Democrats urged to protect States' interest during GST negotiations

24/5/99
Premier Richard Court has called on the Australian Democrats to give an assurance that the interests of the States and Territories will be protected in ongoing negotiations with the Commonwealth on the tax reform package.
Mr Court said Commonwealth-State financial relations formed a key part of the package, with the States and Territories gaining access to a major growth revenue - a situation currently denied them, particularly as a result of recent High Court decisions.
"Senator Meg Lees and her team need to understand and acknowledge the fact that they are 'horse trading' with State revenues," the Premier said.
"If the Democrats are wanting to change the package - especially the goods and services tax - then they need to ensure that the States and Territories will not be disadvantaged."
It has been estimated, for example, that excluding food from a GST would slash between $3.5 billion and $5 billion from the funds that would have flowed to the States.
"This could put at jeopardy the abolition of a number of State taxes and reduce the level of funds available to the States for the provision of key services such as health and education," Mr Court said.
"Gaining access to a growth tax would be the most significant reform in
Federal-State finances since the Second World War.
"Nine Governments, including the Commonwealth, supported this proposal and signed an Intergovernmental Agreement to give it effect.
"All State and Territory leaders were able to see the long term importance of this reform to the revitalisation of the Federation and put aside party political differences. It is incumbent upon the Australian Democrats to fully take into account the significance of this agreement.
"On a wider scale, the entire Senate has a responsibility to protect and support the States and Territories on this issue - and this can best be achieved by supporting the Commonwealth's tax reform package."

Media contact: Casey Cahill 9222 9475