NSW to push treasurers on GST increase to meet federal health cuts

Treasurer Gladys Berejiklian is planning further spending cuts and other savings. Photo: Dominic LorrimerNSW Treasurer Gladys Berejiklian will continue the push to increase the GST from 10 to 15 per cent to address a looming health funding gap at a meeting of her state and federal counterparts in Sydney on Friday.
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The meeting with new federal Treasurer Scott Morrison is expected to cover implementing the abolition of the $1000 GST-free threshold for online purchases from overseas and establishment of a national register of foreign ownership of land titles.

Mr Morrison has also placed the recommendations of the Harper review of competition ­policy on the meeting agenda.

The review urged reforms across government sectors including health and education to which Mr Morrison has said he is keen to have the states and territories respond.

It was the cuts to health and education grants unveiled in former Treasurer Joe Hockey’s first budget that prompted NSW Premier Mike Baird to raise the prospect of increasing the GST to 15 per cent.

Mr Baird proposed the increase at a meeting of state and federal leaders in July to cover an estimated $35 billion national health funding shortfall by 2030.

He proposed that there would be no broadening of the GST base to include fresh food or education.

Ms Berejiklian told Fairfax Media that she looked forward to working with Mr Morrison and that state and territory treasurers “have a once in a generation opportunity to modernise the Federation”.

“As far as NSW is concerned, our focus remains on addressing the looming fiscal gap which hits our Budget from 2017-18,” she said.

“All options should remain on the table as we work constructively with our State and Federal counterparts on addressing our shared funding needs.

“NSW will continue to argue for the GST rate to be increased to 15 per cent with compensation for households with incomes of $100,000 or less.”

Ms Berejiklian also welcomed Mr Morrison’s focus on the Harper review recommendations.

“NSW welcomes the renewed focus on productivity enhancing reform,” he said.

“Promoting effective competition will be a critical aspect of this reform.”

At a meeting in August, ‘s treasurers agreed to impose the GST on all goods bought online from overseas from July 1, 2017.

The treasurers are also likely to discuss details of a proposed national register of foreign ownership of land titles to be administered by the Commonwealth, including the cost to states of gathering the data.

The NSW budget surplus for last financial year has grown to a record $2.9 billion, according to the total state sector accounts released on Thursday.

The June budget estimated the 2014-15 surplus at $2.1 billion, but Ms Berejiklian said it had increased by $823 million.

This was largely due to one-off items including higher than expected distributions from managed investments and Commonwealth payments, she said.