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

21 May 2013

Joint Doorstop Interview

Joint interview with
the Hon Kate Ellis
Minister for Employment Participation
Minister for Early Childhood and Child Care
Member for Adelaide

Adelaide

SUBJECTS: National Plan for School Improvement; GST; Same Sex Marriage; Negative gearing.

ELLIS:

Look it is fantastic to be here at Prospect Primary School with the Deputy Prime Minister and Treasurer Wayne Swan here today. This is a fantastic school and it is a school that our Government is determined that we will continue to invest more money in and ensure that there are even greater results for the young students who are here today. We know that our National Plan for School Improvement will mean an additional over $600 million for South Australian schools. Now what that means right here at Prospect Primary, and schools right across the state, is an additional 1,000 teachers. It means that we can have the resources there for the students that need it the most. And ultimately it means that we meet our goal of ensuring that every child in Australia has the best opportunity for a great education going forward. We believe that this is - and must be - a national priority, and that is why I am so proud to be here with the Treasurer who managed to find the funds for these important school improvements in what was a very tough Budget because we know that education is at the heart of this government and it is absolutely our priority.

TREASURER:

Thanks Kate. It is great to be here at Prospect Primary. It was great to meet with Devon who thinks that the NAPLAN test is something that he wants to do pretty regularly. It was good to meet some students, to meet the school leaders, to meet the Principal and to see so many parents here this morning because great schools are the product of good teachers, supportive communities and kids who are energised and want to work. But of course, giving them the best resources to make our schools to make our schools the best in the world is what goes to the very core of our Budget. Making the resources available to the schools so they can do better. The fact is that we need our schools to do better over the next decade and that's why in this Budget we put in place a plan fully funded for well over six years - for a decade or so - to really improve the performance of our schools so that we can make our economy prosperous and our society fairer. And that really goes to the heart of the Budget, it is about making the economy stronger, putting jobs and growth first, making our country fairer - particularly through our commitment to DisabilityCare - and finally through our commitment to the school improvement program setting this country up for the future. Making sure kids who are coming to schools like this get the best possible start in life, for their family, for their opportunities in life, but also for our country. So that is why the Budget is so important in communities like this one.

There has also been a bit of discussion around in recent days particularly coming out the Premier in Western Australia, that he would like to see a change to the GST distribution formula to the States. And if Mr Barnett had his way, and Mr Abbott and he had their way and went to a per capita distribution model, that would have a savage impact on states like South Australia. It would see the withdrawal of $1 billion in GST revenues which go to the States, withdrawn from the state of South Australia if Mr Abbott and Mr Barnett and other Liberal Premiers went to a per capita model - but would also savagely hit Tasmania.

I want to make it very clear that our Labor Government will never support those sorts of changes which will really punish states like South Australia and really hit the provision of essential services such as health and education. And of course, now we have got more leading Liberals out saying that the GST itself should be increased and its base should be broadened to food. I want to make it very clear that this Labor Government would never ever support those sorts of proposals, although leading Liberals continue to do so. In the state of South Australia, if that were to happen, that would mean a double whammy here in South Australia. Less money coming in terms of the distribution of the money raised and a savage hit to low and middle income families from those sorts of changes. So this Labor government would never support those sorts of changes that leading Liberals continue to talk about on a daily basis.

JOURNALIST:

Treasurer, speaking of a per capita funding model, the $600 million being offered to South Australia under the Gonski reforms is less per capita than being offered to states like New South Wales. Is South Australia being punished for already spending more on education?

TREASURER:

No, that is not an accurate description of what is going on here. What you have got in other states is loadings which relate to particular circumstances in the State - of course, it starts from a common resource standard. But in saying that, in a state like Queensland or a state like New South Wales which are very decentralised and where there are large numbers of people living outside of metropolitan areas and large numbers of people in Indigenous communities and so on, there are additional loadings. So what you will see in some of those states is loadings which are part of the formula which applies across the country, loadings which provide for particular features of service delivery which occur across various states. And that is primarily what you see. $600 million is a lot of money to put back into schools. It is very important and we are hoping to reach a conclusion with the South Australian Government on this important injection of new money into South Australia which will mean additional teachers, additional resources, additional specialist services in schools across the State.

