Goods and Services Tax

The Hon. D.G.E. HOOD (15:01): My question is to the Treasurer. Will the Treasurer outline what impact there would have been on South Australia should the federal government have accepted the Productivity Commission's recommendations with respect to the GST divisions across the states.

The Hon. R.I. LUCAS (Treasurer) (15:01): That is indeed a good question. It's a very important question from the viewpoint of the people of South Australia. The South Australian community, the South Australian parliament and the South Australian government were looking down the barrel of calamitous circumstances if the federal government had supported and sought to implement the recommendations of the Productivity Commission in relation to the distribution of the GST.

I think the figures that have been quoted in the paper this morning were—in terms of their final recommendations, the federal government has outlined that it would have cost South Australia $3.9 billion over an eight-year period. Certainly on the previous information on the penultimate report, or their draft report, the impact in one particular financial year was over $500 million a year. That would have been, indeed, calamitous for South Australia. That's $500 million a year that we currently spend on schools, hospitals, child protection services and a range of services right across the board that we could not have afforded to have lost in terms of the state budget. It would have meant, in essence, having to either raise new taxes or increase taxes and charges or further reductions in terms of the provision of services right across the board as a result of such a massive hit to the state finances.

That is why this Liberal government, both in opposition and since election on 17 March, adopted a public position that said we would not support any federal government—Liberal or Labor—that adopted a position that would impose such calamitous circumstances on South Australia. We said we would put the interests of the people of South Australia first before party. We indicated that this was too important an issue for us to sit by quietly and not indicate, both publicly and privately.

Having done that—and I pay tribute to the Premier, the member for Dunstan, who tirelessly, over the last months, both as leader of the opposition, but more particularly now as Premier, has had a series of individual discussions with both the Prime Minister and the federal Treasurer, and also with senior federal ministers based here in South Australia.

It is important, in relation to the impact of these sorts of decisions, that the influence of senior federal ministers, together with the Prime Minister and federal Treasurer, is critical in terms of turning these things around. That is why we are delighted, in terms of the announcement today, that the federal government has rejected the implementation of the Productivity Commission recommendations, because they would have been calamitous for South Australia. We welcome the fact that the Prime Minister has made a promise—

The Hon. K.J. MAHER: On a point of order, Mr President—and I appreciate your rulings to date—it has been quite an extraordinary length of time that the minister has been on his feet.

The PRESIDENT: It has not been extraordinary; I am watching it. It is close to four minutes. The member has made statements that he will hold himself to account. Treasurer, I assume we are getting close.

The Hon. R.I. LUCAS: We welcome the fact the Prime Minister has made a promise to the state—indeed to all states—that no state will be worse off. We have seen the figures that the federal government and the federal Treasury have produced. What will occur over the coming months is that state Treasury offices will now work with federal Treasury offices to assure us as a state government that that is indeed the impact of the deal that has been put.

Can I say in conclusion that we won't be signing any deal, towards the end of this year as is proposed, that is not in the best interests of the people of South Australia.