1998-12-083911REPS155501998-12-08Mr SPEAKER(Mr Neil Andrew) took the chair at 2.30 p.m., and read prayers.Business155510000SPEAKERMr SPEAKER—Order! By agreement with both the government and the opposition, the chair will be resumed at 3 p.m.Sitting suspended from 2.31 p.m. to 3.00 p.m.Questions Without Notice155515551555Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is to the Minister for Health and Aged Care. Did the minister read the Department of Health and Aged Care's submission to the Senate Community Affairs Committee inquiry into the private health insurance rebate before it was submitted? Is the minister aware that this submission disclosed that the all-up cost of the new scheme will be $1,688 million in the year 2001, including previously undisclosed additional costs to Medicare? Minister, are you aware that the Secretary of the Department of Health and Aged Care withdrew key parts of his submission after the $200 million increase in the cost of the initiative got media coverage? Was your office involved in the discussions which led to the amendment of the submission?1555Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—I did not read the submission because I did not seek to influence it. My understanding is that the department made a mistake and it put in a correction. I could not tell you the exact role of my office. I do not know.15551555Lawler, Tony, MPMr LAWLER834ParkesNP10—My question is addressed to the Treasurer. I seek clarification as to whether the government's plan to establish a new tax system will reduce marginal income tax rates for average earners. What income tax rates will average earners pay if personal income tax is not reduced?1555Costello, Peter, MPMr COSTELLOCT4HigginsLPTreasurer10—I thank the honourable member for his question. I can say to the honourable member that, under the Labor Party's tax system, average earners are now facing a marginal income tax rate of 43 cents in the dollar, plus the Medicare levy of 44½ cents in the dollar. The Labor Party opposes the reduction of marginal income tax rates because it refuses to support the reform of the Australian taxation system. The Labor Party opposes the reduction of marginal income tax rates on average earners.WU5O'CONNORMr O'Connor—You can't be that arrogant!CT4Mr COSTELLO—The member for Corio does not seem to know what his own policy is. The Labor Party opposes the reduction of marginal income tax rates for average earners. It would not be the case that the tax rate was 43c for the average earner in Australia if a previous attempt to lower income tax had gone through. The House would be well aware that, prior to the 1993 election, by an act called `an act to amend the law relating to income tax' in 1992, this parliament passed a law reducing the tax to 30 per cent on what are, today, average weekly earnings. That was not a promise—that was l-a-w.That l-a-w tax cut of 1992 was never put in place, not even for one day. It is still on the statute books. The Labor Party passed an act to reduce income tax rates. They said it was l-a-w. It is still on the statute books and it did not apply for one day. As a consequence, average earners in Australia are now facing a 43c income tax marginal rate. Only if this government's tax reform is put through will average earners in Australia get lower marginal income tax rates.In addition to the relief for average income earners and families—which Labor opposes—there is good reason on economic grounds to cut marginal income tax rates. Cutting marginal income tax rates will help this country in relation to productivity, savings, incentives and the reduction of effective marginal tax rates. Lower personal income tax rates are good economic policy in themselves, but they are being opposed by the Australian Labor Party. On this side, we welcome the opportunity to make good and do better than the fraud of the Labor Party—when it took away the income tax l-a-w—and give families and average income earners lower income taxes and to see a new tax system for a new century.15561556Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—My question is again to the Minister for Health and Aged Care. I renew the question to him as to whether or not his office saw or in any way sought to influence the submission from his department to that committee of inquiry. Further, does the minister concede that the department's amended health insurance submission still shows that the total cost will reach $1.7 billion because of a cost blow-out in the existing means-tested rebate and an extra $80 million cost to Medicare as a result of additional private patients making claims for medical expenses in private hospitals? Does this new and increased estimate include the additional cost of meeting pharmaceutical costs claimed by additional patients in private hospitals?1556Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—I do not concede anything and, quite frankly, I have not even seen the correction. It is a matter for my department. I do not