Thanks, everyone, and the crowded house makes me think that it must have been a rather more important meeting of COAG than usual and, indeed, it has been a very important meeting of COAG.

 

We had our COAG meeting this morning, obviously, but yesterday we had the historic COAG Leaders’ Retreat. As far as I’m aware, there’s never before been a COAG leaders’ retreat and it was important that we meet in a rather different context than usual because we were considering fundamental issues, basic questions about how our federation works and how our federation can work better – basic questions about the fundamental roles and responsibilities of the Commonwealth, the states and the territories and local government. Obviously, we have a good federation. The fact that Australia has been one of the most extraordinary and successful countries on earth since 1901 testifies to the fundamental strengths of our Constitution, the fundamental strengths of our federation, but just because we have a good federation doesn't mean it can't work better. Obviously, we have very good schools and hospitals. If you're an Australian and you're overseas and you get sick, the first thing you want to do is get back to Australia because our health system works extremely well. But just because we have very good schools and very good hospitals is no reason not to try to make them work better, particularly given the pressures on our health system in particular as a result of the ageing of our population.

 

Everything we were talking about yesterday at the historic retreat is about making our system work better.

 

It's about delivering better services – better schools, better hospitals, better preschools, better TAFE – so that we are a stronger and more successful country for the medium and long-term. That's what it's all about and, of course, if we do have better schools and better TAFEs and better hospitals, we will have a stronger economy and if we do have a stronger economy, we will be able to afford even better services. That's the virtuous circle that we want to create here.

 

Obviously, we did talk about the revenue pressures that all governments are facing. Every one of us is facing fiscal pressures. The Commonwealth is perhaps facing the strongest fiscal pressures of all just now with a $40 billion deficit. The states all have pressures, some of the states are actually in modest surplus, but we all face pressures now and down the track.

 

All of the changes that we have put on the table, including possible tax changes, are about making our system work better. They're about making our system more efficient and the point I want to make is that we are at the start of a process, not at the end of a process. Yes, we are ambitious for better outcomes, yes, we want our country at every level – Commonwealth, states, territories and local governments – to be the best we possibly can be, but we're at the start of a process, not at the end of it.

 

Today, we moved from the fundamental questions considered yesterday to immediate practical problems.

 

We started the day with a counter-terrorism briefing from the National Counter-Terrorism Coordinator, Greg Moriarty. We then heard from the Office of National Assessments, from ASIO and from the Australian Federal Police. The one matter that I would particularly draw your attention to is the flagged change in the public alert levels. At the moment, the terrorist alert levels are Extreme, High, Medium and Low and there's a bit of interpretation involved in them. Subject to community consultation, we are proposing later in the year to move to a new system of terrorism threat levels – Certain, Expected, Probable, Possible and Not Expected – which I think will be much easier for the public to understand.

 

We then had a presentation from our Ice Taskforce led by Ken Lay, the former Victorian Police Commissioner. There were a number of issues that were flagged. Perhaps the most important, I think, is the work that we are continuing to do on unexplained wealth, because if we're serious about tackling the dreadful scourge of ice, we've got to attack the money trail and that means that we need unexplained wealth legislation.

 

Finally, Ken Lay, Rosie Batty and other members of our domestic violence taskforce addressed us on this vital subject. The one place where people ought to feel absolutely safe is their home and yet, sadly, for far too many women and children in Australia right now, the home is not a place of refuge; the home is a place of persecution. We considered their preliminary report and the outcome of the preliminary report will be a $30 million national campaign to tackle some of the problems which are already apparent. I guess the most disturbing element in the findings so far is that up to 25 per cent of young males, I regret to say, think it is acceptable under some circumstances to use violence against women. Now, government at every level obviously has a role here, but in the end, what is required here is a change of heart by men in particular. Fathers have got to say to sons that it's just not on to raise your hand against a woman. Mates have got to say to mates that it's just not on to raise your hand against a woman or to tell that appalling sexist joke that has just been flagged. It's up to us as men to change so that everyone can live better in what should be the best country in the world.

