Lowe backs GST, company tax shake-up
Former Reserve Bank governor Philip Lowe has urged the Albanese government to consider raising and broadening the GST and lowering company taxes as part of a broader overhaul of the taxation system that ensures future generations enjoy higher living standards than their parents.
In a wide-ranging interview with AFR Weekend that also touched on housing, monetary policy and artificial intelligence, Lowe said lifting the 10 per cent GST while encouraging greater investment through cuts to income and company taxes could be 'a sensible reform'.
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The Advertiser
6 hours ago
- The Advertiser
Hunter not a new contributor to national defence industry
Australia faces the most complex strategic circumstances since the end of World War II. That's why it is more important than ever before that we have the right military capabilities. It is essential for deterrence, and it's essential for our national security. The Albanese government has increased defence funding to record levels, and that includes record levels towards acquiring new capabilities for the ADF. This is the biggest peacetime increase in defence spending in Australia's history. In the lead up to the election, even the Greens recognised the importance of defence capability, when they announced a formally costed policy to fund new military programs to make weapons, including missiles, locally. Right here in Australia. We welcome the Greens' support for the government's plans to increase local defence manufacturing as part of creating a future made in Australia. It creates jobs, supports local economies and builds the skills we need to strengthen our sovereign defence industrial base. That's why we have funded the factory at Astra Aerolab in the region, which is expected to generate more than 500 jobs in the construction phase and almost $100 million in economic benefits for our local area. Construction of this factory represents a leap forward for Australia's defence industry that highlights the government's commitment to a future made in Australia. If the Greens stand by their defence policy, they should be getting behind this initiative and backing local manufacturing and the creation of highly skilled, well-paid local jobs. The Hunter has been a significant contributor to our sovereign defence industrial base for decades, and defence supports the jobs of more than 10,000 people in the region. The region is home to a number of dynamic small to medium enterprises that deliver critical components and services to the Australian Defence Force. It's connected to the nation through the east-coast transport corridor, and connected to the world by the Port of Newcastle. With a world-class university, a skilled workforce and an amazing lifestyle, the Hunter Valley's future is brighter than ever before, especially for those in the defence industry. The Hunter is home to an outstanding group of businesses ranging from the largest defence companies to the smallest local suppliers, which support crucial capabilities including the E-7 Wedgetail, the Hawk 127 Lead-in Fighter and the F-35 Joint Strike Fighter. While the Hunter region is rightly proud of the deep expertise of the local aerospace industry, it is far from the only defence industry to be found here. Cardiff company Nupress is already partnering with Kongsberg to make mechanical components for the Naval Strike Missile. In the Hunter, Van Munster Boats produces the Bluebottle uncrewed surface vessel. Bluebottles use solar, wind, and wave energy to ensure persistent intelligence, surveillance and reconnaissance above and below the water. They are already being used by the navy, the Australian Border Force, and Australian Maritime Parks. There have been defence businesses in the airport precinct for many years because it's well located, close to one of our most important air force bases (RAAF Williamtown), meaning it's secure and can be protected. The point is that the establishment of the Kongsberg factory near Newcastle airport is nothing new. It's also important to note that no explosive material will be stored or produced on site. The Greens know this. The missiles will be produced for Australian purposes. The Greens' claim that they will be exported to Israel is a flat-out lie. The Greens know this. Australia has not exported weapons to Israel since the Gaza conflict began, and for at least the past five years. We all want to raise our children in a stable, peaceful, and prosperous environment. If we believe in defending the country, we need to equip our defence force to do so. We welcome a sensible, level-headed conversation about defence industry, national security and local jobs, but we could do without the scare-mongering and fallacies offered by the opportunistic and misleading Greens party. Australia faces the most complex strategic circumstances since the end of World War II. That's why it is more important than ever before that we have the right military capabilities. It is essential for deterrence, and it's essential for our national security. The Albanese government has increased defence funding to record levels, and that includes record levels towards acquiring new capabilities for the ADF. This is the biggest peacetime increase in defence spending in Australia's history. In the lead up to the election, even the Greens recognised the importance of defence capability, when they announced a formally costed policy to fund new military programs to make weapons, including missiles, locally. Right here in Australia. We welcome the Greens' support for the government's plans to increase local defence manufacturing as part of creating a future made in Australia. It