seek to influence what they do.15561556Georgiou, Petro, MPMr GEORGIOUHM5KooyongLP10—My question is addressed to the Minister for Health and Aged Care. Has the minister seen reports that the minor parties in the other house are prepared to offer a compromise on the government's private health insurance rebate in an attempt to avoid its defeat at the hands of the Labor Party? Will the government be compromising on the rebate as presented to the people?DT4CREANMr Crean—How would he know? The department would have to tell him.10000SPEAKERMr SPEAKER—Order! The member for Hotham will exercise considerably more restraint or find himself warned.1556Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—I thank the honourable member for his question. I have seen a proposal put out by the Democrats. The government will not be accepting it. The proposal relies very heavily on so-called experts. Some of these experts have a clear vested interest in a public dominated health care system, such as the Australian Hospitals Association and the Doctors Reform Society. Others among the rest quoted have a stated preference for a residual role only for the private sector, such as the Consumers Health Forum, the Council for the Ageing, Mr Roy Harvey and Professor Douglas. This is essentially a personal preference as distinct from any academic or intellectual position.The Democrats' option would not work. First of all, our plan is to encourage all Australians to take out private health insurance. The universal nature of Medicare is that every taxpayer pays for Medicare whether they need it or whether they don't. It is only fair, then, that every taxpayer should receive a benefit if they choose to make an extra contribution of their own income, whether they use it or not. Secondly, the Democrats' proposal would have an adverse impact on the middle and higher income people who are in fact the largest group of people falling out of private health insurance. Thirdly, those higher income earners are people who by and large do not draw heavily on private health insurance. Lower income earners, usually because of their age, are heavy drawers on the private health system. So that balance of having higher income people who are lower users maintains community rating for those lower income, generally older, higher users. The fact is that if you artificially bring in a whole lot of heavy drawers on the system you will push premiums up, not down.Fourthly, the Democrats' proposal would be highly complex. We have found one of the drawbacks of the current health incentive scheme is its complexity, that you have to apply for it annually. The public, as we have found in research we have done, is very wary of a means test, believing that even if they qualify it may not be for them. If we take up the Democrats' proposal, we will not treat any of the problems, we will only be treating the symptoms, and we will find we are back to exactly where we started.15561556Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—My question is to the Minister for Health and Aged Care. Is the minister aware of the evidence provided by Professor John Deeble to the Senate Community Affairs Legislation Committee inquiry— UNKNOWNGovernment membersGovernment members—You have to bring him into it!PG6Ms MACKLIN—Yes, the architect of Medicare.Opposition members interjecting—10000SPEAKERMr SPEAKER—Order! The member for Jagajaga has the call and has every right to be heard in silence.PG6Ms MACKLIN—Thank you, Mr Speaker. Is the minister aware of evidence provided by Professor John Deeble to the Senate Community Affairs Legislation Committee inquiry where he calculated that 90 per cent of the benefits of the private health insurance rebate will go to existing members of private health insurance funds and a whopping $900 million will go to existing members who are above the income limit of $70,000 for the existing means-tested rebate? What does this do to help ordinary Australians struggling to get into a public hospital?1557Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—That clearly shows that the Labor Party does not understand the basic problems with health. It is more of their carping, negative opposition for the sake of it. What it will do is maintain community rating, prop up the people who are dropping out of health insurance faster than anything else, and slow down the rate of premiums and put them off for a couple of months. The earlier premium increases at a higher level than they would be otherwise will be absolutely your fault.15571557Draper, Trish, MPMrs DRAPER0L6MakinLP10—My question is also addressed to the Minister for Health and Aged Care. Can the minister advise the House what sort of items are included in ancillary cover in private health insurance policies? What is the minister's response to suggestions that these items are only sought by wealthy people?1557Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—I thank the honourable member for her question. I have seen such proposals as put