 

Finally, let me just say that it really has been a great spirit over the last two days. Obviously, we all represent different jurisdictions, we represent different political parties, but we are all first and foremost Australians. I think all of us want to think of ourselves as patriots, and as Australians and as patriots, we want our country at every level to work better. We want all of us to be the best we possibly can be and that was the spirit in which all of the discussions over the last two days were held. I want to thank my friends and colleagues here at this table for approaching it in this way. We have been focussed not on picking fights but on solving problems and I hope that amidst all the static of public life, amidst all the alarms and excursions of the day, that the people of Australia can feel just a little bit reassured that there are times when we can put politics as usual to one side and focus on the big issues facing our country.

 

PREMIER BAIRD:

 

Thanks, Prime Minister. A couple of quick points just reinforcing at the start the Prime Minister's words. I've been involved in a number of COAGs over the past few years, but there's no doubt that what we saw over the past 24 hours was people putting down their political badges and taking up the challenges that we are facing. It was done in a constructive spirit and one that we're all determined to do, which is to meet the challenges, together with some of the opportunities we have, through this federation process.

 

Importantly, the challenge of funding is front and centre as part of this. Part of what we have to do is to have difficult discussions. We have to confront what the trends and the numbers are telling us and it's very clear, in terms of the fiscal pressures, they are very significant over the next 15 years predominantly made up of health and a lot of discussion was held around that. Clearly, we can do things in terms of efficiencies and there was a lot of discussion around that. A number of important measures and work will be done over coming weeks and months to look at how we can do that – improve the efficiency of the system – but on current projections, there is undoubtedly a requirement for some revenue. So, we'll be undertaking work both looking at the GST and the Medicare levy in detail with various options for this group to consider in coming weeks and months. So, an important stream that needs to be done. Obviously, a step forward in terms of the online threshold – that effectively is bringing the current tax system into the modern age. It has been spoken about a lot over the last couple of years, but the agreement in-principle today is very important because we can now take that report forward.

 

I will note in terms of this morning just one quick thing and it's supporting and, in particular, applauding Rosie Batty for her work. I think she has taken domestic violence from something that is not really spoken about to right at the centre of our national conversation and it is something that holds this nation in great stead. We are absolutely delighted to support her work and her initiative to ensure that it is what we are about in this State and across the country is a zero tolerance approach to domestic violence. That's why we're proud, as she asked states today, to ask domestic violence to be a compulsory part of local curriculums and it will be here in New South Wales. So, New South Wales will be starting that from term one next year. So, proud to support that.

 

PREMIER BARNETT:

 

Thank you, Prime Minister. Obviously, from a West Australian point of view, I am pleased that there is going to be a more broad-ranging examination of the GST. I think that is necessary for a whole range of reasons.

 

I'd also just like to say I think it hasn't got much attention, but the agreement to have a fundamental look at our system of training in Australia, I think is overdue and has great implications for the future. There is no doubt the industrial structure and, therefore the job structure of Australia is changing rapidly for a whole lot of reasons, not least of which is new technology coming in and the sort of competition we see from Asia and a lot of areas. So, I'm pleased to play my part in that along with probably Victoria. What we did do yesterday is basically give Premiers different roles to lead.

 

I think one of the distinguishing features of this meeting has been that there’s been a higher level of discussion and debate looking at what we should do as a federation in different areas rather than getting down to a more parochial squabble about money. Those issues will come, no doubt, but I think this has been good for the level of debate and discussion.

 

PREMIER HODGMAN:

 

Thanks, Prime Minister, and colleagues. It certainly was, in my view, a very productive and constructive couple of days. The federation's not broken. It can be improved and I think what this gathering over the last two days has shown is that our federation has many great strengths and to bring together all tiers of government, all political parties in such a way, that provided a very positive and constructive outlook at the challenges we are facing, but also the opportunities to improve our nation was demonstrated through our deliberations over the last two days. It's true that we came here collectively to solve problems, not to pick fights and it's true to say that we've well commenced the process to tackling those challenges and finding those solutions and that's our ongoing commitment.

 

From Tasmania's perspective, we welcome the opportunity to participate in those discussions, but also to partner with Victoria to take a leadership role in discussing the reform of our nation and states’ health systems. The health of our constituents – the people of Australia – is a critical issue for governments to tackle. There are massive funding issues we have to contend with, but to provide better healthcare for our citizens is a significant priority for any government and Tasmania will play a lead role in looking at reform in that area.

