Prime Minister Malcolm Turnbull
Prime Minister Malcolm Turnbull CAROL CHOAAP

12 things about the Prime Minister's income tax plan

1 - PM Malcolm Turnbull will ask state Premiers and Chief Ministers to take an agreed amount of income tax from the federal government, while Canberra will cut funding (like health and education grants) to states to an equal amount.

2 - Mr Turnbull said it will not increase the overall income tax people pay, but he has also not commented on potential for states to raise or cut their share of income tax for competition.

3 - Mr Turnbull said it is about 'accountability and transparency' for the state governments, but the change, if enacted, would allow feds to cut program while maintain the Coalition's election promise not to raise taxes.

Bill Shorten in Yeppoon to lend support to ALP candidate for Keppel (State Seat) Brittany Lauga.
Opposition Leader Bill Shorten. He's opposing it. Chris Ison


Opposition Leader Bill Shorten is opposed outright to the idea, saying Labor will not even consider the idea ahead of the coming election.

5 - The idea of state-federal sharing of income tax was first discussed before the formation of Federation in 1900, but the last serious attempt was made during Malcolm Fraser's time as Prime Minister.

6 - It was again proposed in the National Commission of Audit, which then-Prime Minister Tony Abbott funded to identify ways to cut spending to help the budget.

If only six members had changed their vote we would still have Tony Abbott as PM.
Former PM Tony Abbott rejected this idea when it was brought up while he was leader. Chris Ison


7 - But Mr Abbott rejected the idea after Audit Commission head Tony Shepherd proposed it in 2014.

8 - Mr Turnbull said the state governments would decide what to spend their share of income tax on, with no guarantee of extra funding for cash-strapped local councils around the country.

9 - South Australian Premier Jay Weatherill proposed a similar idea last year, when the Federal Government was seeking state Premiers' support for a now-abandoned GST rise. But he now says he wouldn't back it if states could change their rate.

Australian Immigration Minister Scott Morrison announces at a press conference in Sydney on July 25, 2014, that a group of 157 asylum-seekers in custody on the high seas for weeks will be taken to Australia and held until consular officials confirm their nationalities.
Treasurer Scott Morrison reckons new money won't be enough, but cuts will need to be made. AFP PHOTO - William West

10 - The change, if enacted, would not address the many other structural revenue problems with the federal budget. Treasurer Scott Morrison has also pledged that only cutting spending will help the federal government return to surplus.

11 - the specific amount of income tax the states would get would need agreement from all state premiers and chief ministers, and the federal government - a major hurdle to jump over.

12 - PM Turnbull will officially present a proposal to state leaders at a COAG meeting this Friday in Canberra, which will be the "beginning" of the debate, he said. - Opposition Leader Bill Shorten is opposed outright to the idea, saying Labor will not even consider the idea ahead of the coming election.