The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

17 December 2012

Doorstop interview

Canberra

SUBJECTS: Standing Council on Federal Financial Relations Meeting; GST Review; State Tax Reform; Nielsen Poll

TREASURER:

Today I'm meeting with all of the State Treasurers. One of the things we're doing today is we're considering the conclusions of an independent review into the distribution of GST revenues to the states. That review endorses the current approach and the current approach ensures that all states have the revenues to provide a similar level of services. That's a very, very important conclusion which has been backed in by this independent review, headed by Mr Brumby and Mr Greiner.

The one thing the Commonwealth won't be doing today is that we will not be considering any increase in the rate of the GST or any case to broaden the base of the GST. That is the lazy way to go about tax reform and doing that would hit the lowest income earners in our community really hard.

So from the Commonwealth's perspective it's not on the agenda. I hope it's not on the agenda of the State Liberal Treasurers either because they have been encouraged by Mr Hockey to put this on the agenda. But for the Commonwealth, it is not something we will consider, as I said before, because it hits lower income earners harder. It's the lazy approach to tax reform. The states can reform their own taxation systems if they wish, and one of the taxes they should get rid of is stamp duty, because that really hits a lot of Australians really hard.

JOURNALIST:

You paid Nick Greiner and John Brumby quite a lot of money I imagine to do this review. Nick Greiner wasn't asked through the review process to actually look at raising the rate of the GST, he has independently of that said that it should be. He spent all this time looking at it, why isn't his perspective worth following through?

TREASURER:

First of all, the report does not recommend any increase in the rate or the base of the GST and that is the report that we are considering today. Now, Mr Greiner is a long-term Liberal, and many Liberals do believe in increasing the rate and the base of the GST. But I'm a Labor Treasurer, I don't believe in doing that. I don't believe that it is good tax reform - it hits lowest income earners hardest and it is the lazy approach to tax reform. We've been getting on with tax reform at the Commonwealth level and the states can get on with it at the state level if they've got the political will.

JOURNALIST:

Doesn't that render the meeting a bit pointless if you're ruling things in and out before you even get in there?

TREASURER:

Not at all because there's no proposal on the agenda to increase the rate or the base and that is not a recommendation of the report that we are considering this morning. But many Liberals do want to increase the rate and the base of the GST and Mr Hockey has encouraged his Liberal colleagues to pursue that course of action. I'm making it very clear today from this Labor Government's perspective that we will never consider increasing the rate or the base of the GST.

JOURNALIST:

You're encouraging states to cut stamp duty, what should the other revenue streams to cut that be?

TREASURER:

Well they've got a number of revenue streams at a state level that they can consider, and there has been tax reform in the ACT where they have reformed their tax base and that option is open to them. But that's entirely up to them.

JOURNALIST:

The OECD suggests lifting the rate, why do you disagree?

TREASURER:

For all the reasons I just outlined before. This is a regressive tax. It hits the lowest income earners hardest. The fact is that we've been getting on with tax reform over the past five years and we've been doing it in a way which is fair to all within our community - most particularly for those on low and middle incomes in Australia and who work hard to raise their kids.

JOURNALIST:

You'd be pretty pleased about the poll today showing that a lot of voters aren't concerned about the AWU issue?

TREASURER:

I don't comment on opinion polls week to week, or really month to month. But I'm very confident that we can win the next election. We've got a Prime Minister who is tough as teeth, a Prime Minister who has got ideas for the future, and we've got an Opposition Leader who is a policy weakling, and of course, a thug when it comes to personal attacks.

JOURNALIST:

Will it be a formal directive from you to the states today to cut stamp duty, or is it just an idea you're talking about?

TREASURER:

No, [state] tax reform it's entirely up to them. They have agreed to go through a process themselves of looking at future tax reform at a state level and that's entirely a matter for them.

Thanks a lot.