The Government's "no state worse off" amendments to GST distribution currently being debated in the Senate will cost each and every Australian an additional $360 in extra tax or future debt over the next decade, Liberal Democrats Senator David Leyonhjelm has warned.
"If it was just rearranging the distribution of GST revenues to make it fair, whatever fair might mean, at least it would have no overall financial impact," Senator Leyonhjelm said.
"But this Treasury Laws Amendment Bill is not about a fair share of GST. It is about grabbing $9 billion from taxpayers, over and above their GST payments, and throwing that money to state and territory governments like confetti.
"This bill is nothing more than a massive bribe by the government to get out of a political problem caused by the crazy fiscal relationships between the states and commonwealth."
Senator Leyonhjelm said the proposed system would continue to short-change high-performing states while propping up beggar states such as South Australia and Tasmania that spend more time hugging trees and wind turbines than developing their states.
"These parasitic states will continue to impede development and smother small businesses in red tape, while pouring millions of other states' dollars into bloated local bureaucracies. In South Australia, almost 13 per cent of the entire workforce is now sucking on the state government teat," he said.
"The South Australian and Tasmanian governments love making feel-good statements about cutting greenhouse gas emissions in their own backyard, while expecting extravagant handouts from the heavy-lifting states to compensate for their economic incompetency."
The Liberal Democrats have a fully costed plan to ditch the deeply flawed concept of horizontal fiscal equalisation, which amounts to interstate welfare.
"Under our plan, taxpayers would see their tax bill slashed in half, so they would keep much more of their own hard-earned money," Senator Leyonhjelm said.
"And crucially, each state government would be required to raise all the money they spend, so they would have no one to blame but themselves if they ran out. No more running to the commonwealth for more."
