Coalition Senators' Dissenting Report

1.1        The majority report, either through misunderstanding or misrepresentation, does not accurately reflect the process leading up to the April 2016 COAG meeting.

1.2        At the December 2015 COAG meeting, leaders agreed to "continue investigating a full range of Commonwealth and state tax and revenue sharing options."[1]  

1.3        Following this, the Commonwealth began a process of investigating a broad range of income tax sharing arrangements.

1.4        It was neither Commonwealth nor the states' and territories' intention that the 1 April 2016 meeting would be the final step in this process. On the contrary, the purpose of this meeting was to begin a more detailed discussion with the states and territories around tax and revenue sharing options.

1.5        It was never the government's intention to seek agreement at the April 1 meeting to a specific fully detailed state and territory income tax arrangement.

Had the states and territories been interested in pursuing a more detailed discussion of the concept outlined by the government, an extensive process of modelling, consultation and negotiation around further details would have commenced.

1.6        However, in the immediate lead up to COAG and at the COAG meeting itself, it became clear that the states and territories would prefer that the Federal Government continue to raise income tax and other taxes, and that they continue to spend the revenue.  

1.7        The states and territories expressed no interest in levying taxes themselves if the Commonwealth made room for them to do so.  

In response, the Commonwealth reiterated its position that it has no interest in increasing the overall tax burden.    

1.8        So there was clear resolve from all governments to not increase taxes, and to live within their means.

1.9        Going forward, and recognising and respecting the views of the state and territory leaders, COAG therefore agreed to consider proposals to provide the states with greater autonomy through sharing personal income tax revenues and reducing the number of tied Commonwealth grants to the states.  This process has now commenced.

Senator Cory Bernardi
Deputy Chair
Senator for South Australia

Senator Joanna Lindgren
Senator for Queensland

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