 

It was also a great opportunity for us to listen to our expert panels on those key areas of national interest that are affecting our constituents, being counter-terrorism and our response to that, also our response to the issue of ice in our communities and family violence, which is an issue of particular interest to me. I've taken responsibility for Tasmania's whole of government response to the issue of family violence. Our discussions and the progress on each of those issues demonstrated a very effective and combined approach by all jurisdictions to tackle those issues. I think the Australian people would be heartened to see an effective and combined response to those matters that will deliver positive outcomes. To hear from those expert panels that they see significant progress in each jurisdiction on those issues I think is something that is heartening to us as a group and should also fill the Australian people with confidence that we now have a federation that in many respects is operating effectively in dealing with those important matters.

 

CHIEF MINISTER GILES:

 

Thanks, Prime Minister, thanks, Will. In the Northern Territory, we're always about trying to deliver good jobs, better services and appreciating the great Territory lifestyle. There's no doubt that in times ahead, continuing with those services is going to be a challenge from a financial point of view and it's also going to be difficult from a structural point of view. So, the opportunity of coming together yesterday was not just about looking at financial relations, it was also about talking on policy initiatives. So, we've been able to come out of those discussions with some early wins such as the GST on online transactions less than $1,000 and that supports retailers, it supports jobs, and I think that's a fantastic outcome, something that we've spoken about for a long period of time. We’re looking at providing a greater level of parity around child care support, and also for housing support, something that will be delivered on soon, but is being worked on unanimously across all jurisdictions and all leaders I think will provide a greater level of services to many Australians and we look forward to seeing how that can be driven forward into the future.

 

I think some of the other leadership through leaders such as Colin who's fought hard for vocational education and training, when you combine that with some of the other work in child care and education, I think you're going to have Australians in the future who'll be able to compete more globally from a job point of view and that's another fantastic outcome.

 

When we come together and talk about federation, it would be remiss of me not to raise the issue of the Northern Territory being a second-class citizen with second-tier status in the nation. So I was very pleased to have support from colleagues at the table that I'm at now to see the Northern Territory strive to become a State by 1st July 2018. I appreciate the support from colleagues around the table. It was a nonpartisan discussion and nonpartisan support, so it was fantastic to see that. There's a lot of work to do now from the Northern Territory point of view as we have three years to work with Territorians to try and drive that agenda forward so that we have equal status on a federation level.

 

Again, I do say thank you, Prime Minister. I think it was an outstanding success yesterday and I look forward to continuing the work.

 

MAYOR PICKARD:

 

Thanks, Prime Minister. Can I firstly congratulate the Prime Minister for the leadership that he's demonstrated in convening yesterday's leaders' retreat, indeed, congratulate all Premiers’ and Chief Ministers’ for the leadership that they've also displayed in taking a cooperative and collegiate response to the challenges facing Australia's federation. Yesterday, we saw a range of issues explored that in the fullness of time will be discussed in the public forum and I encourage our communities to explore the challenges that our federation face and, indeed, consider the range of options that will be presented to address some of the financial and delivery challenges facing our federation.

 

Can I also encourage, importantly, just as the leaders of COAG have demonstrated a collegiate approach, that the Opposition parties at state, territory and federal level also consider collaboratively and in a collegiate approach the challenges facing our federation.

 

Local government is an important sphere of government, an important player in Australia's federation, in the delivery of services and important infrastructure and, indeed, we'll continue to play a constructive role in this important debate for our community.

 

Today, three important issues were explored, indeed, the scourge of ice, the threat of terror and the unacceptable level of domestic violence and local government stands shoulder-to-shoulder with both state, territory and federal government to ensure we can play whatever role we can to address these challenging issues in today's society.

 

PREMIER WEATHERILL:

 

Well, what distinguished the gathering over the last few days was a few things.

