Tax focus derailing debate on PM’s Federation reform, says Campbell Newman

CAMPBELL Newman has criticised the Tony Abbott-led reform debate on federation, saying it has “gone off the rails’’.

CAMPBELL Newman has criticised the Tony Abbott-led reform debate on federation, saying it has already “gone off the rails’’ with its focus on taxes.

The Queensland Premier, who began championing an overhaul of federal-state relations last year, said the debate needed to first define the service responsibilities of each level of government before determining how they are funded.

Mr Newman, who has ruled out supporting a GST hike, said the reforms could be negotiated and implemented without any tax increase in the short-term through savings in wiping out waste and duplication.

“What I’m concerned about is, sadly, it’s turned into a discussion about tax,’’ he said.

“It shouldn’t be about tax, it should be about responsibilities, defining those respective responsibilities, the levels of government, then focusing on what they are meant to do and getting the funding share to fulfil those responsibilities for the community.

“I think it is going off the rails, it is going into the swamp.’’

Mr Newman said the provision of school education was one area that should be solely handed over to state control. Once state and federal governments negotiated their roles, the funding for the provision of those services should then be quarantined. “Then, having done the negotiation, and the state government has its defined responsibilities, it needs to be funded and we look then at all array of taxes and charges and it then has control over them to pay for it into the future,’’ he said.

Mr Abbott and the state and territory leaders have agreed to a white paper on the federation, with a proposed reforms to be taken to the next federal election, due in 2016.

Mr Newman said the debate had been overrun by discussion about the need to raise the GST to help states pay for services into the future. But he said the reforms may save billions, and spare the need for tax hikes.

“There have been university studies — don’t ask me to name the sources today offhand — but a couple of universities have done studies on this,’’ he said.

“They nominate that the savings annually, recurrent savings through a reform of the federation through cutting out waste and duplication would be in the order of $20 billion to $85bn a year.

“So if you think about that lower estimate — $20bn, the Queensland share nominally could be about $4bn, and that’s compared to a $50bn-a-year budget. It’s up there, you know, getting up around 8 per cent, and it doesn’t involve an extra tax burden on Queenslanders and other Australians.”