GOODS AND SERVICES TAX

Ms BEDFORD (Florey) (14:46): My question is to the Treasurer. What are the ramifications for South Australia of the GST Distribution Review Interim Report, in particular the effect on states of a move away from horizontal fiscal equalisation (HFE)?

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Workers Rehabilitation, Minister for Defence Industries, Minister for Veterans' Affairs) (14:46): I thank the member for Florey and acknowledge her long interest in the subject of horizontal fiscal equalisation. The federal government released the interim report on 23 April and one of the most concerning parts of the interim report was the potential investigation as to whether horizontal fiscal equalisation should provide comparable rather than same capacities for states. This could mean distributing GST closer to a per capita share of population rather than taking into consideration among other things the ability for smaller states to provide service levels equal to larger states and the capacity of smaller states to raise their own revenue.

A watered down HFE or per capita share of GST would allow tax havens to be set up in parts of the country that have greater revenue-raising capacity such as the mining rich state of Western Australia. Most significantly, the watering down of HFE would badly impact South Australia, with $1 billion per annum at stake. That is $1 billion every year that we would have to find within our budget to continue to fund our health system, our education sector, police, nurses and other frontline services.

South Australia would not be the only state to lose out if HFE was abandoned. Another state that would lose out would be Tasmania. Knowing how much is at stake, how much South Australia and Tasmania have to lose if we abandon HFE, Will Hodgman, the leader of the Liberal Party in Tasmania, has stood up to his federal counterpart Tony Abbott who said in Perth earlier this week that moving to per capita distribution of GST revenue—

Ms Chapman interjecting:

The SPEAKER: Order!

The Hon. J.J. SNELLING: —'makes a lot of sense'. So, what did Mr Hodgman do when he heard what Mr Abbott—

Mr WILLIAMS: Point of order, Madam Speaker. This is clearly debate.

The Hon. P.F. Conlon interjecting:

Mr WILLIAMS: He is making argument and you know it, Patrick.

The SPEAKER: Order! Thank you, member for MacKillop. I think it depends which side of the fence you sit on, but I will allow the Treasurer to continue. Treasurer, you have one minute 48 seconds left.

The Hon. J.J. SNELLING: Yes, indeed. Mr Hodgman is reported as saying, 'Tony Abbott is wrong to suggest the government should consider distributing the GST on a per capita basis and I have told him so.' Mr Hodgman has put his state before his party and said that Tony Abbott is wrong.

Ms Chapman interjecting:

The SPEAKER: Order! The member for Bragg will leave the chamber for 10 minutes.

The honourable member for Bragg having withdrawn from the chamber:

The Hon. J.J. SNELLING: If only the Leader of the Opposition in this state would have similar courage.

Mr WILLIAMS: Point of order, Madam Speaker. The minister is now entering debate. 'If only the Leader of the Opposition,' he is saying. He is making debate.

The SPEAKER: I would uphold that point of order if I could have heard what he was saying but there was so much noise going on I could not hear what he was saying. Minister, I ask you to wind up your answer and please don't debate.

The Hon. J.J. SNELLING: What I said was if only the Leader of the Opposition in this state would show similar courage.

Mr VAN HOLST PELLEKAAN: Point of order, Madam Speaker. The question was clearly about the Treasurer's opinion—not Will Hodgman's, not Tony Abbott's, not the Leader of the Opposition's—and I ask you to direct him to come back to the question.

The SPEAKER: Thank you, member for Stuart. Again, it is a matter of which side of the fence you sit on. Could you wind up, please, minister. I will uphold that.

Members interjecting:

The SPEAKER: Order!

The Hon. J.J. SNELLING: I am happy to wind up. I can see the opposition are obviously rattled. This government will continue to act in the best interests of South Australia by—

Members interjecting:

The SPEAKER: Order!

The Hon. J.J. SNELLING: —arguing the case for HFE at every opportunity, putting forward our views to the GST Distribution Review Panel.