 

One was the honesty of the communication we made with the people of Australia. We're facing many challenges in this nation, not the least are the challenges to fund basic services, and we levelled with the people of Australia about the fact that the services that they want are not able to be funded with the money that we raise and there's quite a large gap between those two things and we have to work together to actually find a way of bridging that gap. So, that's the first thing that's happened and we've also been very honest about the fact that that involves raising more revenue and, inevitably, that means looking at increasing some taxes which is not usually the sorts of things that politicians like talking about. But that's what we did talk about and we've committed to continue talking about them.

 

The other thing I think that distinguished this meeting was the courage of the ideas that were put on the table and if we're able to progress them to success, some of the ideas that we put on the table here are incredibly bold and offer massive opportunities for reform of our federation for the benefit of our citizens. Just consider some of the things that we've talked about. We're talking about the possibility of actually extending Medicare to our hospital systems. Now it's not agreed yet and there's a lot of work to be done, but if we're able to achieve that and do it on the basis that there isn't an incentive for one side that's running the primary health system, another side that's running the public hospital system to actually cost shift to each other, we could run a more efficient system, but also a better system for patients and people looking to get their health care needs met.

 

We've also talked about the possibility of actually creating a whole new approach to our education system, to actually focus on the early years, to actually intervene early to make sure that children get the best possible start in life. We've also talked about our schooling system and the touchstone for improvements there is going to be the quality of our teachers and that that is the principal responsibility we have is to focus on that issue to the exclusion of all others because we know that makes the most difference. We've talked about a national approach to vocational education and training, which is a massive change. If we can achieve that and give people the skills they need to participate in the new economy, we'll have done a massive thing for the people of our nation.

 

We've also talked about our housing system, making sure that we can get more people into homes that allow them to live stable and settled lives.

 

All of those things are massive reform agendas and we're committed to working away to see whether we can achieve success in each of those areas.

 

I just want to conclude by making a remark about the collegiality of what we've achieved. This has been the most constructive meeting I've ever been involved in politics over 13 years of going to lots of ministerial council meetings and many COAG meetings.

 

I also want to particularly pick out one of the issues that was raised today, which is the question of violence against women. It's particularly important that there are so many men that are in leadership roles here that have decided to actually put their name to this important issue. The Prime Minister's remarks before were absolutely central to the solution to this issue – as a man, the Prime Minister saying that violence against women is unacceptable and that this involves men seeing themselves differently in the world. That is, men have to understand that they are the central issue in relation to this question of violence against women and that this is utterly unacceptable and that men need to speak to other men about this issue. This is a very powerful statement by the Prime Minister of this country, and I fully support him.

 

PREMIER ANDREWS:

 

Thanks very much, Tony. I might pick up with Jay’s left off and then make a couple of comments about service delivery and some of the reform that we’ve talked about.

 

It's my view and it’s the view of our Government and I think at a national level now, we’ve got a fundamental recognition that bad attitudes towards women mean bad outcomes for women. It's something that many of us would never have thought possible, to have a national debate and then to have national agreement on that issue. I want to congratulate colleagues, I want to congratulate the Prime Minister and Ken Lay and Rosie Batty and the work that they've done. I think we’re very close now to having a true national plan that will save lives and that's very worthy work. Of course, states and territories will continue their work, in Victoria we’ve got a royal commission that's on at the moment and we hope to be able to inform that national consensus and to feed into the national momentum to keep women and their children safe in that place, as the Prime Minister says, that should be a sanctuary. Your home should be the safest place.

 

In broad terms, can I just make a couple of quick comments. I hope that those these last two days we've shown to the Australian people that we can actually put them first, that we can not bicker and quarrel and argue about things. We can have a debate where you need to have a debate about important issues, but we can put the services that define their quality of life, the services that are so important to the type of nation we are, we can put those things first.

 

I'm very excited to be able to play a role in leading the development and, again, as Jay said, there’s a long way to go, but the notion of having Medicare a single health system, not separate services that don't act as a single system. Instead of having different parts of the health system competing against each other where good outcomes for the patient are often the last thing we actually think about. The notion of a single health system where patients get the right care in the right place at the lowest cost, that's real reform both in terms of health but it's also a significant economic reform for our nation as well.

 

I'm very pleased today to have played our small part as well in taking action on ice and, of course, our ever vigilant approach to keeping the Australian community safe through the counter-terrorism work that we've done.

