Simon Crean regrets use of ‘rollback’ but not Labor’s opposition to GST

Simon Crean stands by Labor’s decision to oppose the GST and promise to roll it back at the November 2001 election.

Simon Crean and then Labor leader Kim Beazley in 1998.

Simon Crean, who became shadow treasurer and deputy leader of the opposition after the October 1998 election, stands by Labor’s decision to oppose the GST and promise to roll it back at the November 2001 election.

“We opposed the GST because it was regressive and instead we put forward a plan that was tax reform without the GST, and we campaigned on that,” he told The Australian. “Our plan also included cuts to marginal income tax rates but was not funded by a new consumption tax that the government did not have a mandate to implement.

“I do think it was right to oppose the GST because it was inherently unfair and it was also very complex for small business. It was not necessary and we demonstrated that it was not necessary. I still believe the next step, had we won in 1998, would not have been to move to a broad-based consumption tax.

“We had shown a preparedness to look at broadening the wholesale sales tax back in 1985 and I think we could have got agreement around that if we had time. I still think … the best form of tax distribution is a price on carbon — a market mechanism on carbon — and that is another revenue stream which you can use to redistribute income.”

However, Mr Crean regretted Labor’s use of the term “rollback” to describe how it would remove the tax.

“I think using the term rollback was a mistake, but we made the point that once you scramble eggs you can’t unscramble them,” he said. “But we did think you could achieve tax reform without a GST and we would have worked to ameliorate some of the more egregious impacts. But the term rollback was easy to parody, which (Peter) Costello did.”

Mr Crean — who served as opposition leader from 2001 to 2003 — said Labor was committed to reforming business taxes following the Ralph review and was disappointed the Howard government reneged on an agreement that addressed personal services income being avoided by setting up trusts.

“While we opposed the GST, we did not oppose the other part of the tax reform package which was business tax reform,” he said. “I reached agreement with Costello on the implementation of that tax reform package and it involved accepting changes to capital gains tax but in return he had to agree to taxing different entities such as trusts.”