out by the Labor Party. Again, they fail to understand the complexity of the whole system. I have a copy of a letter from the Australian Podiatry Association. Podiatry is one of the reasonably large users of ancillary benefits. This letter states:The members of the Australian Podiatry Association in South Australia wish to express their concern and alarm at the comments from Jenny Macklin that ancillary health cover should be exempted from the rebate. We are very aware of the great need in the community of ancillary health services such as podiatry that enable people to remain mobile and thus live independently.I note a letter from the President of the Australian Physiotherapy Association, who says:The fact is there are significant waiting lists across the public hospital system for patients needing access to physiotherapy services. Including extras insurance in the government package would provide incentives for some individuals to access physiotherapy services in the private sector. By providing such an incentive, waiting lists can be reduced and the public sector may be capable of focusing on those who are in the greatest need or the most disadvantaged.The fact is that, if you look at ancillary benefits paid in the last financial year, 1997-98, 56 per cent were for dental, 16 per cent for optical, seven per cent for physiotherapy, seven per cent for chiropractic, three per cent for pharmacy, four per cent for podiatry, 1.2 per cent for prostheses and appliances and one per cent for ambulance services. Then there are a number of things below one per cent. These are many things accessed by low income people. These are things not available on Medicare. These are items that have very limited capacity to be provided in the public system. If we did not provide assistance for them, Australians would find that they would have significantly less access than they do now.15571557Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—My question is to the Minister for Transport and Regional Services. What benefit does the private health insurance rebate offer people who live in rural and regional Australia who have no access to private hospitals? For example, the electorates of Kalgoorlie and Gwydir have no private hospital beds at all compared to the electorate of Higgins, which has 596 private beds.Government members interjecting—PG6Ms MACKLIN—Do you agree with the Western Australian government's argument that there is a disincentive for most rural and regional Australians to take out private health insurance, given that there are very few private hospital facilities in these areas?Government members interjecting—10000SPEAKERMr SPEAKER—Order! Members on my right! The member for Jagajaga will come to her question.Honourable members interjecting—10000SPEAKERMr SPEAKER—The member for Jagajaga will resume her seat. If the member for Jagajaga could not be heard, it was certainly not the fault of either side of the parliament. It was the fault of both sides of the parliament. The member for Jagajaga will come to her question.PG6Ms MACKLIN—How will your proposed rebate overcome these disincentives or lack of access to hospital services?1558Anderson, John, MPMr ANDERSON4K4GwydirNPDeputy Prime Minister10—I thank the honourable member for her question. I make the point that if she were to spend some time in rural and regional Australia she would find there is a very deep commitment to private health insurance. That is in fact reflected in the very high membership of the private health providers in rural and regional Australia, as in fact has been indicated in this place by none other than the Prime Minister on occasion.The fact of the matter is that it is a reality of life for many rural people that, for quite a range of medical services they need from time to time, they do have to travel, either to capital cities or to major regional centres. The last thing they need is to be told, right in the middle of something like harvest or shearing, that an opportunity for their surgery or whatever has suddenly become available.They need hospitals of choice, doctors of choice and some control over when they might be able to receive the attention that they need. I am absolutely amazed that you would raise the prospect of rural people being prepared to support your absurd position in relation to this issue.15581558Andrews, Kevin, MPMr ANDREWSHK5MenziesLP10—My question is addressed to the Attorney-General. Can the Attorney inform the House of government action being taken to establish a federal magistracy? How will this further assist actions already under way and in improving access to justice?1558Williams, Daryl, MPMr WILLIAMS7V5TangneyLPAttorney-General10—I thank the member for Menzies for his question. It is very pleasing to be able to inform the House of this new initiative of the government. The government has approved in principle the establishment of a federal magistracy. It is envisaged that it will service the Federal Court and the Family Court and will thereby