 

A positive meeting, a meeting where hopefully we've shown the Australian people that we can put them and their interests first and not be all about ourselves. I think that's a really important start and the reform, the work that will be done over the coming weeks and months I’m sure will lead to better services and better outcomes.

 

PREMIER PALASZCZUK:

 

Thanks, Prime Minister. I think what we've seen over the last couple of days is that our leaders can come together to talk about issues that have a huge impact on Australian people.

 

When we're talking about tax reform there is a fundamental conversation that needs to be had and that is with the Australian people and any reform in this direction must have the mandate from the Australian people to do so. We already know that household budgets are stretched to the limit, and that's why a range of options were on the table and more work will be done. I personally do not support an increase in the GST, but put on an option there about increasing the Medicare Levy. But we were able to have a full and frank debate, keep both options there for further work to happen.

 

There is nothing more important than health – health and our service delivery across our nation. Families demand it, they demand to know that they have the best quality healthcare system that they can access. So we know that there are an ageing population out there, that is going to rely more and more on our services and we need to fund that gap over the years with growth which is going to dramatically increase. So, at least we are recognising as a nation that health is a number one issue out there. Chronic diseases, diabetes, dementia, Alzheimer's, these are issues that we are grappling with and we can put amounts of money into each of these programmes, but unless we talk about these issues nationally our people will fall through the cracks and they won't get the full support they need.

 

Another fundamental issue is education. I'm passionate about making sure that we have a modern education and vocational training system to equip young people with the jobs for the future. We know that there are emerging industries and technologies out there and if we are going to keep up with the rest of the world we must start at home. That means looking at the way we teach STEM in our schools, giving the teachers the extra support that they need, looking at coding, looking at robotics. This is where the future lies and we must grapple this with both hands because if we don't address it now we will not have the skills for the future.

 

Finally, I just want to make a comment about domestic violence. It's good to see that men are showing leadership, but it must start early. The way people regard women starts at an early age. Respect, equality, these are fundamental issues that ingrained in young people and will stay with them for the rest of their lives. Violence is unacceptable. But if we are going to change culture and habits, we must get in there early and provide the services early. Women must also have the courage to stand up and have a strong voice and be able to seek the help that they need. That's why I want to thank Rosie Batty, because at last COAG I had a detailed with her about the need for specialised DV courts, and my government is implementing a specialised domestic violence court with wrap around support services, 14 extra lawyers out there to help women going through the system, providing that extra care and attention, more domestic violence services so they can have 72 hour family support and care. And also I want to commend the Prime Minister for a national campaign, because we must have a national campaign to change attitudes. When you change attitudes you change culture and we can change the nation that we live in.

 

CHIEF MINISTER BARR:

 

Thank you, Prime Minister.

 

My colleagues have very eloquently outlined the range of challenges that our nation faces. We've also heard some very innovative potential solutions. So to the extent that there's now agreement on the problems that we face within our federation that we need to raise more revenue, taxes are going to have to increase. Let's ensure though that these taxes are fair, that they're levied efficiently and that they contribute to economic growth in our country.

 

Let's also be clear that if we are to maintain the level of services that we provide across Australia’s states and territories that we will need to raise revenue. The fact that we have agreement on that across the political divide as a result of the last two days means by any measure this retreat and COAG has been a success.

 

We now need to go away and look at the detail of the individual proposal that have come forward. What's been so pleasing is that we haven't fallen for the rule-in rule-out games, that we've been prepared to look at a range of different options to solve our nation's challenges.

 

I came to this meeting wanting to secure a long-term funding future for Canberra's schools, Canberra's hospitals. We've got recognition from this meeting that that is a challenge we all face, all levels of government are going to have to contribute to the solution.

 

Reform in this country is alive but I think the challenge for all of us now is to put the good intentions of the last couple of days into practice and achieve real outcomes.

 

We've made an important first step.

 

QUESTION:

 

Prime Minister, are you prepared to take an increase in the GST to the next election?

 

PRIME MINISTER:

 

Well, first of all, let me just defend this Government's record as a tax-cutting government. We've abolished the carbon tax, we’ve abolished the mining tax, we’ve reduced company tax for small businesses, we’ve given small businesses a whole range of additional tax incentives to do better, what they do very well indeed.