creates jobs, supports local economies and builds the skills we need to strengthen our sovereign defence industrial base. That's why we have funded the factory at Astra Aerolab in the region, which is expected to generate more than 500 jobs in the construction phase and almost $100 million in economic benefits for our local area. Construction of this factory represents a leap forward for Australia's defence industry that highlights the government's commitment to a future made in Australia. If the Greens stand by their defence policy, they should be getting behind this initiative and backing local manufacturing and the creation of highly skilled, well-paid local jobs. The Hunter has been a significant contributor to our sovereign defence industrial base for decades, and defence supports the jobs of more than 10,000 people in the region. The region is home to a number of dynamic small to medium enterprises that deliver critical components and services to the Australian Defence Force. It's connected to the nation through the east-coast transport corridor, and connected to the world by the Port of Newcastle. With a world-class university, a skilled workforce and an amazing lifestyle, the Hunter Valley's future is brighter than ever before, especially for those in the defence industry. The Hunter is home to an outstanding group of businesses ranging from the largest defence companies to the smallest local suppliers, which support crucial capabilities including the E-7 Wedgetail, the Hawk 127 Lead-in Fighter and the F-35 Joint Strike Fighter. While the Hunter region is rightly proud of the deep expertise of the local aerospace industry, it is far from the only defence industry to be found here. Cardiff company Nupress is already partnering with Kongsberg to make mechanical components for the Naval Strike Missile. In the Hunter, Van Munster Boats produces the Bluebottle uncrewed surface vessel. Bluebottles use solar, wind, and wave energy to ensure persistent intelligence, surveillance and reconnaissance above and below the water. They are already being used by the navy, the Australian Border Force, and Australian Maritime Parks. There have been defence businesses in the airport precinct for many years because it's well located, close to one of our most important air force bases (RAAF Williamtown), meaning it's secure and can be protected. The point is that the establishment of the Kongsberg factory near Newcastle airport is nothing new. It's also important to note that no explosive material will be stored or produced on site. The Greens know this. The missiles will be produced for Australian purposes. The Greens' claim that they will be exported to Israel is a flat-out lie. The Greens know this. Australia has not exported weapons to Israel since the Gaza conflict began, and for at least the past five years. We all want to raise our children in a stable, peaceful, and prosperous environment. If we believe in defending the country, we need to equip our defence force to do so. We welcome a sensible, level-headed conversation about defence industry, national security and local jobs, but we could do without the scare-mongering and fallacies offered by the opportunistic and misleading Greens party. Australia faces the most complex strategic circumstances since the end of World War II. That's why it is more important than ever before that we have the right military capabilities. It is essential for deterrence, and it's essential for our national security. The Albanese government has increased defence funding to record levels, and that includes record levels towards acquiring new capabilities for the ADF. This is the biggest peacetime increase in defence spending in Australia's history. In the lead up to the election, even the Greens recognised the importance of defence capability, when they announced a formally costed policy to fund new military programs to make weapons, including missiles, locally. Right here in Australia. We welcome the Greens' support for the government's plans to increase local defence manufacturing as part of creating a future made in Australia. It creates jobs, supports local economies and builds the skills we need to strengthen our sovereign defence industrial base. That's why we have funded the factory at Astra Aerolab in the region, which is expected to generate more than 500 jobs in the construction phase and almost $100 million in economic benefits for our local area. Construction of this factory represents a leap forward for Australia's defence industry that highlights the government's commitment to a future made in Australia. If the Greens stand by their defence policy, they should be getting behind this initiative and backing local manufacturing and the creation of highly skilled, well-paid local jobs. The Hunter has been a significant contributor to our sovereign defence industrial base for decades, and defence supports the jobs of more than 10,000 people in the region. The region is home to a number of dynamic small to medium enterprises that deliver critical components and services to the Australian Defence Force. It's connected to the nation through the east-coast transport corridor, and connected to the world by the Port of Newcastle. With a world-class university, a skilled workforce and an amazing lifestyle, the Hunter Valley's future is brighter than ever before, especially for those in the defence industry. The Hunter is home to an outstanding group of businesses ranging from the largest defence companies to the smallest local suppliers, which support crucial capabilities including the E-7 Wedgetail, the Hawk 127 Lead-in Fighter and the F-35 Joint Strike Fighter. While the Hunter region is rightly proud of the deep expertise