.]
Mr MATT BROWN (Kiama—Parliamentary Secretary) [4.37 p.m.], in reply: A number of honourable members have contributed to this debate but the only good performances were by my colleagues the honourable member for Newcastle and the honourable member for Penrith, who articulated clearly the needs of their communities and why this State requires a better deal. For some bizarre reason the Leader of the Opposition did not lead for the Opposition in this debate; in fact, he was the supporting speaker. Instead the honourable member for Southern Highlands misled the House. She claimed that State taxes are too high. But one of the reasons New South Wales does not receive as much money as it should under the GST formula is that the Grants Commission says that the New South Wales Government should be taxing property owners even more.
That is clearly spelt out in Grants Commission reports. The contradiction of that finding by the honourable member for Southern Highlands is a clear demonstration that she is not on top of this issue. The Leader of the Opposition said that the Premier should catch a plane to Queensland, sit down with the Queensland Premier and say, "Listen, why don't we take some money away from your State so that we can have it?" If the Leader of the Opposition thinks such an agreement will be reached he must think also that pigs fly backwards to Mars. He has no idea. I believe the Queensland Premier would want to keep as much money as possible for his constituents.
Mr Thomas George: Is that right?
Mr MATT BROWN: Yes. The honourable member for Lismore has no idea. He thinks the Leader of the Liberal Party can go to Queensland and persuade the Premier to give back money to New South Wales. It is very simple: the Federal Government is the mob that has control over GST revenues. The Treasurer is the person in the Federal Government in charge of GST revenues, as is stated clearly in legislation. In fact, it is stated at least three times in Federal legislation and in related documents. For example, it is stated in the Tax Act. Section 9 of the A New Tax System (Commonwealth-State Financial Arrangements) Act 1999 states:
The relativities factor for a state for the GST year is the factor determined in writing by—
That is, the Federal Treasurer. The relativities factor is the factor that determines the share of the GST funding pool allocated to each State. The Intergovernmental Agreement on GST talks about how moneys are to be distributed. It states:
The relativity factor for a State or Territory will be determined by the Commonwealth Treasurer after he has consulted with each State and Territory.
It is determined by the Federal Treasurer after consultation. However, it does not say that there has to be agreement. The Opposition says that all the States must agree, but that is not right. The Federal Treasurer has the final say after consultation. The Commonwealth Grants Commission is purely an advisory body to the Federal Treasurer, as set out in the Commonwealth Grants Commission Act 1973 and as every independent Commonwealth body has confirmed. In its review of State revenue sharing relativities in 2004, the Grants Commission stated:
The Commission's advice on per capita relativities is considered by the Ministerial Council for Commonwealth State Financial relations.
Following that consideration, the Australian Government Treasurer determines how the revenues are to be shared.
The Australian Bureau of Statistics stated:
_ the Commonwealth exercises its influence and discretion over the setting of GST and the distribution of its proceeds.
A Federal Treasury bureaucrat, Mr Wilcock, provided an answer in response to Senate estimates questioning on 2 June 2005. He stated:
Section 9 of the GST legislation accords to the Treasurer the role of determining the relativities that determine the grants to the States.
The Leader of the Opposition should stop the nonsense of saying "Come on Premier, let's go up and talk to Premier Beattie." Even if he did that, it would have no legal effect. The only person who can change the arrangements is Peter Costello in the Federal Government. We ask him to give a better deal to every electorate and every person in this State.
Motion agreed to.