28 August 2017
Media Release - #2017082, 2017

Shorten’s GST ‘fix’ a new Labor tax blitz

Once again, Labor thinks they can fix a problem by writing a big cheque with no clue how to pay for it. The answer is you, by the way. That is what we saw from Bill Shorten on Saturday, talking about the GST. Mr Shorten is not proposing to fix GST sharing arrangements for WA.

In fact, he has ruled out actually fixing how the GST is distributed. All he has done is copy our Federal GST top-up payments to WA, which we have been making for three years.

The key difference is he can’t tell anyone how he will actually pay for it. Our top-up payments have already been paid to WA, they’re in the bank.

It is all Labor know how to do — throw money around and forget about the consequences, especially who ends up having to foot the bill.

West Australians deserve more than just a quick fix, bandaid solution on an issue that is complex. WA deserves a proper and lasting solution.

The Turnbull Government has been open and honest about West Australians copping a raw deal from the current GST payments system.

There are real and genuine grievances from West Australians concerned they are not getting their fair share. We understand this. We were the first to acknowledge it and do something about it.

I particularly have great sympathy with the argument that WA has been penalised, not rewarded, for their efforts. While other States have kept their resources in the ground and banked higher GST payments, WA was effectively short-changed by doing the right thing.

The system is broken and needs a proper fix. That’s why I tasked the Productivity Commission to investigate whether Australia’s system of GST distribution is affecting our national economy and productivity. We need a well reasoned, sensible and durable solution to GST distribution. One that is lasting, not one that is undermined by special deals or restricted to temporary bandaid measures. That is what the Government is working towards and will announce once it has been finalised.

Mr Shorten’s plan is entirely unfunded and will therefore come from your pockets. Labor has already committed to lumping $150 billion and more in extra taxes on Australian households, which will hit WA hard, just as the State economy is starting to make its way back.

Labor’s tax blizzard includes six new higher taxes on housing, investments, small and medium-sized business, family businesses, savings and wages. At the last election Labor committed to more than $100 billion in higher taxes and a deficit that was $16.5 billion deeper.

This latest promise will simply add to Labor’s frightening tax toll. They can’t pay for it with the higher taxes they’ve already announced they will spend on other things.

And they can’t spend the money twice. This is how Labor created an almost $57 billion funding black hole for the National Disability Insurance Scheme, spending savings twice.

Labor’s track record of delivering on GST for WA is appalling and cannot be trusted.

When Labor was last in government, WA’s share of GST payments more than halved — and they did absolutely nothing about it. They turned their backs on the State for six years.

In 2007 Kevin Rudd promised a $100 million a year infrastructure fund. It never happened. In 2010 Wayne Swan promised a $2 billion WA Infrastructure fund to be funded by the mining tax. It never happened.

And let’s not forget Labor’s GST review that Mr Swan shelved in 2012. It decided to leave the system unchanged, while WA’s GST share fell like a stone.

In addition, West Australians should never forget what Labor did to crunch confidence in the mining sector in WA, with their anti-WA mining tax, at such a sensitive time.

We also have to highlight that committing to a floor and top-up payments two years out, runs the risk of a further Budget blowout.

Forecasting GST relativity under the current system is difficult at best, given the many variables, including highly volatile movements in commodity prices.

Labor cannot guarantee WA’s relativity will be at 60¢ by 2019-20. Every single cent less adds a mountain more debt on the shoulders of Australian households. In Labor’s language, more debt equals more tax.