 

So, my commitment is to try and ensure that as far as is humanly possible taxes are lower, simpler and fairer. One of the reasons why I was so pleased when Mike Baird put the GST on the table the other day, and other colleagues on both sides of the fence didn't immediately rule it out, is because the GST is one of the relatively more efficient taxes. It is one of the relatively more efficient taxes and as far as I'm concerned, any change in this area has got to be about improving the efficiency of our system, because if the system is more efficient, it will work better, we’ll have more economic growth, and we’ll have more money to invest in the services that we want.

 

QUESTION:

 

Can you increase the GST or Medicare Levy without compensation or tax cuts of some sort? And how does the Federal Government afford that – given the debt and deficit crisis?

 

PRIME MINISTER:

 

What people always want to do in a press conference is take us from the beginning of a process to the possible end of a process and we're at the beginning of a process here. We have said that we need to look again at these things to try to ensure that the system works as well as it possibly can, that we are making our economy as efficient as it possibly can be, so that our prosperity can be maximised and the services that we so very much want can be maintained and improved.

 

So, we're at the beginning of a process. We want to have a well-informed and civil national conversation about all these things and frankly, if we can have a conversation rather than a scare campaign, our country will be so much better off.

 

QUESTION:

 

So what is the timeline for outcomes then? You've spoken about the problems with health and education and revenue and that's been spoken about before this retreat and these talks – so, what's the timeline then for outcomes and when will people actually start to see improvements?

 

PRIME MINISTER:

 

Ok, well, obviously if we're talking about big reshapings of our federation, nothing's going to happen tomorrow or next month, but nevertheless, we do want to push on and pushing on means getting a green paper out in the next month or so, getting a white paper out probably early next year and then dealing in an honest and upfront way with anything that might be proposed. Because in the end if there is to be substantial change here in terms of who does what, if there is to be substantial change here in terms of the tax mix, we need to have something approaching a consensus. We need to have something approaching a consensus because change ought to be durable. That's the other point. Change ought to be durable. If it's change for the better, it should be durable, but it won't be durable unless there's something like a consensus. To achieve something like a consensus on things that can easily be initially quite contentious is going to require a decent conversation with the Australian public and I think we're up for it.

 

QUESTION:

 

Just a question, in fact a double-headed question, I’m afraid. Andrew Barr said at the conclusion of those opening remarks we're going to need to raise more revenue, taxes are going to have to increase and we have agreement on that. Can I just get your comment on that point, without reference to any specific tax, do you agree that taxes have got to increase?

 

And a second question is on Medicare and hospitals. There does seem to be this agreement and I'd be interested in some input from the Premiers on this question, there does seem to be an agreement to use Medicare in hospitals, is that actually putting a greater burden on the Medicare system?

 

PRIME MINISTER:

 

Let's deal with the second part first. I'm a former health minister. I had four years as health minister. It was an extraordinarily satisfying time in my public life. The great thing about being a health minister is that you're dealing with a lot of people who are doing things for the right reasons. There's a high level of vocational commitment in the health system. This is one of the reasons why for all of the issues in our health system, it does work so well. Doctors, nurses, everyone down to the cleaners in the hospitals, they're all very committed to doing the right thing by the people who come into the system.

 

Now, unfortunately, sometimes decisions are made in the health system not for health reasons, but for financial reasons. To give you a classic example, I suspect a lot of the states would like to move some procedures out of public hospitals and into day care centres, but the way the rules have operated makes that rather difficult. So, structural issues get in the way of making the system as efficient as possible.

 

One of the things that I did as a health minister was introduce care plans for people with chronic and complex conditions. It was a very important innovation at the time. A very, very important innovation, but plainly now that they've been around for about eight years, they do need to be looked at again and that's what Sussan Ley is doing – amongst other things – right now in consultation with the AMA, the Pharmacy Guild and a whole lot of other people. Health care plans need to include incentives so that people, particularly people with chronic and complex conditions, can be aligned with practices and there is an incentive for doctors and practices not just to deliver a service and get people out the door, but to keep people out of hospital, to keep people well. It needs to be a wellness system, as well as a sickness system and these are the sorts of things that we will be intensively examining in the weeks and months ahead.

