Page 1074 - Week 04 - Wednesday, 16 March 2005

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At this point in time I am not standing by the federal Treasury’s estimates of GST at all. We do our best, on the basis of the information we can get from the commonwealth. As I said, the level of cooperation is probably not as good as it might be. And that might be just born of the fact that Treasury does not want to be caught out. Why help out eight Labor states and territories with a bit of information that might prove to be incorrect? So they hold it close to their chests. There is no way known, unless I somehow forget totally the incident, that I actually said, “I stand by GST forward estimates that are carried out by federal Treasury.”

What we have heard in recent times is the federal Treasurer and other ministers, but particularly the federal Treasurer, talking about what the states should do with all this GST money. A lot of what has happened in the last fortnight and what has been discussed in the media in the last fortnight, quite clearly, is a smokescreen the Treasurer has put up, because pre-election interest rates and impending interest rate changes under a possible Labor government were used as a fear tactic in an election.

We also saw the federal government spend something like $6 billion in a pre-election spendathon, which many economic commentators have assessed has contributed to inflationary pressures. Those inflationary pressures have contributed to an interest rate increase. And that is what the federal government should be held accountable for. Costello is throwing out all these extra little hand grenades in relation to what the states ought to do and what he is going to do with the states.

He was even misrepresenting, as late as yesterday, the contents of the intergovernmental agreement associated with the GST in making the claim that the states made a commitment that they are now not going to honour. That is not the case. That is totally incorrect. In fact, if anybody ratted on the GST agreement, it is the federal government. They did so in relation to the fuel excise; they threatened to do so in relation to the tobacco excise. Certainly all the manoeuvrings that are occurring with the federal Treasurer and with his other federal ministers are about changing the face of the agreement that was put in place between the commonwealth and the states. All the states have agreed with and lived by the letter of the intergovernmental agreement and the federal Treasurer is trying to change and re-write that agreement.

MR MULCAHY: I have a supplementary question. Can the Treasurer explain to the Assembly the basis on which the Acting Treasurer last week advised the Assembly that “the payments to the states as a result of the reduced payments of GST by the commonwealth will be less”? Is this advice from the ACT Treasury, federal Treasury or some other source?

MR QUINLAN: I don’t think I should be answering what was in the mind of the Chief Minister, but let me say that there is a concern held by many of us that, as we enter into what looks like being a softening of the economy, the growth tax—because it is exactly that, a growth tax—could possibly become a contraction tax. I have not got the figures in front of me, but a large slice of the GST arises out of retail sales. Retail sales over the last three or four years have been at record levels. I don’t think any of us here are predicting that those retail sales will continue to grow at those levels. In fact, we would be concerned with the effect of interest rate changes on home mortgages, generated by the federal government, generated by $6 billion of spending before a federal election. We

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