Legislative Assembly for the ACT: 1998 Week 9 Hansard (17 November) . . Page.. 2578 ..
MS CARNELL (continuing):
in the last 50 years to our tax system. We have the opportunity to mark the centenary of Federation in 2001 by creating a stronger federation through a set of reforms that will give the States and Territories more budget certainty and flexibility.
Mr Speaker, for as long as I can remember, the States and Territories have been arguing that they need access to a growth revenue that the Commonwealth controls. The tax reform package, as currently proposed by the Commonwealth Government, will deliver exactly that, by providing to the States and Territories all of the revenue from the proposed new goods and services tax, the GST.
In simple terms, it means that once we are through the transitional period there will be more money available to the ACT Government to fund health, education, justice and all the other vital services that we provide to the people of the ACT. As well, it will mean the abolition of a number of regressive State taxes, including financial institutions duty and the bank account debits tax.
Mr Speaker, the States and Territories went into Friday's conference united on a core set of principles that, from our point of view, were critical to this reform process. They were: That the Commonwealth must guarantee that each individual State and Territory would be no worse off under these reforms than if current funding arrangements continued; that this guarantee must cover the transitional period to the new system, this transitional period being as long as it takes for each State and Territory budget to be in an improved position; that, in keeping with this guarantee, the Commonwealth would not cut specific purpose payments to the States and Territories to offset rising GST revenue, which would otherwise defeat the objective of the States and Territories being better off; that the Commonwealth agreed to include in legislation its commitment to allocate all the GST revenue to the States and Territories; and that if elements of the tax package, as announced in August, were significantly amended, there would need to be renegotiation of any agreement between the States and Territories. Mr Speaker, on each of these key issues the Commonwealth agreed.
It was the most productive Premiers Conference that I have attended, because everyone shared the view that Commonwealth-State financial relations needed to be put on a firmer footing and that this tax package presented a clear way forward - yes, Mr Speaker, even Labor States. That is not to say that each State and Territory gained everything that it wanted. Queensland, for example, wanted to enjoy the spoils of the GST two years before any of the other States and went away disappointed that it had been unable to bring seven other jurisdictions around to its point of view. Mr Speaker, I suspect that it will learn.
New South Wales wanted to dispense entirely with the system of equalisation that protects the poorer States and has been at the heart of funding arrangements for the States and Territories for 70 years. Ironically, the greatest conflict at the conference was between these two Labor States. On each of these points they were on their own.