The reasons are now apparent as to why Jim Bacon and David Crean were so eager to sign up to the New Tax System.
The new economic stimulus package announced yesterday by the Tasmanian Government is funded from the New Tax System introduced by the Commonwealth Government.
The Tasmanian Government has already received $851,360,000 in GST revenue from the Commonwealth. Next financial year, GST payments for the Tasmanian Government are expected to total $1,087,400,000.
The Commonwealth's New Tax System also pays Tasmania to abolish State taxes such as Financial Institutions Duty and stamp duty on quoted marketable securities on 1 July this year. It allows the Tasmanian Government to plan for future spending increases and tax cuts.
The GST is already paying for Tasmanian schools, hospitals, roads and environmental protection, as well as paying the salaries of State government employees such as police and nurses.
The biggest threat to these Tasmanian public services is Kim Beazley's proposed rollback of the GST, which would, by definition, reduce revenue and reduce services to Tasmania.