of the local aerospace industry, it is far from the only defence industry to be found here. Cardiff company Nupress is already partnering with Kongsberg to make mechanical components for the Naval Strike Missile. In the Hunter, Van Munster Boats produces the Bluebottle uncrewed surface vessel. Bluebottles use solar, wind, and wave energy to ensure persistent intelligence, surveillance and reconnaissance above and below the water. They are already being used by the navy, the Australian Border Force, and Australian Maritime Parks. There have been defence businesses in the airport precinct for many years because it's well located, close to one of our most important air force bases (RAAF Williamtown), meaning it's secure and can be protected. The point is that the establishment of the Kongsberg factory near Newcastle airport is nothing new. It's also important to note that no explosive material will be stored or produced on site. The Greens know this. The missiles will be produced for Australian purposes. The Greens' claim that they will be exported to Israel is a flat-out lie. The Greens know this. Australia has not exported weapons to Israel since the Gaza conflict began, and for at least the past five years. We all want to raise our children in a stable, peaceful, and prosperous environment. If we believe in defending the country, we need to equip our defence force to do so. We welcome a sensible, level-headed conversation about defence industry, national security and local jobs, but we could do without the scare-mongering and fallacies offered by the opportunistic and misleading Greens party. Australia faces the most complex strategic circumstances since the end of World War II. That's why it is more important than ever before that we have the right military capabilities. It is essential for deterrence, and it's essential for our national security. The Albanese government has increased defence funding to record levels, and that includes record levels towards acquiring new capabilities for the ADF. This is the biggest peacetime increase in defence spending in Australia's history. In the lead up to the election, even the Greens recognised the importance of defence capability, when they announced a formally costed policy to fund new military programs to make weapons, including missiles, locally. Right here in Australia. We welcome the Greens' support for the government's plans to increase local defence manufacturing as part of creating a future made in Australia. It creates jobs, supports local economies and builds the skills we need to strengthen our sovereign defence industrial base. That's why we have funded the factory at Astra Aerolab in the region, which is expected to generate more than 500 jobs in the construction phase and almost $100 million in economic benefits for our local area. Construction of this factory represents a leap forward for Australia's defence industry that highlights the government's commitment to a future made in Australia. If the Greens stand by their defence policy, they should be getting behind this initiative and backing local manufacturing and the creation of highly skilled, well-paid local jobs. The Hunter has been a significant contributor to our sovereign defence industrial base for decades, and defence supports the jobs of more than 10,000 people in the region. The region is home to a number of dynamic small to medium enterprises that deliver critical components and services to the Australian Defence Force. It's connected to the nation through the east-coast transport corridor, and connected to the world by the Port of Newcastle. With a world-class university, a skilled workforce and an amazing lifestyle, the Hunter Valley's future is brighter than ever before, especially for those in the defence industry. The Hunter is home to an outstanding group of businesses ranging from the largest defence companies to the smallest local suppliers, which support crucial capabilities including the E-7 Wedgetail, the Hawk 127 Lead-in Fighter and the F-35 Joint Strike Fighter. While the Hunter region is rightly proud of the deep expertise of the local aerospace industry, it is far from the only defence industry to be found here. Cardiff company Nupress is already partnering with Kongsberg to make mechanical components for the Naval Strike Missile. In the Hunter, Van Munster Boats produces the Bluebottle uncrewed surface vessel. Bluebottles use solar, wind, and wave energy to ensure persistent intelligence, surveillance and reconnaissance above and below the water. They are already being used by the navy, the Australian Border Force, and Australian Maritime Parks. There have been defence businesses in the airport precinct for many years because it's well located, close to one of our most important air force bases (RAAF Williamtown), meaning it's secure and can be protected. The point is that the establishment of the Kongsberg factory near Newcastle airport is nothing new. It's also important to note that no explosive material will be stored or produced on site. The Greens know this. The missiles will be produced for Australian purposes. The Greens' claim that they will be exported to Israel is a flat-out lie. The Greens know this. Australia has not exported weapons to Israel since the Gaza conflict began, and for at least the past five years. We all want to raise our children in a stable, peaceful, and prosperous environment. If we believe in defending the country, we need to equip our defence force to do so. We welcome a sensible, level-headed conversation about defence industry, national security and local jobs, but we could do without the scare-mongering and fallacies offered by the opportunistic and misleading Greens party.
