Friday, October 5, 2018

Today by Paddy Manning

GST debate rolls on
Fights over who gets what, and what’s in or out, take decades


There’s progress, there’s slow progress, and then there’s no progress. We’ve scored two out of three this week on the GST. When Scott Morrison, the then treasurer, announced a fix to the GST distribution formula three months ago, it seemed expedient but costly. Now the fix seems to be sinking into the political mire, with hands out everywhere: Victoria and New South Wales are facing imminent elections and have no desire to lose political skin just so the federal government can shore up a few marginal seats in Western Australia. Mark that down as no progress. By contrast, this week state and federal treasurers finally agreed to remove the GST on sanitary pads and tampons – a reform that has been urged since a consumption tax was brought in nearly 20 years ago. Call that slow progress.

WA’s loud and long objections to the existing GST distribution formula are well known: in the wake of the mining boom, the state was getting back 30c per dollar collected. In this excellent feature [$] today, The Australian’s chief WA reporter, Andrew Burrell, explains that Morrison’s reforms would top up payments to all states to ensure they receive a minimum floor of 70c in the dollar, and enshrine that minimum in legislation, rising to 75c from 2024–25. No state was meant to be worse off – everyone was a winner to a greater or lesser degree. The reform was presumed to have the support of the federal Opposition leader, Bill Shorten, who said he was on a “unity ticket” with the government. That bipartisanship may now be unravelling, and Burrell writes that in WA, where the issue is watched most closely, the blame could fall either way: on Labor, for being obstructive, or on the Coalition, for failing to sort this out after five years.

This week Victoria and New South Wales arced up. A slide show presented to Treasurer Josh Frydenberg on Tuesday night, ahead of Wednesday’s treasurers meeting, and obtained by The Daily Telegraph, showed that with house prices softening, and the mining sector recovering, New South Wales could be up to $5.5 billion worse off. (A terrifying graphic showed Queensland would be a $3.2 trillion loser!) Coalition-held New South Wales and Labor-held Victoria are both insisting on legislative guarantees that they won’t be worse off.

On Sky News today, Finance Minister Mathias Cormann declined to commit to a guarantee, maintaining every state would be better off with the additional $9 billion in funding. Then he tried to turn the attack back on Labor, state and federal, accusing the party of standing by a broken system. Expect more argy-bargy as the Morrison government looks for legislative achievements in the lead-up to Christmas, although it is hard to see political mileage in such a dry argument for either side. Will there ever be agreement between the states? Hard to imagine. Real progress would be to abolish them altogether.

The removal of the GST on feminine hygiene products like tampons and pads stands as a real step forward, with an immediate impact on living costs. It’s a textbook case of how real change happens, and it marked the birth of online campaigning. As Labor’s then shadow health minister, Jenny Macklin, explained in a parliamentary debate in March 2000:

“The campaign was not started by a big tampon manufacturer but by an angry Sydney mother, Margaret Morgan – or Maggie, as she is known on the Net. She posted an anti-tampon tax petition on the online mother-child bulletin board and emailed it to all her friends. She told the Australian Media magazine that she was amazed and inspired by the response to her petition. This anti-tampon tax campaign is one of the most remarkable spontaneous grassroots campaigns that I have ever seen. It will go down in history as the first widespread use of information technology by the Australian public to influence the political debate. As Maggie Morgan said: “The reason [Coalition health minister Michael] Wooldridge thought he could dismiss it so cavalierly was that he didn’t understand what was going on with the net. To dismiss it as simply the workings of self-interest shows a lack of awareness of the new technology and how normal people are embracing it.”

Earlier in 2000, Labor senator John Faulkner had tabled a petition with 10,355 signatures, collected in less than a month, calling on the government to make tampons and sanitary pads GST-free. Macklin said it was the largest electronic petition ever tabled in the federal parliament. “The intensity of the protest should be a lesson to the government that Australian women will not be ignored,” she said. “This broken promise – the broken promise that health would be GST-free – will not be forgotten.”

Macklin tried to move a motion against the GST on sanitary products, but it went down. As recently as last year, inexplicably, Labor voted down a similar motion moved by the Greens’ Larissa Waters.

It took 18 years, but finally there was a victory. Margaret Morgan, wherever you are, high fives.

since this morning

Prime Minister Scott Morrison has asked Special Minister of State Alex Hawke to investigate the internet bills of Assistant Treasurer Stuart Robert, after Fairfax Media revealed Robert has been charging taxpayers more than $2000 per month for data use at his Gold Coast home.

The ABC reports that a former forensic investigator at ASIC has called for the big four accounting firms to be brought before the financial services royal commission.

in case you missed it

The AFR’s Phillip Coorey writes that Labor still hasn’t got the measure of everyman Scott Morrison, who is keeping the Liberals together, so it has returned to setting the policy agenda.

The Australian’s Simon Benson writes [$] that Opposition Leader Bill Shorten is worried about Scott Morrison and, having spent the past five years engaged in class-war economics, is now making his first pitch to middle Australia.

The Australian reports [$] that more than $25 million in taxpayer-funded Great Barrier Reef contracts were handed to companies linked to a prominent Liberal National Party donor and his wife while she served on the board of the government agency controlling the funds.

The Guardian reports that former High Court justice Michael Kirby has blasted the Coalition for failing to release the Ruddock review on religious freedom. Kirby warned that secularism is at threat and Australians are right to be “suspicious” that the government has not stated its plans on the issue.

According to a Fairfax Media report, Australia’s new race discrimination commissioner, Chin Leong Tan, sees his role very differently to predecessor Tim Soutphommasane and is not inclined to commentary or advocacy.

Official documents obtained by Fairfax Media show that Australian and South Korean officials have discussed drumming up investment in the controversial Adani mega-mine. The documents appear to contradict claims by the Department of Foreign Affairs and Trade that it has not helped secure finance for the project.

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Paddy Manning

Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Body Count: How Climate Change Is Killing Us, Inside the Greens and Born To Rule: The Unauthorised Biography of Malcolm Turnbull.


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