GST revenue must not be seen by the Federal Government as a way to offer income tax cuts, the South Australian Government says.
“It’s a breach of the agreement between the Premier and the Prime Minister,” South Australian Treasurer Tom Koutsantonis told 891 ABC Adelaide.
The SA Government said it would not agree to any rise in the GST which then let the Federal Government retreat further on funding its health responsibilities.
“There have been dramatic shortfalls in health and education funding on the basis of the Federal Government’s first budget, where they cut $80 billion of health and education funding over the next 10 years,” Mr Koutsantonis said.
What Treasurer [Joe] Hockey and Finance Minister [Matthias] Cormann are now attempting to do is hijack this debate to fund their own source-revenue tax cuts.
SA Treasurer Tom Koutsantonis
“We’ve got to find money to fill this gap and we’re having a conversation now about the GST.
“What Treasurer [Joe] Hockey and Finance Minister [Matthias] Cormann are now attempting to do is hijack this debate to fund their own source-revenue tax cuts.”
A week ago, Mr Hockey said it was time for some relief for Australians who were being pushed into higher income tax brackets and the Government would go to the next federal election with a tax cut proposal.
“I have no problem with the Federal Government addressing bracket creep – they should – but they should [do] it through their own budget means,” the SA Treasurer said.
“[Mr Hockey and Mr Cormann] have said previously that the GST is a states tax and it goes to fund state-based activity.
“If they want to fund income tax cuts, and they should, they should do that themselves.”
Mr Koutsantonis said South Australia’s budget position was strengthening, at a time when he had outlined a range of state tax cuts.
“We’ve done that in SA, cut tax dramatically [and] we’re on track to deliver a budget surplus this financial year,” he said.
“We are trying to do what we can to try and get our health system under control without compromising service, so we have announced the closing of the Repatriation Hospital.
“No one can question our commitment to getting costs under control, but we won’t ever compromise service.”