 

I don't want to say where this process will end, it would be wrong of me to pre-empt where this process will end, but I hope that it will give us a much more rational way to run a holistic health system. Plainly if the Commonwealth's contribution to public hospitals looks like it's aligned to the delivery of good services at the best price rather than simply a block grant handed over to a bureaucracy, that would be a big step in the right direction.

 

Now on the first question – look, my focus is on more efficiency. Other people's focus may well be on the revenue pressures. I do want to say that all of us are in a fiscal bind at the moment, and we've got to look at all the options. But, as far as I'm concerned, any changes to any system, whether it be the tax system or indeed the health system, have got to be about making things work better. Making the whole thing more efficient so that in the end our economy is stronger, because without a stronger economy, we will go downhill no matter what other changes we make.

PRIME MINISTER:

 

Well, I want to see a system where taxes are lower, simpler and fairer – that's my objective. That doesn't mean that we can't have changes in the tax mix. There've got to be changes in the tax mix which overall improve the efficiency of our economy and help our systems to work better.

 

QUESTION:

 

But, Prime Minister, if the GST was to be increased and there could be something like a consensus as you put it. Would you be expecting the states to look at things like abolishing stamp duties and remove more inefficient taxes? And, Mike Baird, can you afford to do that?

 

PRIME MINISTER:

 

Well, again, Laura, I know you are doing your job which is to try to generate a headline or a punchy, racy report on the news this evening. But, look, our job is to govern the country as effectively and efficiently as we can. Our job is not to focus on tonight's news or tomorrow's headline, our job is to try to do what is necessary for the long-term best interests of our states, territories, our municipalities and above all else our country. The great thing about the last couple of days is that we have tried to put our political weapons down, we've tried to take our party political and jurisdictional hats off and say we are Australians, how can we make our country better.

 

So, yes, I would like to see, in any consideration of major tax changes, us moving to a much more rational system, and my recollection of the Henry Report is that he pointed out that there is something like 100 taxes that various levels of government impose, but 90 per cent of the revenue is raised by 10 of them. So, if we can in this process – and I'm not saying that we will be able to – but if we can in this process reduce and possibly eliminate a whole range of inefficient taxes so that we can focus on more efficient ones that would surely be a good thing. But I'm just not going to pre-empt the discussion from the federal perspective.

 

PREMIER BAIRD:

 

I think the important point, we’ve started a process. So the preliminary modelling that we did, I have to say I was not only surprised, I was almost shocked at the quantum. So, just on reasonable assumptions, on where we get to in healthcare, it's unbelievable. So, we have this huge fiscal challenge. As the Prime Minister said, the overall objective, let's try and get there on efficiencies. If you can't get there on efficiencies, what are the other options? That's why the options have come forward in relation to the GST, we have to consider it. We have to have this debate on the GST because the requirement for services, that everyone relies on in terms of health care on a daily basis, so critical. We need to be able to provide it not only today but in 15 years' time, and the gap at the moment is unfunded, so we have to look at all options including revenue. Obviously, in terms of any reform and it is not just GST, the Medicare Levy has come forward as well, so not everyone has agreed on what the solution would be.

 

But if in this process there is a capacity and I’ve long advocated that position, that you had an opportunity to reduce some taxes as well – well, that would be a consideration, that could be put as part of this. But the primary focus at the moment has to be on that health funding gap. That's what we've all agreed around this table. That is the primary concern at the moment. Broader tax reform considerations can be considered once we get to a position on what we know exactly that gap is going to be, and what the options are to fix it.

 

QUESTION:

 

Prime Minister, I understand that you are trying to take the public with you with this broad ranging debate, but how can that happen with the mixed messages we hear from Scott Morrison that he’s already ruled out a Medicare Levy even though the leaders here say that it’s still on the table? Joe Hockey didn’t want an increase to tax because that’s not tax reform and you seem to be saying you don't want tax increases, you want more efficiencies. So, how can the public trust all of you here today that you will effectively and efficiently use their taxpayer money?

