Treasurer Joe Hockey at a press conference at Parliament House in Canberra following his meeting with State and Territory Treasurers in search of a greater slice of the GST pie. Source: News Corp Australia
Opposition Leader Bill Shorten has ridiculed Treasurer Joe Hockey’s war of words with Peter Costello and Western Australia over the GST, citing it as evidence of a government “in disarray’’ with “no Plan B’’ to manage collapsing iron ore prices.
Joe Hockey lashed out at Mr Costello after the former treasurer accused the Abbott government of launching a “debased” tax discussion that could create “poverty traps” and damage the economy.
At a press conference in Sydney, Mr Shorten said the government’s “budget mess, dishonesty and incompetence” were undermining consumer and business confidence.
“It is a complete joke, what we are seeing at the moment. We are seeing former Liberal treasurers attack current Liberal treasurers, you’ve got the states begging for crumbs from the bowl of Joe Hockey and Tony Abbott all because Joe Hockey and Tony Abbott cut $80 billion from state-funded hospitals and schools in their last budget,’’ Mr Shorten said.
“This is a government in disarray. If Peter Costello is right, Joe Hockey is a joke — but Australians stopped laughing a long time ago.”
Mr Shorten said the Coalition had “no plan B” to manage collapsing iron ore prices.
“The transition from the mining sector to the non-mining sector is underway, and experts have been looking at this for two years. And what’s Joe Hockey and Tony Abbott’s plan? They don’t have one,” he said.
The Treasurer, speaking from the New York Stock Exchange early this morning, said he would consider freezing Western Australia’s plummeting GST revenue but demanded Perth commence the “absolutely necessary structural reforms” of privatisation and business deregulation.
Earlier Mr Costello described the government’s commitment to “lower, simpler, fairer” taxes as a “morbid joke”, noting the Coalition had foreshadowed possible tax increases on banks, multinational companies and superannuation accounts.
The senior Howard government minister argued the government should be cutting income taxes to alleviate bracket creep, rather than pushing up taxes.
Mr Hockey said Mr Costello’s analysis was “wrong” and urged him to stop “longing for yesterday”.
“I really wish that I had the tax revenue that Peter Costello had when we were last in government because if we had the same level of tax collections I’d be collecting an extra $25 billion today,” Mr Hockey told Sky News, saying the falling revenues had compounded increased spending under Labor.
“Everyone’s entitled to give free advice and frankly that’s what it’s worth; it’s free advice.
“I would suggest that people stop looking back to what was and focus on the challenges of today and the challenges of tomorrow. No matter who they are, we’ve got to look to the future rather than longing for yesterday.”
Mr Hockey also said it was “certainly” an option to freeze WA’s collapsing GST revenue if the other states agreed.
“I think the other states are putting appropriate pressure on Western Australia to undertake the sort of difficult but absolutely necessary structural reform in the West Australian economy that is necessary for it to continue to strengthen over time,” Mr Hockey said.
“When NSW has just gone through a very tough political fight over the sale of poles and wires, Western Australia still owns its TAB and still owns its poles and wires and at the moment has no intention of going down the road of microeconomic reform that other states have taken.”
“Western Australia has antiquated laws in relation to retail trading hours and in relation to retail. For example they have restrictions on the sale of lights at night time, which creates real problems for lighting suppliers who I think are allowed to sell light bulbs at night but not light fittings.”
In Western Australia, hardware stores are allowed to open before 11am on Sundays if they stock light bulbs. However they are not permitted to sell light fittings until after 11am.
As South Australia threatens to introduce a long-abolished tax on financial transactions to compensate for federal cuts, Mr Hockey conceded “any state is entitled to introduce its own taxes”.
Writing in The Daily Telegraph, Mr Costello urged the Coalition to deal with “a tax problem”.
“High taxes can be unfair taxes when they take away a person’s justly earned income and reduce the reward for effort.
“As people lose benefits and pay higher taxes … this creates a huge disincentive to work. It creates poverty traps. And, it heightens the incentive to ‘hide’ additional income.
“Another thing curiously absent from this “conversation” is any assessment of how these new taxes will affect economic growth and job creation. Taxes reduce economic activity.
“The Abbott government has already increased the top marginal tax rate to its highest level in 25 years. That did nothing for the economy. It made no difference to the budget deficit.”
source:theaustralian.com.au
STUDIO 3 NEWCASTLE AUSTRALIA 