significantly improve access to justice. The federal magistrates will be able to deal with less complex matters, freeing up judges to deal with the more difficult cases that take longer time. There will be simpler and less formal procedures in the summary court and that will be less expensive and more expeditious for the litigants.The proposal does sit well with other reforms the government has initiated to reduce delays. I refer in particular to the expansion of funding for alternative dispute resolution, arbitration, counselling and mediation, particularly in the Family Court. This is a very positive proposal which should provide benefits to those areas, particularly rural and regional areas, that are not serviced by judges' circuits. Speedy passage of the relevant legislation, particularly through the Senate, would help provide the benefits earlier, and I urge the opposition to get behind this excellent initiative.Distinguished Visitors155810000SPEAKERMr SPEAKER—I inform the House that we have present in the gallery this afternoon representatives of a congressional delegation from the United States of America. Our guests have been kind enough in fact to accommodate the unpredictable sitting pattern of the House this afternoon and have returned to the gallery. I trust they feel very welcome.UNKNOWNHonourable membersHonourable members—Hear, hear!Questions Without Notice155915591559Crean, Simon, MPMr CREANDT4HothamALP00—My question is to the Minister for Health and Aged Care. Has the minister seen comments today by the National Vice-President of the Pharmacy Guild, Mr Peter Downing, confirming that 24-packs of Panadeine will be hit by the GST but 50-packs won't? Does he agree with Mr Downing that this anomaly will apply to other products as well? I ask if he agrees with Mr Downing's assessment that:I think there's room for confusion . . . in the minds of the pharmacists who are trying to administer the system and collect the tax on behalf of the Commonwealth. But more importantly, it's going to lead to confusion in the minds of our patients and it could disadvantage some people who need these medicines.Is this the same tax that he claims is across the board, simple and easy to understand and which he said yesterday pharmacists were pretty happy with?1559Wooldridge, Dr Michael, MPDr WOOLDRIDGE8E4ChisholmLPHealth and Aged Care10—Yes, that's the same one. I find this very interesting. I had a question from the opposition last Thursday, saying that all pain medication, all analgesics, in fact had a GST on them. Now I have a question from the opposition complaining that some do and some don't. The fact is your question last Thursday was wrong and the Leader of the Opposition's interjections across the table were wrong. You couldn't get your facts straight then and I don't think you have got your facts straight now.10000SPEAKERMr SPEAKER—The member for Hotham.DT4CREANMr Crean—Yes, Mr Speaker. Is Mr Downing wrong, Minister, or did you misrepresent the pharmacists?10000SPEAKERMr SPEAKER—No! Order! The member for Hotham! The member for Hotham leaves me with no choice but to issue a warning.15591559Cadman, Alan, MPMr CADMANSD4MitchellLP10—My question is addressed to the Minister for Employment, Workplace Relations and Small Business. Minister, are you aware of commentary in today's media about the strength of the Australian economy and the impact that labour market deregula tion has had on jobs? What would the impact of alternative policies be on the economy?QJ4THEOPHANOUSDr Theophanous—I raise a point of order, Mr Speaker. The question is entirely hypothetical. Under standing order 144, it is out of order.10000SPEAKERMr SPEAKER—The member for Calwell makes a valid point of order in that the second part of the question certainly did seek a hypothetical opinion. I invite the minister to respond to the first part of the question.Opposition members interjecting—1559Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—If you would watch and listen, you would learn a lot. In answer to the first part of the question, I did see a very interesting comment piece by John Edwards this morning in the Financial Review , who of course was a key adviser to the previous Labor administration—and a biographer of Mr Keating, no less. Under the headline `The secret of Australia's success', he writes an interesting comment:Over the two years to the June quarter, the Reserve Bank of Australia index of wages and salaries has increased nearly 10 per cent after inflation. A rapid increase in profits has gone hand in hand, however, with extremely low inflation.I suppose that is first of all a testimony to the good economic management in the last couple of years, nearly three years. He then went on to say:The secret of this economic magic is productivity growth.. . . . . . . . .In the year to June, productivity growth measured as real GDP per hour worked was running in excess of 3.5 per cent—triple the average of the `80s—when Labor was in—. . . Because of very high productivity