School visit, GST revenue/States, media laws

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Balance of Payments, Portfolio responsibilities, company profits
November 29, 2001
Interest rate cuts, economy, banks
December 5, 2001
Balance of Payments, Portfolio responsibilities, company profits
November 29, 2001
Interest rate cuts, economy, banks
December 5, 2001

School visit, GST revenue/States, media laws


Doorstop Interview
St Cecilia’s School

Glen Iris
Friday, 30 November 2001


SUBJECTS: school visit; GST revenue/States; media laws


That was quite a grilling you copped. How does that compare to the Press Gallery?


I think the grilling you get from Grade 5 and 6 at primary school is tougher

than the Press Gallery, and they really search out on those questions, and they

do a pretty good job. I think there is probably a few budding television reporters

that we saw down there, today.


You had to think long and hard about what the best thing is about being Treasurer?


Yes. It is a question I have not been asked before so I had to think long and

hard. But the best thing, I think, is when you can cut taxes, and cutting income

taxes, and capital gains tax,

and company tax as part of the New Tax system, I think was one of things that

has put the economy in much better shape than would have been the case otherwise.


There are three State Governments who have come together this morning to announce

a review of their own into the subsidies they say they provide for the other

States. What is your reaction to that?


Well, the States are perfectly entitled to look at the methodology. The Commonwealth

view has always been that, whatever the methodology, it has to be agreed between

all of the States. This is an argument of State against State, and the methodology

has to be agreed between all of the States. And if they can come to an agreement

on a new formula for the Grants Commission, we would follow the Grants Commission,

as we always have. But let me make this point, what you are now seeing is an

argument between Labor States, on who should get a larger share of GST revenue.

That is what is going on here. All GST revenue goes to the States. And now the

Labor States are arguing amongst themselves about who should get a larger share

of GST. I have never seen a State Government yet that was interested in Rollback.

What the States are actually interested in, is, getting a share of the growth

revenue of the GST. And that is only fair because the GST was put in place to

properly fund State services, like health and education. And the argument between

the States can only be settled by unanimous agreement.


Do you think those three States have a point?


Well, I am in the position where, where I see an argument of State against

State, I can only follow the independent arbiter, which is the Grants Commission.

But if the States, as between themselves, want to change the methodology, and

that leads to a different outcome, we will follow the decision of the arbiter.

It is not the Commonwealth that decides this, it is the independent Grants Commission

acting on the unanimous methodology.


So you don’t think that this review would be a waste of money at all, you think

it is worthwhile?


Well, it, unless you can get unanimous agreement amongst the States, it is

unlikely to lead to any changes. So, if I were the State Government, I would

start off by seeking agreement with the other States. You have got to get the

agreement of the other States, because this methodology has to be unanimous.

It is then given to the independent umpire, the Commonwealth Grants Commission,

and the Commonwealth Government then follows that outcome. But you have to get

unanimous agreement. If they have no prospect of getting unanimous agreement,

if they are not seeking unanimous agreement, then it will just become another

political football which will not lead anywhere.


So you are making yourself out to be nothing more than an observer in this



The Commonwealth does two things. It pays all GST to the States, and it follows

the decision of the independent Commonwealth Grants Commission on what shares

they could get. From the Commonwealth’s point of view, we make available the

total GST pool and we follow the umpires decision on allocating the shares as

between the States. It is up to the States themselves to come to an agreement

on how they want the umpire to divvy it up, but it has to be the unanimous agreement.

We will follow it, but it has to be unanimous agreement amongst the States.


Just on another quick issue, the, are you encouraged by the Democrats indicating

that they are prepared to look at media laws?


I think the Government’s position, is, we think Australia’s media laws need

to modernised and we can change them, substantially reform them, but only if

the Senate passes it. Now, as you know, the Senate is under the control of the

Labor Party and the Democrats. The Labor Party are against reform, then the

only way that will take place, is, if the Democrats vote for it. And I welcome

the fact that the Democrats seem to have an open mind. I think the Democrats

are much more, are thinking much more creatively than the Labor Party. The Labor

Party is just opposed to reform, as far as I can tell. And if the Democrats

have an open mind then we might actually get some progress, yes.

Okay, thanks very much.