JOURNALIST:

Treasurer, can you explain why some people think that there the recurring costs (inaudible)

TREASURER:

This is just another special from Christopher Pyne who is out there fiddling the figures yet again. The fact is that what is happening here is that many States are withdrawing resources which affects their indexation level. And if we don't move to this new formula, and we continue with the old formula Mr Pyne is attached to, then that will see a substantial reduction in funding to States right across Australia. Mr Pyne has attached himself to a formula which if were implemented would really savage the provision of services across a range of States when it comes to education.

JOURNALIST:

Can you confirm that only $700 million over the forward estimates is new money for the Gonski reforms?

TREASURER:

Well the Gonski reforms come over time. What you are not including is the partnership money that the Commonwealth Government has also put in which will also be withdrawn if these new services weren't signed up to. So you can't do the calculation that way.

JOURNALIST:

So much money over the full six years is there?

TREASURER:

Over six years it is $9.8 million [ billion] and when you put the partnership money in, it is more than that.

JOURNALIST:

Treasurer, just back on the GST, everyone hated the GST when it first got announced and obviously it is a good thing to attack the Coalition on. But what if some point is it shown to be a fairer way to increase your tax base?

TREASURER:

Well, the GST is not a fairer way to do anything in the area of taxation. I have never favoured the GST as a course of action. It was introduced by the previous conservative government. It remains as part of our system. But increasing either the rate or the base would unfairly hit many low and middle income earners in our community because its extension, for example, to food would have a dramatic impact on the capacity of the spending power of people on low and modest incomes. I simply don't support it. I never have. I have been entirely consistent in my view about the GST. It is a tax which hurts those on low and middle incomes the most, and therefore I don't support it and I don't believe it is the way ahead for tax reform in Australia. That is why, for example, I didn't allow it to be subject of study by the Henry Review.

But I would make another point about the Henry Review because the number one recommendation of the Henry Review was for a Resource Rent Tax. And of course, that is opposed by all the conservative parties across Australia who are now saying that they apparently are supportive of other matters within the Henry Review. I make it very clear: this Labor Government is in favour of a taxation system that is fair to all, that provides incentives for those who work hard, and I don't believe an increase in the rate or the base of the GST does that at all.

JOURNALIST:

Katy Gallagher has said she wants a review of the GST. Are we starting to see State Labor leaders shift on this?

TREASURER:

I am not aware of the commentary you've made. But I know where Federal Labor is on this question and we have had a very consistent position and it won't be changing. I can assure you of that.

JOURNALIST:

If it is so unfair, why don't you change it?

TREASURER:

Well we made it clear when it came in and we did everything we possibly could to stop it. But it couldn't be removed once it was in. But we are not going to continue to, if you like, broaden the base or lift the rate because that would be unfair. And I made that view really clear over a long period of time. I have been consistent in this view the whole of my political life, through all my political involvement. It is not the way to go for the future of Australia to smash low and middle income families in this community, putting a new tax on food or jacking up like John Hewson says the rate of GST to 20 per cent. That would really punish low and middle income earners in this community.

JOURNALIST:

Will you be meeting with the Premier to talk about Gonski today?

TREASURER:

No I will not be meeting with the Premier. But the Prime Minister is talking to the Premier all of the time and we'll continue those discussions.

JOURNALIST:

Are you aware of what South Australia's concerns are? Why they haven't signed up yet?

TREASURER:

Well, there are broad discussions and the Prime Minister is having those discussions with the Premier as is appropriate.

JOURNALIST:

Do you have any comments on Kevin Rudd's backflip on same-sex marriage?

TREASURER:

Look I respect his decision as I respect the views of all people. This is an issue were views are deeply held and that is why it is appropriate that we have a conscience vote in the Parliament. Issues like this should be the subject of a conscience vote. They are in the Labor Party but sadly not in the Liberal Party led by Mr Abbott. They oppose a conscience vote. The Labor Party supports one. And I support the individual decisions that members themselves take. And I respect those decisions.

JOURNALIST:

Have you changed your view on the matter?

TREASURER:

No I haven't.

JOURNALIST:

What is your view Minister Ellis?

ELLIS:

I voted in the Parliament eight months ago. I voted in support of the motion that was before the Parliament and I continue to support a conscience vote and people being allowed to put forward their personally-held view.

JOURNALIST:

Just a last one, negative gearing has been raised today. Joe Hockey is supposedly looking at it if they win Government. Are you looking to continue with negative gearing? Is it something that is simply too hard to get rid of?

TREASURER:

We ruled out any changes to the existing arrangements in our response to the Henry report. But it appears that the Liberal Party have thrown open that whole discussion. That is entirely a matter for them.

Thanks.