growth, nominal labour costs per unit of output were less than inflation over the first half of this year. This meant that despite very high real earnings, real unit labour costs fell.And how was this achieved? I read on:While investment has been rapidly increasing, employers have also found greater freedom to reorganise work.. . . . . . . . .Visiting clients around the country, we see plenty of anecdotal evidence that the combination of computers and greater freedom to rearrange the job is changing the way Australia works.DT4CREANMr Crean—Introduced by Labor.WI4Mr REITH—I will take the interjection in a moment. It is a very important point being made by a key adviser to the previous Labor government—it is commonsense. If you give people the freedom at work as employers and as employees to sit down and rearrange the way they work and run their businesses, then that is very good for the businesses. That boosts Australia's productivity, it makes the jobs we have more secure but, even more importantly, it opens up the opportunity for more jobs, which is exactly what this government is trying to do.Let me respond to the interjection. The interjection was to the effect that this was all a result of what Labor was doing. In fairness, whilst Labor was always hog-tied to the trade union movement, in the early 1990s they did at least rhetorically recognise that if you gave greater freedom to people at work then this would actually be good for everybody, whether you are an employer or an employee. The reason that interjection is relevant is that that is not Labor's policy today. We are trying to build this system, and with the Workplace Relations Act we gave people more freedom at work than they have ever had before. And that is one of the reasons we are seeing such a conjunction of good economic news: we are doing better on unemployment; we are doing well on inflation; we are doing well with our exports; our businesses are doing well; more than half the jobs created have been in small business. If we encourage our small businesses, there will be more jobs in the future, and we will continue this progress.And what is the alternative proposition? The alternative proposition—PE4BEAZLEYMr Beazley—I raise a point of order, Mr Speaker. It goes to relevance. This is specifically the part of the question that you ruled out, Mr Speaker, according to the ruling that you gave to the member for Calwell. That was where the question asked for an alternative view around today, which you said was essentially hypothetical. The minister now announces that he is about to go down the road of the alternative policy, and that is against your ruling.10000SPEAKERMr SPEAKER—I would be anticipating the minister's reply to rule what he has not said out of order. I call the minister.WI4Mr REITH—The point I make is that what we are doing is building a new system. The alternative to the new system is to go back to the old system. And that of course is the Labor Party's policy. We have the ACTU presidents all sitting on the front bench. And the Leader of the Opposition went to the ACTU council last weekend—or whenever it was—and said, `In respect of Labor's policy, we are not going to change it one jot or tittle.' In other words, they are going to stick with the regressive policy they had in the last election, which was in fact a repudiation of the policy they espoused when they were in government. And what was the consequence of that? Not more jobs but fewer jobs. This opposition is an opposition for the sake of opposition. And they are opposed to the things we are doing to help small business to create jobs. They are opposed to unfair dismissal changes, which would create jobs. They are opposed to the preservation of young people's jobs in business, particularly small business. They are opposed to the principal reforms that we need in order to create jobs. This is an opposition that has no policy but opposition for the sake of opposition.15601560Tanner, Lindsay, MPMr TANNERYU5MelbourneALP00—My question is to the Minister for Finance and Administration. I refer to the statement by the Treasurer that the government had adopted most of the recommendations of the Vos committee, and in some cases has gone further. What is the additional cost to the budget of adopting these changes?1560Fahey, John, MPMr FAHEYHQ5MacarthurLPFinance and Administration10—I thank the honourable member for Melbourne for his question. I can indicate that, like all that has occurred in this government for the past nearly three years, there has been a very responsible approach to all matters fiscal, a very responsible approach to the budget. That has been demonstrated time and again in the way in which the economy has been ticking over. I can assure the honourable member for Melbourne and all members of the House that the implications of the adoption of the recommendations in the Vos report are minimal to negligible.15611561Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—My question is addressed to the Minister for