GST revenue change fought by key South Australian Liberal MPs, defying Federal Government push
SOUTH Australian Liberals will fight to stop the state losing hundreds of millions of dollars in GST revenue despite their own Government’s push to change how it is carved up.
SA News
Don't miss out on the headlines from SA News. Followed categories will be added to My News.
SOUTH Australian Liberals will fight to stop the state losing hundreds of millions of dollars in GST revenue despite their own Government’s push to change how it is carved up.
The move by federal MPs and senators will come as an unwelcome roadblock for Treasurer Scott Morrison, who ordered a major review of how the lucrative tax is shared around the country seem as a bid to appease West Australians.
The Productivity Commission’s proposed changes to the formula that could cost SA up to $557 billion, based on this year’s funding.
It comes as SA and Tasmanian Labor Senators joined together in Parliament to formally call on the Turnbull Government to release the final report before both state elections next month. The move highlighted the split between Federal Labor and the WA Labor Government, which was pushing for an overhaul. The Commission was last month granted an extension to release its final report in May.
The Federal Liberals’ vow follows State Opposition Leader Steven Marshall’s decision to oppose any change to the GST carve-up which would leave SA worse off. But SA’s two Federal Cabinet Ministers Christopher Pyne and Simon Birmingham were quick to quell fears by emphatically stating the Turnbull Government had no policy to change the way the cash was distributed.
“The Productivity Commission writes reports, the Government makes policy. There is no policy to change the GST mix,” Mr Pyne said.
Senator Birmingham said he expected every member of Parliament to fight for the best outcome for their state. “But right now there’s no proposal for change and nothing for people to fight over,” he said.
However in January, Mr Morrison said the Commission’s draft report “demonstrated the system is broken and needs a real fix”.
Mr Morrison has acknowledged the need for transitional assistance for any states that receive less from the GST because of changes to the revenue-sharing system known as horizontal fiscal equalisation.
Horizontal fiscal equalisation was designed to ensure Australians in all states and territories have access to quality government services.
The Commission’s draft report suggested changing a rule designed to ensure states have the same fiscal capacity as the strongest jurisdiction and instead linking payments to an the average capacity or that of the second-strongest state.
Mr Morrison has warned that comparisons with previous years’ distributions, such as the $557 million figure, were “misleading and an unreliable guide to future impacts”.
Boothby MP Nicolle Flint said she would make sure there was a “fair deal for SA”.
“As a proud South Australian I will be fighting to protect the state’s interests,” she said.
Liberal Barker MP Tony Pasin said the principle behind the redistribution was to balance out the states’ revenue raising inequalities.
“Any attempt to undermine this principle will be met with a fierce fight from me and, I would expect, every other South Australian in Federal Parliament,” he said.
“My community would be severely disadvantaged if this proposal was to become reality. Every Australian has the right to equity of services whether they live in WA or SA or NSW.
“I don’t want to see this nation become divided by state borders into haves and have-nots. I will not stand by and let that happen.”
Newly minted SA Liberal Senator Lucy Gichuhi raised concerns over the effects on SA if the Commission’s interim proposal was implemented.
She said if such a change was pursued there would need to be measures to “cushion” SA against a possible impact. “SA continues to suffer from challenging socio-economic issues such as a high unemployment rate, a low workforce participation rate, an ageing population ... among other things,” Senator Gichuhi said.
Grey MP Rowan Ramsay said the current GST carve-up was not sustainable in the long-term but suggested putting a minimum on the cents in the dollar return as an alternative to the Commission’s draft recommendation.
“We cannot on one hand promote Australia as an equal nation if we have winners or losers within our health and education systems,” he said.
“So if HFE is not fully met through the GST it must be addressed through other mechanisms. I will resist change until I’m sure SA’s interests are protected.”
SA Senator David Fawcett said he was not convinced states would be able to find agreement on a new formula as each would fight for their interests. He said a more worthwhile debate would focus on ensuring states such as SA were spending the money efficiently.
Federal Labor treasury spokesman Chris Bowen has ruled out support for any plan that would negatively effect states to the extent of the Commission’s interim proposal. Instead, Federal Labor has committed $1.6 billion to fund infrastructure in WA.
Nick Xenophon Team Senator Rex Patrick sided with Labor to call for the Commission’s final report to be released before the State Election.
Battle to save animals on the brink at Outback reserve
Conservationists are battling to save animals at an Outback reserve from the effects of the worst drought in recent memory, and have received a funding boost to redouble their efforts.
Country tradie to face court over incomplete work
A country tradesman will face the Elizabeth Magistrates Court over allegations he was not licenced and refused to refund money to clients.