FED: Harradine raises GST bar

AAP General News (Australia)
04-23-1999
FED: Harradine raises GST bar

By Steve Connolly

CANBERRA, April 23 AAP - Independent Senator Brian Harradine raised the barrier for the GST
by airing fresh concerns about the constitutional validity of the tax legislation today.

Senator Harradine has questioned aspects of the tax bills dealing with how the government
would be able to change the rate of the proposed 10 per cent GST.

The Tasmanian senator rejected government assertions that the GST rate was locked in and
could only be changed with the agreement of the states.

Advice from the parliamentary library, he said, indicated that if certain High Court
decisions were followed then much of the bill dealing with changes to commonwealth/state
relations would be invalid.

Senator Harradine told parliament the GST reforms could be in breach of section 55, which
states that laws imposing taxation should not deal with any other matters.

Assistant Treasurer Rod Kemp rejected Senator Harradine's concerns and said the government
took great efforts to ensure bills were valid.

"The government is mindful of the need to protect bills from constitutional challenge," he
said.

Senator Harradine's heightened concern about the tax reforms, on top of his calls for
greater compensation, highlighted the hard road ahead after the first week of the tax debate.

The early rounds of the GST battle also finished with the Australian Democrats accusing the
government of applying extraordinary pressure to get the complex tax reform legislation passed
by June 30.

The Senate started considering hundreds of amendments to the tax package, and agreed to
extended sitting hours next Tuesday due to Monday's public holiday.

Meanwhile, the federal opposition claimed Prime Minister John Howard had grossly misled the
public by claiming the states would be up to $20 billion better off by 2010 under the GST.

Mr Howard had told Melbourne radio 3AW the states would greatly benefit from the new
system.

"I've been told by the Treasury that by the year 2005 the states will be $2.9 billion
better off than they would have been under the old system, that's the present system, had
continued," Mr Howard said.

"It will grow to about $15-$20 billion, perhaps a bit more, it's a bit hard to estimate."

But opposition treasury spokesman Simon Crean said the only way Mr Howard could get to his
$20 billion figure was to retain one of the taxes that the government said it would abolish.

Mr Crean said the growth tax figure would shrink to $8 billion on reasonable projections by
2010.

AAP sc/mfh/cjh

KEYWORD: TAX NIGHTLEAD

1999 AAP Information Services Pty Limited (AAP) or its Licensors.