Community Services. Minister, can you inform the House how older Australians will benefit from the introduction of the government seniors health card?1561Truss, Warren, MPMr TRUSSGT4Wide BayNPAgriculture, Fisheries and Forestry10—I thank the honourable member for his interest in this particular matter. I am very pleased to report to the House that, in only three weeks time, around a quarter of a million extra Australians will be eligible to receive the Commonwealth seniors health card. This is an important initiative by this government, and I am pleased to report that it has passed the parliament. I hope the goodwill that was associated with that measure, which is unambiguously good for self-funded retirees, will soon flow through to the private health insurance rebate as well, because that is another important initiative for self-funded retirees.Close to a quarter of a million self-funded retirees, including about 20,000 veterans, will be eligible now for the seniors health card because the government has extended the income limit for people who are eligible to receive this card. For single people, the income limit has been extended from $22,320 to $40,000, and for a couple from $35,620 to $67,000. Those are very generous income limits now, and the effect of that will be that many self-funded retirees will be eligible for this card. One of the major benefits that they will receive is access to the concessional rate under the Pharmaceutical Benefits Scheme—$3.20 for their prescriptions and, after 52 prescriptions, they will get them free.One other thing I would like to report to the House is that a new application form has been prepared. It has been very much simplified. Most people will simply have to provide their taxation notice and fill out a few details. The forms will be available in Centrelink offices next week. I would encourage the seniors of Australia to access this form, and access this benefit which starts on 1 January next year.15611561Swan, Wayne, MPMr SWAN2V5LilleyALP00—My question is directed to the Minister for Aged Care. Minister, do you recall that yesterday you advised residents of independent units within retirement complexes to avoid paying the GST by using other external services under the Home and Community Care Program? How do you propose those same residents avoid the GST on the service charge they pay for their independent units? How is it fair for the GST to hit some retirement complex residents while exempting others? How are you proposing to distinguish GST paying residents from non-GST paying residents. Are you proposing to get them to wear a badge?1561Bishop, Bronwyn, MPMrs BRONWYN BISHOPSE4MackellarLPAged Care10—Mr Speaker, the member for Lilley is a very slow learner.Opposition members interjecting—ZD4HOWARDMr Howard—Hear, hear.SE4Mrs BRONWYN BISHOP—He likes to be known as one of the Glimmer twins. I think he is getting dimmer and dimmer.10000SPEAKERMr SPEAKER—The Minister for Aged Care will come to the question.SE4Mrs BRONWYN BISHOP—I have got to say that I saw a press release which the Dimmer twin put out yesterday which was such a joke that nobody gave it any credibility.I did not say what you said today in the parliament. I made the point very clearly that the people who are entitled to use health services of any type will find they are GST free. I make the point again so that you this time can understand.Mr Swan interjecting—10000SPEAKERMr SPEAKER—The member for Lilley!SE4Mrs BRONWYN BISHOP—A very slow learner, Prime Minister, is the member for Lilley.10000SPEAKERMr SPEAKER—The minister will come back to the question.SE4Mrs BRONWYN BISHOP—Very simply, if the ALP would choose to read the policy properly, they would not mislead people and they might even understand that it is good for Australia.15621562Neville, Paul, MPMr NEVILLEKV5HinklerNP10—My question is addressed to the Minister for Community Services, representing the Minister for Family and Community Services. Would the minister inform the House of the benefits of changes to child support legislation passed in the Senate this sitting? How do these changes impact on the payers, the payees and the children in my electorate of Hinkler and, for that matter, in the wider community?1562Truss, Warren, MPMr TRUSSGT4Wide BayNPAgriculture, Fisheries and Forestry10—May I thank the member for Hinkler for raising this matter today which I know is of interest to many members on the government benches and, indeed, members opposite who have taken a keen interest in the Child Support Agency, the formula and many of the other issues associated with the fair delivery of income support for Australian families.The changes to the Child Support Scheme which have now passed the parliament and will take effect from 1 July have certainly been long awaited. There are quite a large number of changes. They reflect the very important principle which this government has always emphasised—that children are the financial responsibility of their parents. The second important principle