Taxation

Mr HAWKE (Mitchell—Assistant Minister to the Treasurer) (15:22): It is like it is 1998 all over again. It is a time warp. It is a bit of Pulp Fiction. It is, 'Let's do the time warp again,' from the member for Watson, because here is today, not articulating of course the magic number 15, which the opposition has been talking about relentlessly, week in, week out, month after month, day after day, 15 this, 15 that, 15 per cent, 15 per cent, 15 per cent, and suddenly today—no 15 per cent. What has changed today? Why don't we hear about the 15 per cent GST that they are proposing today? Why don't we hear about the number 15, Member for Watson? Why did you have to revert to the 1998 debate about why the GST was bad?

The Australian public already know that the Labor Party opposed the introduction of the GST; one of the most retrograde events in Australian political history, opposing what was a sensible reform to the tax system of that opposition. Here we are, almost 17 years later, and the member for Watson is seeking to continue to prosecute the argument against the goods and services tax—a proposal that has been adopted by the Australian people, a proposal that has been adopted by every state and territory, which has worked to broaden the base of the tax system, abolish inefficient taxes and secure the funding base for the states into the future. And there is not one argument today, not a single argument, about why the Australian tax system is in need of reform.

If the member for Watson was serious about contributing to the conversation that we are having, if he wanted to have a discussion, he would have discussed why the 15 per cent is not good in his opinion and what combination of taxes need to be abolished to make it work. That is the conversation that the government is having with the Australian people: what combination of tax reform is needed to ensure that we have a tax system that is fit for purpose for the 21st century?

If you really wanted it, if you were really serious about opposing the GST, when you came to office in 2007, you could have taken action to reduce the rate of the GST. You could have had that conversation with the Australian people. But we know and every member on this side knows that the Labor Party did have a conversation about the GST while they were in office from 2007 to 2013. They did have a conversation. But it was not a public conversation. It was not a conversation with the people listening or the people in the gallery; it was not a conversation with the government. It was not a process about 'What can we do to reform the tax system?'

The shadow Treasurer Chris Bowen had modelled three scenarios for the increase to the GST, not a conversation with the Australian people—and the member for Griffith would be interested in this, because she was not here; it was the former member for Griffith's government that modelled this. There were three scenarios to increase the GST modelled by a Labor government, modelled by a Treasury at the direction of the shadow Treasurer. We do not have scenario 1; we do not know what scenario 1 was. We do not know what scenario 2 was. No-one in the Australian public knows what scenario 1 was or what scenario 2 was. What was the rate that the government of the day was considering—the Labor government? What was the increase to the base they were considering? But we do know what scenario 3 was. We have part of scenario 3 here, and I am happy to read from scenario 3 of the secret Labor modelling, commissioned by the shadow Treasurer on increasing the base and the rate of the GST, 'Scenario 3, increase the GST rate to 12.5 per cent'. You can see the relief over there that it is not 15. They do not want to talk about 15 today. They are very relieved.

Scenario 3 says, 'increase the GST to 12.5 per cent and broaden the base'. Would that be for food, Member for Watson? What were you intending when you were modelling 'broadening the base' of the GST when you were in government? What did you mean by 'broadening the base'? Did you mean fresh food? Did you mean education? Did you mean health? Did you mean rents? Because here is a document produced by your Treasury, produced out of your government, 'Scenario 3, increase the GST rate to 12.5 per cent and broaden the base'.

This document shows the estimated price impact on households. I am happy to record this for the Australian public, because the Labor Party did not want to have this conversation with the Australian people. The Labor Party held this conversation in secret with Treasury and its ministers but would not release this modelling for the Australian people.

