Baird to push for broader GST

New NSW premier urges mature discussion about tax reform ahead of white paper.

NSW Premier Mike Baird will push for a broadening of the base of the GST, and has previewed a strategy to gain community ­acceptance for the privatisation of electricity assets.

On his first full day as Premier, which included joining the Duke and Duchess of Cambridge as they visited Manly beach, Mr Baird called for the $1000 exemption for online overseas purchases to be lowered, to allow for the broadening of the GST base.

“That has to happen,” he told The Weekend Australian in an ­interview before William and Kate arrived in his northern beaches electorate.

Asked about a further broadening of the base by removing other exemptions, such as food and education, Mr Baird praised Tony Abbott and Joe Hockey for not ruling anything in or out of a tax reform white paper. “I anticipate playing a very constructive role in that process,’’ Mr Baird said. “We need to have a mature discussion on tax reform. Nothing is ruled in or out.”

He added this had to be done in a fair and equitable manner.

“Nothing is going to change out of it unless the federal government decides it’s going to take it to an election,” he said.

Mr Baird said the tax system needed urgent reform, which should involve a re-examination of the roles and responsibilities of state and federal governments. “They do need to go together … look at the roles and responsibilities, and then you look at the tax base and align the revenue,’’ he said. “That’s why I’m so optimistic about those discussions next year.”

Mr Baird indicated he would be willing to give up state government responsibilities if necessary. “I will come to that with an open mind,” he said.

The new Premier said his focus would be on areas where there was duplication between federal and state governments.

“I’m not going to give up anything that’s not in the long-term interest of the state but you can’t be precious about various services and functions if they are being duplicated,” he said.

Mr Baird sought to defuse the issue of his appointment to the State Water Corporation board of Nick Di Girolamo, the man at the centre of the Independent Commission Against Corruption inquiry and whose gift of a $3000 bottle of wine led to the resignation of Barry O’Farrell on Wednesday.

Mr Baird admitted that the appointment was, in hindsight, a mistake. But he said the decision had been taken by cabinet, which did not know of the allegations that had since emerged from the ICAC hearings.

He said his government was more likely to work hand in glove with the Abbott government than its predecessor, which did not hesitate to position itself against the Abbott government if it saw a political advantage.

Mr O’Farrell publicly opposed the Abbott government on several initiatives, blindsiding the Abbott led-opposition by signing up to Julia Gillard’s Gonski reforms, and then lecturing Education Minister Christopher Pyne when he threatened to renege on the agreement saying: “Stop behaving like an opposition.”

Mr O’Farrell also allowed a conscious vote on same-sex marriage, in contrast to his federal colleagues. Mr Baird, who is close to the Prime Minister and the federal Treasurer, is likely to have a more conservative social agenda than Mr O’Farrell.

He indicated that his strategy of “recycling assets” — selling government businesses to fund new projects — would continue. The strategy has been adopted as a national model by Mr Hockey, who is implementing tax incentives to encourage sale of government assets.

Mr Baird said that the way to gain political acceptance for the sale of assets was to hypothecate revenue from the sale to make sure people knew that they would get tangible benefits.

He said that people might think: “OK, I might not necessarily agree with that lease or that sale but if that provides this, then I’m all for it.”

He has used this tactic to gain acceptance for the sale of ports in Newcastle and the Illawarra, promising a light rail system and a transformation of the Newcastle CBD out of the proceeds of the Port of Newcastle, as well as dedicated revenue for the Illawarra from the sale of Port Kembla.

This would be the model that the new state government would use if it decided to go to the next election with a policy of selling the remaining parts of the electricity industry, the “poles and wires”.

Such a sale could generate billions for NSW, and allow the government to promise a swag of projects to draw sharp contrast with Labor leader John Robertson, who steadfastly opposes the privatisation.

He said his privatisation agenda had been accepted by the community, which was frustrated by politicians who promised to build things but never delivered.

He also indicated he would continue to target superannuation funds to invest in privatisations by the government taking more risk, proving the business and then selling as a low risk, ­stable income stream.

This is the model proposed to fund the WestConnex motorway, for which the government will take on the construction and traffic modelling risk, before selling it to the private sector. This is in contrast to the previous Labor government’s model of pushing tolling risks to private investors.

During a media session in his electorate of Manly, Mr Baird was congratulated and asked to pose for pictures with onlookers, as he freely admitted he was still shocked about the week’s events.