Support for Hanson’s original position on GST

The Australian Institute for Progress, based in Queensland, has defended Pauline Hanson’s proposition that GST should be distributed to states on a per capita basis.

Executive Director Graham Young said “The attempt by state politicians to wedge Ms Hanson on this issue is short-sighted, and not in Queensland’s or Australia’s interests.

“The current system rewards bad governance in the least well-governed states of South Australia and Tasmania, and penalises states like Queensland and Western Australia.

“Queensland state politicians of all colours need to take note.

“If GST were distributed on a per capita basis, rather than subject to the black arts of the Commonwealth Grants Commission, which adjusts payments by a range of factors, then Queensland would have been better-off by $2.75 billion over the 5 years to 2014-15.

“This is a higher figure than the $1.6 billion the state treasury thinks Queensland will lose in the next 4 years, and indicates the change is likely to be more or less neutral for Queensland.”

But Mr Young said the various states’ share of revenue is not the only consideration.

“Under the formula the Grants Commission uses, states are penalised when they cut taxes, and they are penalised when revenues like mineral royalties, increase.

“So states that are better managed and tax less than the average, and encourage other forms of revenue, are penalised in favour of states that tax more.

“This is the opposite of how federation is supposed to work.”

Mr Young said that if GST were distributed per capita, Australia would experience faster growth.

“Some of the strongest national economies in the world are federations, and that’s because a properly functioning federation gets the best out of everyone.

“It’s a similar proposition to the way that club sport breeds champions.”

Mr Young said the current CGC system would also have played a hand in the gas shortage that this morning’s AEMO report outlines as it redistributes money from those states prepared to encourage mining to those states who want to pander to inner city Greens and NIMBYs.

For further information contact Graham Young 0411 104 801.