TUESDAY, 3 NOVEMBER 2015
SUBJECT/S: Liberals Plan to Increase the GST; GST hit to Melbourne Cup; Labor Party
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks everyone for coming along today, my name’s Andrew Leigh, the Shadow Assistant Treasurer. Australians we know are in many places doing it tough. The economy’s going through a rebalancing and many Australian families are working hard to make ends meet. So the last thing they need is a government that's looking to raise the GST or broaden its base.
Today with Melbourne Cup we know that the Government's plans for a high GST could well affect punters directly. A higher GST might mean the GST increases the cost of bets or indeed it might mean that the GST applies on the entire bet rather than just on the bookie’s margin.
Frankly, we know that there's only one thing that Malcolm Turnbull's backing today and that's a rise in the GST.
Happy to take questions.
JOURNALIST: What does the economist in you say thought isn't it a much more efficient way raising money?
LEIGH: Not according to the Government’s own Re:Think tax paper. That said, that if you raise a dollar of GST then you destroy about as much economic activity as if you raise a dollar through income taxes. The Government’s own paper says the GST’s no more efficient than income taxes but it certainly hits lower middle income families much harder.
JOURNALIST: It seems unusual that the ALP would be endorsing a way to keep wagering lower given that the links between betting and especially problem gambling and community issues.
LEIGH: This tax not only going to hit gambling today but it would also hit many other activities that Australians are engaging in, whether it's enjoying a pint with friends, whether it's enjoying a drink - all of those things would be hit by 15 per cent GST. The Coalition keeps on saying they've got concerns for the wellbeing of Australian families. Their only tax plan is to make the cost of living more expensive.
JOURNALIST: But when you're talking about betting, it's going to be more expensive if we make changes to the GST couldn't that a disincentive for people to engage in gambling?
LEIGH: Having a flutter is a part of the first Tuesday in November for millions of Australians and the last thing they need is Malcolm Turnbull looking to make this part of life more expensive as if so many other things that are effected by the GST.
JOURNALIST: It’s a bit of a dull argument isn't it Dr Leigh if you're just going to run a scare campaign rather than offering up an alternative.
LEIGH: Labor's certainly put alternatives on the table. We've talked about the fair taxation of multinationals. We've pointed out that our superannuation taxes aren’t fair and they aren’t sustainable. Labor's put serious tax plans on the table that raise revenue in a fair manner, unlike the Government’s tax plan which really seems to come back entirely just to raising the GST.
JOURNALIST: When the Henry tax paper came out Wayne Swan and others were critical of the response of the Opposition of not offering their own alternative and ruling out many of the recommendations. Where does Labor stand in terms of its response to the tax white paper in any tax package that the federal government may come up with?
LEIGH: Labor's engaged constructively in the tax debate indeed in the first half of this election term, this political term saw us bringing down our own multinational tax package. We did that because we saw the Government failing to act so we put together a plan grounded in work of the OECD, costed by the Parliamentary Budget Office that added $7 billion to the Budget bottom line over the decade. Labor's been rolling out our own tax ideas which are fair and sustainable. We just wish that this government, when it comes to new tax ideas, wouldn’t first think about slugging low and middle income households
JOURNALIST: If Malcolm Turnbull wins a mandate at the election for an increased GST would Labor oppose it or would you respect the mandate?
LEIGH: Well I'm not going to go into the hypotheticals beyond the next election. Labor's going to be arguing in a rational and considered way that raising the GST or extending its base wouldn't be an equitable move and it wouldn't be an efficient move. We think that's bad tax reform, if indeed you can call a simple tax increase reform.
JOURNALIST: Can I ask you about WA Labor. Gary Gray's being hunted by a [inaudible] of left wing unions, what do you think of - sorry, - do you think he's deserving of some protection by the national executive?
LEIGH: Western Australian Labor will make their own decisions, but Gary is a great policy contributor to our party. Somebody who understands the resources sector probably better than anyone else in the Parliament, and somebody who's a constant source of wisdom and ideas for the Parliamentary Caucus.
JOURNALIST: But isn't this part of the point, that because he's seen as close to the resources sector, it's because he's seen as close to business and understanding it that he's actually been targeted by the left. What does that say about your party?
LEIGH: Matters of Western Australian pre-selections are an issue for WA Labor. All I can speak to is Gary's calibre and I’ve done that for you.
JOURNALIST: Senator Ian MacDonald says he doesn't support increasing the GST but would like to see the base broadened. If there must be some change to the tax do you think that that is possibly a more sensible idea than increasing the GST to 15 per cent?
LEIGH: Well it's interesting isn't it; when people talk about base broadening that they talk about it in these very general terms. They rarely come out and say that they think the GST should apply to fees you pay to go to a paediatrician, to wheelchairs, to childcare fees or to school fees. If the Government wants to make the case for putting the GST on those specific items then they need to make that to the Australia people. They need to explain to the Australian people why their best tax idea isn't supporting Labor's multinational tax plan, but instead is slugging low and middle income households.
JOURNALIST: The Government's not talking about a tax increase in isolation, they're talking about changing the tax mix and keeping the tax revenue as it is, you know the tax to GDP ratio. Is there a problem with that? Do you think the tax system could be made more efficient by increasing some and lowering others and moving it all around, or do you need more tax revenue?
LEIGH: Labor's certainly supported base broadening in the past: if you look at the story of the 1980s, to a large extent that's Labor looking at broadening the tax base through the Fringe Benefits Tax and Capital Gains Tax in order that we were then able to use some of that extra revenue to lower the rate. The thing about those reforms, fought by the Coalition as they were, is that they were fair and equitable reforms that left us with a better system. They weren't slugging low and middle income households at a time when consumer and business is decidedly fragile.
JOURNALIST: Who's your tip for the Cup?
LEIGH: I'm a big fan on Snow Sky. I always admire those big weight horses. Thanks everyone.
MEDIA CONTACT: JENNIFER RAYNER 0428 214 856