 

PRIME MINISTER:

 

Because, this is the start of the conversation, and as far as the Commonwealth is concerned, as far as this Government is concerned, I think we have demonstrated tax-cutting credentials by abolishing the mining tax, abolishing the carbon tax, and despite the difficult fiscal circumstances that we face, reducing company tax and other taxes for small business.

 

I tell you why we've done all of those things, because we think our economy will be much more efficient and effective without those taxes and if we've got higher productivity, if we've got more efficiency, we will have more prosperity and that means we can deliver better services.

 

Now, if you expect final answers today, you will be disappointed and if you mark people down for not having final answers today it will be very difficult for our country to have the kind of conversation that we need to have. But just for once we need to say, "Look, there is good faith here, there is a genuine desire on all our parts to do the right thing by our country." All of us can raise a hue and cry if we choose, and play party politics here, sort of overdramatise things, but what we surely ought to be capable of in this country is the sorts of conversations that we had in the 1980s about some of the reforms that the Hawke and Keating government put through the Parliament. From 1996 onwards, about some of the reforms, including tax reform, that the Howard government put through the Parliament. We need to be capable of stepping back from today's gotcha moment and looking at what is going to be best for our country in the longer term.

 

Sure, as part of this discussion, people might start off in one place and end up over here. People might say something today which down the track might turn out to be not their position. But, what I want to achieve, what I think everyone here wants to achieve, is a stronger and more dynamic economy, better and more effective services and a more rational division of responsibilities between the different levels of government. Now, that surely is a good thing.

 

QUESTION:

 

Premier Barnett, can I ask you has there been any willingness on behalf of you or other state Premiers to consider the GST carve-up as part of these discussions?

 

PREMIER BARNETT:

 

I think one of the things that came through in the discussion was a recognition that if you're going to do anything with the GST then you have to look at everything, and that's the rate, exemptions, online purchasing and the distribution, but at least we're talking about it and I think that's a good step forward.

 

PRIME MINISTER:

 

Now, I know there are some people here who have got planes to catch, so I will take two more questions.

 

QUESTION:

 

Thank you, Prime Minister. A non-tax question, James just asked Premier Barnett on GST. In light of the Northern Territory wanting to get statehood, would that mean the flag would have to change to the Commonwealth Star to [inaudible] different points?

 

PRIME MINISTER:

 

That's a very interesting question. I'm not in favour of changing the flag, I've got to say. Although I have to say if the Commonwealth Star was to be a seven-pointed star rather than a six-pointed star, that's hardly a massive change. I would say that that is an evolution rather than a revolution. But, look, we all acknowledge that this is a very long-standing aspiration on the part of the Territory. It is a bipartisan desire – as I understand it – on the part of Territorians. Look, we are prepared to work with the Territory to see how it can be done. What we certainly don't want is to see a whole lot more politicians, but if it's going to help the Territory for it to move status like this – well, let's work towards it and try to make it happen.

 

Steven, last question.

 

QUESTION:

 

Mr Abbott, one of the stated aims of your Government is to increase workforce participation, if you are considering increasing the Medicare Levy, how are you going to stop that discouraging people from taking on work?

 

PRIME MINISTER:

 

This is a very good question – it’s a very good question. And, look, we've put things on the table for consideration. All of us have preferences, and my preference would certainly be for consideration of GST issues, rather than for consideration of a simple increase in the Medicare Levy, because just increasing taxes is hard to see as reform. Whereas if the tax mix were to be changed in ways that make our economy more efficient and more productive, that increase incentives, don't reduce incentives, that would strike me as something that could well be described as economic reform.

 

The other reason why I was pleased that Mike put this on the table earlier in the week is that the GST is, if you like, a joint exercise by the Commonwealth and the states, whereas the Medicare Levy is simply a Commonwealth tax. So, that's why my preference – I'm not ruling things in, I'm not ruling things out – but my preference would be to consider GST issues rather than Medicare Levy issues. But again I stress, again I stress, we are at the start of a process and this process is going to take some time, whatever the outcome, it is going to take some time because we do need to engage the public, we do need to keep faith with the public, and springing tax changes on an unsuspecting public, however arguable they might be, is not a way to build the kind of trust and confidence that we need to see more of in our democracy.

 

Thank you so much.