|About this Item||Subjects||Budget: New South Wales; Federal State Relations; Finance: New South Wales; Economy; Tax: New South Wales; GST
||Speakers||Speaker; Seaton Ms Peta; Iemma Mr Morris
||Business||Questions Without Notice
Ms PETA SEATON: My question is directed to the Premier. Given Australian Bureau of Statistics figures released today suggest his tiny $21 million budget surplus for this financial year has disappeared, despite the $700 million in new taxes that he has introduced since becoming Premier, will he now rule out any further new taxes or increases in existing taxes?
Mr MORRIS IEMMA: The half-yearly forecast estimate of growth in gross State product [GSP] is 2 per cent in 2005-06 and a State final demand of 2½ per cent in 2005-06. So the honourable member has it round the wrong way—which is no surprise. Opposition members were desperate for a negative figure today, and they just could not get one. The Government's record is: four tax cuts in seven months, scrapping of the vendor duty, an increase in the land tax threshold to $352,000, a 5 per cent cut in workers compensation premiums, and a $90 million payroll tax concession package. Those four tax cuts in seven months are stimulating economic growth, investment and jobs, which are our priorities. Today's figures confirm a respectable 2 per cent growth in the State's economy. Make the comparisons with the United States of America and Western Europe, as Standard and Poor's has done, and you will come to the conclusion of a respectable, steady, solid growth. That 2 per cent is the assessment. The honourable member has the mid-year statement round the wrong way.
Yes, the mid-year statement in December forecast a modest surplus of $21 million. But judge the Government on its record—four tax cuts in seven months! Just imagine how much more we could do with a decrease in taxation and costs on businesses if today's news on the GST had been better. But, no, the cheating continues. The honourable member quoted what business and Australian Business Ltd [ABL] had to say. Not only did it confirm that with a growth of 2 per cent we are heading in the right direction, it also said that we need to see a real change in the way the GST is distributed. That is, New South Wales business is sending a message to Coalition members to stand up for New South Wales. That is the invitation. We need to see a real change in the way the GST is distributed—and that change needs to come at a national level. This is an area in which we need national leadership. This is what was said today by ABL, the peak business organisation in this State: we need to see national leadership on getting New South Wales a fairer distribution of the GST.
ABL offers to lead a business delegation to Canberra—not Brisbane, but Canberra—calling on the Commonwealth to show national leadership to give New South Wales back the money that it has been cheated out of, and continues to be cheated out of. The Opposition has been silent today about the GST—another Grants Commission decision, another failure to reinstate the relativities in favour of New South Wales. Is there a press release or statement from the Opposition on the continued cheating? No—nothing. They were not prepared to criticise the Commonwealth.
Mr Peter Debnam: Point of order: There has been statement after statement from the Opposition about the GST.
Mr SPEAKER: What is the point of order?
Mr Peter Debnam: Six months ago I said that the Premier and I should go to Queensland to renegotiate with Peter Beattie.
Mr SPEAKER: Order! The Leader of the Opposition cannot take a spurious point of order to create an opportunity to speak again.
Mr Peter Debnam: Today the New South Wales Treasurer has offered to make that trip with me. The Government's Treasurer and I will go and renegotiate with Queensland.
Mr SPEAKER: Order! The Leader of the Opposition will resume his seat.
Mr Peter Debnam: If the Premier cannot do that, I will.
Mr SPEAKER: Order! When the Leader of the Opposition is given the call to take a point of order, he should state his point of order instead of making a statement. That will enable me to rule on the point of order.
Mr MORRIS IEMMA: ABL says we should go to Canberra. It is offering to lead a business delegation to Canberra—which is where the decision rests, not in Brisbane. The Leader of the Opposition will not look John Howard in the eye and tell him to give the money back. For the record, section 9 of the legislation entitled A New Tax System (Commonwealth-State Financial Relations) Act 1999 provides:
The relativities factor for a State [to receive the] GST … is the factor determined in writing by the [Federal] Treasurer.
That is, Mr Costello. The intergovernmental agreement on the GST states that the Commonwealth Treasurer will determine the relativity factor for a State or Territory. If that is not enough, the Commonwealth Parliament passed the Commonwealth Grants Commission Act of 1973, establishing the Grants Commission as purely an advisory body to the Federal Treasurer. Opposition members who want further proof should refer to section 96 of the Australian Constitution:
… the [Commonwealth] Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.
It has nothing to do with the Queensland Parliament, nothing to do with Peter Beattie, and nothing to do with getting on a plane and going to Brisbane. It is in Canberra. The 2004 review of State revenue by the Commonwealth Grants Commission said that the Australian Government Treasurer determines how the revenues are to be shared. The body that does the calculation that is involved in the relativities and makes recommendations. the Grants Commission says that it is the Australian Government Treasurer who makes the decision. The Australian Bureau of Statistics provides further evidence. It stated:
… the Commonwealth exercises its influence and discretion over the setting of the GST and the distribution of its proceeds.
Federal Treasury official, Michael Wilcock, in evidence to the Senate estimates, had this to say about section 9 confirming the legislation: the GST legislation accords to the Commonwealth Treasurer the decision on the distribution of the GST.