“I had been concerned about our pre-budget message”: Senator Ian Macdonald. Photo: Andrew Meares
A senior Coalition MP has called for the GST to apply to fresh food as rattled colleagues questioned the government’s pre-budget political strategy and admitted they have been hit by a wave of voter anger over the broken promises, new taxes and cuts in federal Treasurer Joe Hockey’s first budget.
Queensland senator Ian Macdonald broke the federal wall of silence on the GST by arguing the consumption tax should be broadened to include fresh goods, which were excluded under a compromise deal hammered out by John Howard and the Democrats in 1999.
”I will never support an increase in the GST but I think we should extend it to what we originally proposed prior to the 1998 election,” he said. ”I could also support states having a smidgen of income tax. If we want them to run schools and education that seems fair.”
A former minister who lost his frontbench spot after the election, Senator Macdonald’s public comments reflect the private views of many in the Coalition party room and will create another political headache for Prime Minister Tony Abbott, who said on Sunday his government had no plans to change the GST.
The Grattan Institute estimated last year broadening the base of the GST to include fresh food, health and education would raise an extra $ 15 billion for the states, though such a change would be politically unpopular.
Mr Howard, former prime minister Malcolm Fraser and former Victorian premier Jeff Kennett have recently backed broadening the GST base while Treasury secretary Martin Parkinson has signalled the need for the base to broaden.
Furious state premiers have lashed the government’s decision to rip $ 80 billion out of health and education over a decade and accused Canberra of trying to force them to make the case for a GST rise.
The comments come a day after a Fairfax Nielsen poll showed the Coalition slumped to trail Labor in the two party-preferred vote by 56 per cent to 44 per cent and as Mr
Abbott and his senior colleagues criss-crossed the country to sell the budget.
Opposition Leader Bill Shorten hammered the Coalition for breaking promises not to introduce or increase taxes, cut education or health funding, change pensions or touch family benefits.
Government MPs were sent text messages by the secretive Coalition Advisory Service on Monday instructing them to argue that Australia ”simply could not go on paying the mortgage on the credit card. No one said it would be easy to fix Labor’s debt and deficit”.
Mr Abbott conceded on Monday some taxes would rise, breaking his election commitment, but said every government that handed down a tough budget suffered a poll hit: ”If you go back to 1996 – the last tough budget – the Howard government, of which I was then a pretty junior member, suffered a massive hit in the polls but it was right and necessary for our country.”
In fact, the Howard government enjoyed a three percentage point rise in its primary vote, to 50 per cent, in the first Newspoll after the 1996 budget, whereas the Abbott government suffered 5 point fall to 35 per cent in the Fairfax Nielsen poll.
One angry backbencher told Fairfax he had warned Mr Abbott about breaking his ”no new taxes” pledge, arguing the electorate had been ”primed” to look for broken promises by the Abbott opposition.
”We saw what that did to Gillard,” the MP said. ”They are living in a fool’s paradise. He hopes the electorate will forget the broken promises but they won’t and I think this puts our election prospects in doubt.
”My view is we needed a tough budget but we have broken our tax promise. We should have copped a bigger deficit. And where does the paid parental leave scheme fit into the narrative about a tough budget?”
Senator Macdonald said he welcomed angry constituents calling him to complain but that ”I had been concerned about our pre-budget message”.
Queensland MP Warren Entsch criticised the government’s pre-budget strategy for ”scaring the bejesus out of everyone, including my mum” but welcomed the tough decisions.
Victorian MP Sharman Stone said it would be difficult to get past the broken promises in the budget but ”we just have to hope for the sake of the country to get past that chorus and look seriously at what the country needs”.
with Heath Aston