News.com.au
8 hours ago
- News.com.au
‘Worst policy change': State cashes in on GST carve out
The 'worst policy change in the 21st' century is set to blow out the national budget by $60bn and keep one state in the black for years to come. The goods and services tax (GST) carve up was back in focus this week as state treasurers came out with their budgets. Queensland, NSW, Western Australia, and the ACT all delivered budgets, with one state standing above them all. Mining-rich WA is in the black, with costs tipped to come in at $2.5bn less than predicted spending. The rest, budget deficits. WA Treasurer Rita Saffioti used her speech to focus on the relative strength of the economy compared with other states while warning of an uncertain global outlook. 'This budget is about fortifying WA amid global shocks,' she said. Independent economist Saul Eslake argues that WA has achieved a surplus for the last seven years on the back of soaring GST revenue. 'Between 2016 and 2025, Western Australia essentially had the country by the shorts and they squeezed as hard as they could,' Mr Eslake told NewsWire. 'I call it the worst public policy decision of the 21st century.' So what changed for the WA government to achieve seven years of surplus. WHY IS WA THE LUCKY STATE? Much of WA's success comes back to two changes. The first was a change to the GST in 2018, with Mr Eslake arguing that the then Liberal federal government wanted to appease WA where it held an overwhelming majority of federal seats. Then treasurer Scott Morrison announced a review of Australia's horizontal fiscal equalisation (HFE) system, which determines the distribution of goods and services tax (GST) revenue among states and territories. After a Productivity Commission inquiry, the system changed so that all states and territories received 70c for every dollar of GST raised in 2022-23. That figure increased to 75c a dollar in 2024-25. Before the new agreement, WA's GST share was 30 cents in the dollar. High iron ore prices at the time could have meant WA got just 15.6 cents of every dollar of GST raised. 'So what Morrison did was commission the Productivity Commission to do an inquiry into horizontal fiscal equalisation,' Mr Eslake said. 'The terms of reference for that were written in Mathias Cormann's office. It was a classic example of (fictional TV character) Sir Humphrey Appleby's advice that you never call an inquiry unless you know what it's going to say.' HFE's aim is to ensure that every state and territory should have an equal opportunity to provide public services. The key word is should, as states and territories are free to raise additional revenues how they please as well as fund their own state-based services. 'That principle is they are equalising the fiscal capacity of the states and territories,' Mr Eslake continued. 'And the point of that, it matters far less where you live when it comes to the quality of schooling your kids get, the quality of healthcare that you and your family get, the quality of policy or environment you get.' Mr Eslake used the example of the US, which does not have HFE, meaning different states have varying life outcomes. 'If we didn't have it, then Victorians and NSW people would have much better public services and pay lower taxes, all else being equal, than Tasmanians or South Australians,' Mr Eslake said. 'And I would argue, and traditionally most Australians have accepted, that's something that makes Australia a better and fairer place than America in particular.' The second major change for WA was the rise of China, or as Paul Keating famously said, the state got 'kissed on the a*se by a big Chinese rainbow'. This kissing, Mr Eslake argues, turned WA from being propped up into a donor state. '(In the early 2000s) WA got a bigger share of whatever federal grants were going around than they would have got if it was distributed equal per capita,' he said. 'Because the (Commonwealth) Grants Commission recognised that when gold was fixed at $35 an ounce, and iron ore was only trading at $20 a tonne and they weren't selling much of it, they couldn't raise much money for mineral oil fees, but they had a relatively high cost of providing services.' BUDGET BOTTOM LINE To get other states to support these changes, a no one is worse off provision was added, with the federal government topping up any shortfalls in GST revenues. This policy was also extended until 2029-2030 under the Albanese government. This NOWO provision turns a $9bn budget blow into a $60bn black hole. 'This is the biggest blowout in the cost of any single policy decision ever with the possible exception of the NDIS, which as (economist) Chris Richardson says is at least set up for a noble purpose,' Mr Eslake said. 'It's what is allowing Western Australia to run a budget surplus while everyone else, including the feds, are running a deficit. 'In the longer run, what it will mean is residents of Australia's richest state, WA, will have better public services and lower taxes than people who live in the eastern states, which I say is un-Australian.'
