GOODS AND SERVICES TAX

Dr CLOSE (Port Adelaide) (14:21): My question is to the Treasurer. Can the Treasurer tell the house about the latest Liberal submission to the GST Distribution Review?

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Workers Rehabilitation, Minister for Defence Industries, Minister for Veterans' Affairs) (14:21): The four Liberal states of New South Wales, Victoria, Queensland and Western Australia have lodged a joint submission with the GST Distribution Review Panel that proposes a new method to distribute GST grants and a change to the definition of horizontal fiscal equalisation. The Liberal submission recommends a—

Ms Chapman interjecting:

The Hon. J.J. SNELLING: Very well. I think we'll find that the panel is receptive to the arguments which I have put to them. The Liberals' submission recommends a population—

Mr PENGILLY: Point of order: the Treasurer is debating a hypothetical issue.

The SPEAKER: I must admit I had some concerns about that question. I do not think he is debating it. However, I will listen to the Treasurer for a few more minutes, and then I will decide if it is not appropriate.

The Hon. J.J. SNELLING: The Liberal submission recommends a population-based distribution system for GST grants with a long-term goal of equal per capita distribution. No wonder those opposite do not want—

Mr PENGILLY: Point of order: I raise it again.

Members interjecting:

The SPEAKER: I can't hear you; just a moment.

Mr PENGILLY: The Treasurer is clearly debating something that is in the federal realm and has got absolutely nothing to do with this state parliament.

Members interjecting:

The SPEAKER: Order!

Members interjecting:

The SPEAKER: Order! Of course, it is GST revenue that we depend on in this in state, so I think it is relevant.

The Hon. J.J. SNELLING: I think it might have a little bit to do with the state, Madam Speaker, despite those opposite being in denial. The position of the big four Liberal governments is that the commonwealth would take responsibility for funding the additional financial assistance required for states like South Australia that have lower fiscal capacity. The equalising amount above equal per capita in 2012-13 GST distribution is around $4 billion. In the long run, this would see the four larger Liberal states better off by $4 billion, while at the same time, under the Liberals' proposal, the commonwealth would be required to provide significant additional funding to smaller states like South Australia. This is unlikely to occur, and even if it did there would be a significant risk that the funding would not be maintained over time. The Liberal proposal undermines horizontal fiscal equalisation.

Mr PENGILLY: Point of order: for the third time, the Treasurer is debating the issue. This is the party that did not want the GST.

Members interjecting:

The SPEAKER: Order! I am not sure how you can say he is debating it. I was concerned about the wording of the question; however, Treasurer, I ask you to wind up.

The Hon. J.J. SNELLING: The Liberal proposal undermines horizontal fiscal equalisation, and South Australia will not support it. To undermine HFE is to begin to unravel the federation of Australian states as we know it today. Any proposal to increase commonwealth funding to the states should be consistent with the current equalisation framework, and Liberal governments should not be seeking to undermine it.

The SPEAKER: Thank you Treasurer, I think you have made your point.

Members interjecting:

The SPEAKER: Order! I will discuss that question with you afterwards.