I rise to contribute to the matter of public importance before the Senate—namely, the Abbott-Turnbull governments plan to impose a 15 per cent GST. The first point to acknowledge in this debate is that the Abbott-Turnbull government plans to increase the GST after the next election. So the next election will essentially be a referendum on whether the Australian people want to pay more for their food, health care, education, fuel and rent through an increase in the goods and services tax or whether they want the GST to remain at the promised 10 per cent. For the record, I would like the people of Tasmania and other states of Australia to know that the JLN will never support an increase in the rate of the GST—not ever. However, in saying that, I do not want members of the Liberal and National parties to put words in my mouth and suggest that I do not agree with tax reform. I believe in tax reform—indeed, I believe in spending reform—and I have presented to this Senate in the last almost year and a half many new ideas and reforms relating to spending and tax reform.
Why should the government even think about increasing the GST when we could have an FTT, a financial transactions tax, which will target the super-rich and powerful in our society, instead of the poor, disadvantaged and vulnerable, as any amendment to the GST must surely do? Any increase to Australia's GST will hurt Tasmania more on a proportional basis than other states, because every social indicator shows we have more poor and disadvantaged people in Tasmania.
Strangely, a tax reform debate in Australia is being carried out by many high-profile media and politicians, without the inclusion of a financial transactions tax, as part of a range of credible fiscal measures to solve our looming tax revenue and spending crisis. Why are a significant portion of Australia's media and political representatives deliberately avoiding even talking about or mentioning a financial transactions tax? Are vested interests using their commercial, political and media influence to limit a community debate about the introduction of a financial transactions tax in Australia?
Many advanced countries, including most of the European Union, from 2016, will raise revenue from a range of financial transactions taxes. The tax is very flexible and can be as little as 0.001 per cent to 0.1 per cent and, as the name suggests, is levied on a variety of financial transactions. Publicly available reports indicate that an official study by the European Commission suggests that a flat 0.01 per cent tax would raise between 16.4 billion euros and 43.4 billion euros per year, or 0.13 per cent to 0.35 per cent of GDP. If the tax rate is increased to 0.1 per cent, total estimated revenues are between 73.3 billion euros and 433.9 billion euros, or 0.60 per cent to 3.54 per cent of GDP.
JLN will not support an FTT designed to have an adverse impact on Australia's real economy. JLN, like most European Union countries, will oppose an FTT on day-to-day financial activities of average Australian citizens and businesses, such as loans, payments, insurance and deposits. However, it is important to note that a financial transactions tax could be designed to target large national and multinational companies which have been proven to minimise or avoid tax by shifting profits to overseas tax havens and create a fairer, simpler and more efficient Australian tax system.
One of the best indicators that a financial transactions tax would thoughtfully target those who can most afford to pay a fairer share of tax is the reaction of bankers when the subject of a financial transactions tax is brought up in policy conversation in my office. And I can assure you that bringing a banker and a financial transactions tax policy together is like dragging a vampire into sunlight: there is a lot of hissing and wailing. Most bankers look as if they are about to burst into flames and melt into a pile of dust the moment I say that Australia needs a financial transactions tax. There is a similar reaction from most Liberal members of the parliament, but that is to be expected, because they are very similar to bankers and share common blooding-sucking world views. I will always oppose an increase in the GST, because there are better ways of reforming tax and spending.