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Statement from the Treasurer on GST

Ahead of tomorrow’s meeting of Treasurers and Friday’s COAG meeting, I want to once again make the Tasmanian Government’s position on GST clear.

The Government will participate in this discussion with three very clear principles in mind. They are:

1. Before raising taxes, all Governments should ensure they are spending as efficiently as possible;

2. Tasmania has a higher proportion of households in lower socio-economic groups that would be affected; and

3. We will not support any change to the distribution methodology of the GST as this would disadvantage Tasmania.

However, the Government will engage proactively in a discussion about potential changes to the tax system, but we are not convinced that increasing or broadening the GST, for the reasons outlined above will be in Tasmania’s best interests and we make absolutely no apologies for that position.

We are very open to considering potential improvements to the way Government operates as proposed through the Harper reforms.

We note that the Government has either already implemented, or is implementing significant reform in a number of areas mentioned by the Harper Review, such as planning reform, the sharing economy and delivery of health and human services.

It is our view that Governments of all persuasions should focus first and foremost on reining in expenditures, as we have done. We’ve reduced expenditure growth to 1.1 per cent and reduced the size of the public service by around four per cent, which has resulted in a significant improvement to the budget without the need to consider tax increases. There is a lot of uncertainty about what a potential reform package may look like, what, if any, compensation would be offered to low income earners, and what changes may be applied to the current system of horizontal fiscal equalisation. What we do know for sure is that what is currently on the table will leave Tasmania and Tasmanians worse off.
Peter Gutwein, Treasurer

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