Let's examine the impacts of an increase to 12.5 per cent on fiscal year 2014 to 2015—secret Labor modelling: increase in the rate, increase in the base. The estimated price impact on a two-income household with no children was modelled at $93.90. Would the member for Watson stand at the dispatch box and tell the House what his view in Cabinet was when the impact on a two-income household with no children was $93.90 on every household. Did you discuss compensation arrangements in Cabinet? Did you raise compensation arrangements when you considered scenario 3 when you were in government? The impact on one income household with no children was $69.90 every single week. That is $70 a week, every week, on a one-income household with no children, every single week. Did you in Cabinet raise the fairness or the equity of $70 a week for a one-income household with no children when you and your government proposed an increase in the rate and an increase in the base to 12.5 per cent as part of scenario 3?

Mr Burke interjecting—

Mr HAWKE: The member for Watson is saying they did not propose it and they deny it. I table scenario 3 so the Australian public can have a look at the modelling that was proposed by the then Labor government. Scenario 3 is now permanently in the record of the Australian parliament, as proposed by the then Labor government and the former shadow Treasurer.

The Labor Party comes in here today and says, 'What is the real price impact of the GST?' That is your matter of public importance for today. You know what the real price impact of the increase in the GST is. You know what the real price impact is, Member for Watson, because you modelled it.

What we do not know is what scenario 1 is or scenario 2 is. But you can bet your bottom dollar that 15 per cent figured in scenario 1 or scenario 2. If that is wrong, if I am making an outrageous slur on the member for Watson or the shadow Treasurer, they can come to the dispatch box and correct the record, because I would assert that scenario 1 or scenario 2 of the secret Labor modelling to increase the GST modelled a 15 per cent GST. That is my assertion in this House. Stand at this dispatch box after this and make a personal explanation if I am wrong, member for Watson. Get up and say, 'No, that is outrageous and I never modelled a 15 per cent GST—never, ever.'

It is absolutely pathetic for you to come here today and suggest that this government is doing something to the GST that any reasonable, rational government would not consider doing—looking at the tax mix. As the Prime Minister says day in and day out, in response to every one of these ridiculous questions from the Labor Party: no government would consider altering the GST in isolation. There is no Commonwealth government that would not consider the compensation arrangements for what is a generally regressive tax. There is no government that would not consider the income tax deductions needed to go hand in hand—well, maybe a Labor government. But no coalition government would not consider what other taxes had to be reduced so the overall tax burden came down.

But there is no doubt—and most Australians know—that future Commonwealth governments need to consider the tax mix in Australia. We need to continue to get the tax mix right. We need to control expenditure—absolutely. We need to get control in the growth of expenditure. But we also need to consider the tax mix to ensure that we have an efficient tax system that is fit for purpose in the 21st century. That is the genuine conversation that the Turnbull government is having with the Australian people. We are not closed to options. We are not ruling out the GST. The member for Watson today lectured us against the GST altogether. If you have never done anything to remove a GST at all, or have no idea how to replace that revenue, why would you waste this House's time today? Why would you come in here and lecture us about how bad and how wrong a GST is, especially when you were part of a government that modelled scenario 3 to increase the rate and the base to 12.5 per cent? Although, we do not know all of the details yet.

Finally, in rounding out this MPI which, of course, is a waste of this parliament's time, I just say to the member for Watson: please, do not come into this House and lecture us on housing affordability. Many people in here may not know, but I will never forget that you were a member of the Bob Carr state Labor government. It was the Bob Carr state Labor government that proposed that Sydney was full and that we should put green zones in my electorate and in all other electorates to slow down and stop development completely. That created the largest single bubble in housing in terms of supply and demand in Australia's history. It was deliberately manufactured and created by a state government. It has taken over a decade for the market to even slightly rebalance that decade of undersupply. It was deliberately created by his Labor government. He comes in here and says, 'I've discovered housing affordability. I feel for people who cannot afford their rents.' Well, when you were in the New South Wales Labor government, you could have stood up to Bob Carr and said, 'No, Sydney is not full, and we have something that we need to do about housing supply.'

This MPI is completely a waste of this parliament's time. It is the case that this government is, of course, going to— (Time expired)