is that government should not seek to interfere unnecessarily in people's lives. The government will continue to provide a safety net, but fundamentally the responsibility for care for children rests with their parents.Under the new tax system, around 22,500 families will be better off as a result of the government changes to the child support arrangements. But as far as the amendments to the act—which has now been supported by the parliament—are concerned, there are a number of very significant new initiatives. Parents will be encouraged to deal directly with each other, rather than go through the Child Support Agency, whenever those arrangements are able to work satisfactorily. The amount of income that a non-custodial parent will be able to earn will rise by 10 per cent before the amount of the child support payment is calculated. The amount that a custodial parent can earn before their payments are affected will fall. Income earned overseas and the effects of negative gearing will be treated differently under the new arrangements to ensure a fairer assessment of income.In addition, in an important new initiative, 150,000 payees will be better off because of the introduction of the minimum payment—everyone will be paying a minimum of $260 a year. There are a large number of reforms incorporated in this new legislation that go a long way to meeting the government's commitment to improve the child support arrangements. We recognise that more work still needs to be done. I would like to compliment the large group of government members who have been a part of developing these proposals and have worked long and hard in putting together a practical option that trades off the interests of both custodial parents and non-custodial parents in the best possible way to ensure the welfare of children.We know there is more to be done. The government is committed to moving to stage 3 of the reform proposals as quickly as possible. I commend these changes to the House. I think they will make a significant improvement. I assure the House that we will be reporting back, hopefully in the next calendar year, with new initiatives to further enhance these reforms.15621562Lee, Michael, MPMr LEEMG4DobellALP00—My question is addressed to the Minister for Education, Training and Youth Affairs. Again, I seek clarification of an aspect of the government's goods and services tax bill concerning private tuition. Minister, is it the case that the parents of a student who employ a private tutor from a company like Power Coaching or Kip McGrath, to assist their child with remedial reading at home, will have to pay a GST on the tutoring fees? Minister, can you explain why it is good policy for families to have to pay GST on remedial coaching?8K6FITZGIBBONMr Fitzgibbon—Tell the truth.1563Kemp, Dr David, MPDr KEMPBT4GoldsteinLPEducation, Training and Youth Affairs; Minister Assisting the Prime Minister for the Public Service10—The member for Dobell is the perfect spokesman for the intellectual vacuum—10000SPEAKERMr SPEAKER—The minister will resume his seat.8H4HAWKERMr Hawker—Mr Speaker, I raise a point of order under standing order 75. On each occasion when the Minister for Education, Training and Youth Affairs has got up to answer a question in the last three weeks, the member for Hunter has made an offensive reflection on the integrity of the minister and I ask you to intervene.QK6SERCOMBEMr Sercombe—It's unrealistic, not offensive!10000SPEAKERMr SPEAKER—Order! The member for Maribyrnong. I did hear the remark and was uncertain as to where it had come from, otherwise I would have intervened. I take the point of the member for Wannon. I will ignore the remark on this occasion. The Minister for Education, Training and Youth Affairs is entitled to be heard in silence, and any member is entitled to ask a question without the sort of assistance that they seem to be getting from both sides of the parliament.BT4Dr KEMP—The member for Dobell has asked me a question about the impact of taxation on the affordability of education to parents. The Labor Party has a taxation policy which it supports—the wholesale sales tax—which is increasing the cost of education to parents day after day.5I4McMULLANMr McMullan—On a point of order, Mr Speaker: this is the most patently obvious question of relevance ever. The question to the minister was precise with regard to whether there was a tax on a particular matter. The minister set out to redefine the question and then answer the question which he had asked himself. His answer so far has related not one bit to the question raised by the member for Dobell and I will bet money it never does.10000SPEAKERMr SPEAKER—I deem the minister's answer to be entirely in order.BT4Dr KEMP—The Labor Party supports the wholesale sales tax, which is putting up the cost of education to parents day after day. The tax system which the Labor Party sup ports puts a 22 per cent tax on such items as foolscap paper, on drawing pads, calculators, exercise books—Opposition