Perth Now
8 hours ago
- Perth Now
‘Un-Australian': GST change set to cost $60bn
The 'worst policy change in the 21st' century is set to blow out the national budget by $60bn and keep one state in the black for years to come. The goods and services tax (GST) carve up was back in focus this week as state treasurers came out with their budgets. Queensland, NSW, Western Australia, and the ACT all delivered budgets, with one state standing above them all. Mining-rich WA is in the black, with costs tipped to come in at $2.5bn less than predicted spending. The rest, budget deficits. Western Australia has cashed in on changing GST rules. NewsWire / Nicholas Eagar Credit: NewsWire WA Treasurer Rita Saffioti used her speech to focus on the relative strength of the economy compared with other states while warning of an uncertain global outlook. 'This budget is about fortifying WA amid global shocks,' she said. Independent economist Saul Eslake argues that WA has achieved a surplus for the last seven years on the back of soaring GST revenue. 'Between 2016 and 2025, Western Australia essentially had the country by the shorts and they squeezed as hard as they could,' Mr Eslake told NewsWire. 'I call it the worst public policy decision of the 21st century.' So what changed for the WA government to achieve seven years of surplus. WHY IS WA THE LUCKY STATE? Much of WA's success comes back to two changes. The first was a change to the GST in 2018, with Mr Eslake arguing that the then Liberal federal government wanted to appease WA where it held an overwhelming majority of federal seats. Then treasurer Scott Morrison announced a review of Australia's horizontal fiscal equalisation (HFE) system, which determines the distribution of goods and services tax (GST) revenue among states and territories. Then treasurer Scott Morrison enacted the GST reforms. NewsWire / Martin Ollman Credit: News Corp Australia After a Productivity Commission inquiry, the system changed so that all states and territories received 70c for every dollar of GST raised in 2022-23. That figure increased to 75c a dollar in the new agreement, WA's GST share was 30 cents in the dollar. High iron ore prices at the time could have meant WA got just 15.6 cents of every dollar of GST raised. 'So what Morrison did was commission the Productivity Commission to do an inquiry into horizontal fiscal equalisation,' Mr Eslake said. 'The terms of reference for that were written in Mathias Cormann's office. It was a classic example of (fictional TV character) Sir Humphrey Appleby's advice that you never call an inquiry unless you know what it's going to say.' HFE's aim is to ensure that every state and territory should have an equal opportunity to provide public services. The key word is should, as states and territories are free to raise additional revenues how they please as well as fund their own state-based services. 'That principle is they are equalising the fiscal capacity of the states and territories,' Mr Eslake continued. 'And the point of that, it matters far less where you live when it comes to the quality of schooling your kids get, the quality of healthcare that you and your family get, the quality of policy or environment you get.' The price of iron ore stayed high. Rebecca Le May Credit: NCA NewsWire Mr Eslake used the example of the US, which does not have HFE, meaning different states have varying life outcomes. 'If we didn't have it, then Victorians and NSW people would have much better public services and pay lower taxes, all else being equal, than Tasmanians or South Australians,' Mr Eslake said. 'And I would argue, and traditionally most Australians have accepted, that's something that makes Australia a better and fairer place than America in particular.' The second major change for WA was the rise of China, or as Paul Keating famously said, the state got 'kissed on the a*se by a big Chinese rainbow'. This kissing, Mr Eslake argues, turned WA from being propped up into a donor state. '(In the early 2000s) WA got a bigger share of whatever federal grants were going around than they would have got if it was distributed equal per capita,' he said. 'Because the (Commonwealth) Grants Commission recognised that when gold was fixed at $35 an ounce, and iron ore was only trading at $20 a tonne and they weren't selling much of it, they couldn't raise much money for mineral oil fees, but they had a relatively high cost of providing services.' NSW used its budget to call out WA's share of GST. NewsWire/ Gaye Gerard Credit: News Corp Australia BUDGET BOTTOM LINE To get other states to support these changes, a no one is worse off provision was added, with the federal government topping up any shortfalls in GST revenues. This policy was also extended until 2029-2030 under the Albanese government. This NOWO provision turns a $9bn budget blow into a $60bn black hole. 'This is the biggest blowout in the cost of any single policy decision ever with the possible exception of the NDIS, which as (economist) Chris Richardson says is at least set up for a noble purpose,' Mr Eslake said. 'It's what is allowing Western Australia to run a budget surplus while everyone else, including the feds, are running a deficit. 'In the longer run, what it will mean is residents of Australia's richest state, WA, will have better public services and lower taxes than people who live in the eastern states, which I say is un-Australian.'