members interjecting—MG4LEEMr Lee—On a point of order—10000SPEAKERMr SPEAKER—There is a way of taking a point of order and it is not by throwing papers on the floor; it is by rising to do so.CE4O'KEEFEMr O'Keefe—If you don't take any notice of him, what else could he do?10000SPEAKERMr SPEAKER—I name the member for Burke. I require him to leave the House under the provisions of standing order 304A.The member for Burke thereupon withdrew from the chamber.Mr Leo McLeay interjecting—10000SPEAKERMr SPEAKER—I warn the member for Watson.4I4McLEAYMr Leo McLeay—On a point of order, Mr Speaker.SJ4TUCKEYMr Tuckey—Are you going to move the motion?4I4McLEAYMr Leo McLeay—I am not going to move the motion, but you might find out what to do.10000SPEAKERMr SPEAKER—The member for Watson will resume his seat and consider himself warned. I have dealt fairly with the member for Burke, as he is well aware. The minister will now come to the question.4I4McLEAYMr Leo McLeay—I rise on a point of order, Mr Speaker.10000SPEAKERMr SPEAKER—I will hear the member for Watson.4I4McLEAYMr Leo McLeay—Mr Speaker, the Hansard and the tape will clearly show that you named the member for Burke. You did not suspend him; you named him. If you have named him, you carry on with that or you rescind it. You cannot have it both ways.10000SPEAKERMr SPEAKER—The member for Watson is well aware of the fact that it was my intention to discharge the member for Burke from the service of the House for a period of one hour, and that is precisely what I have done. The minister has the call. The member for Watson will resume his seat. If the member for Watson seeks to take a further point of order on the ruling I have given, he too will be suspended under standing order 304A.4I4McLEAYMr Leo McLeay—Mr Speaker, you cannot stop members taking points of order just because you say so. My point of order is that you said it was clearly your intention. I wonder how do we know what your intentions are.10000SPEAKERMr SPEAKER—Under the provisions of standing order 304A, the member for Watson is discharged from the service of the House for a period of one hour.The member for Watson thereupon withdrew from the chamber.PE4BEAZLEYMr Beazley—Mr Speaker, I raise a point of order. It is on the ruling that you gave that people cannot raise points of order.Mr Howard interjecting—PE4BEAZLEYMr Beazley—You asked me.10000SPEAKERMr SPEAKER—Prime Minister, the Leader of the Opposition has the call.PE4BEAZLEYMr Beazley—Mr Speaker, I move that your ruling be dissented from—the ruling that you gave that the member for Watson was not permitted to raise a point of order—SJ4TUCKEYMr Tuckey—The standing orders don't allow for this.Opposition members interjecting—10000SPEAKERMr SPEAKER—The Minister for Forestry and Conservation will resume his seat.PE4BEAZLEYMr Beazley—Mr Speaker, the ruling that you gave and effectively then completed by suspending the member for Watson from the service of the House is a ruling that I do not think any member of parliament here can accept. The standing orders here are absolutely clear, Mr Speaker.WI4REITHMr Reith—Mr Speaker, I raise a point of order. The Leader of the Opposition has moved a motion of dissent in respect of the statement by you pursuant to standing order 304A in respect of the member for Watson. Mr Speaker, under the standing orders, it is quite clear that there should be no debate to such a statement by you or a direction under 304A. My point of order therefore is that the proposed motion of dissent is out of order; it is out of conformity with the standing orders and should not be accepted.I would also make this point: for some reason the opposition want to make a mountain out of a molehill. The fact of the matter is that when you dealt with the member for Burke, Mr Speaker, the words you used were that you named him and then you went on to say that it was pursuant to 304A. On that basis, it was quite clear to me from the statement you made at the time that you were exercising your discretion under 304A. Under those circumstances, Mr Speaker, there is no basis for a motion of dissent from your ruling.PE4BEAZLEYMr Beazley—I wish to speak to that point of order, Mr Speaker. I am speaking not to either your naming of the member for Burke or to your suspension of the member for Watson. I am speaking to, and moving dissent from, your ruling which, in effect, refused permission for the member for Watson to raise a point of order for you, because it was in the raising of that point of order, which you effectively failed to permit him to do so, that you decided at that point in time to name him. In those circumstances—SD4CADMANMr Cadman—You can't debate this.PE4BEAZLEYMr Beazley—I can debate this because I am moving a motion. The motion is that the Speaker's ruling—that is, the ruling he gave that the member for Watson was not permitted to raise a point of order—was incorrect and therefore we are dissenting from it.WI4REITHMr Reith—Mr Speaker, I raise a point of order. It is entirely within your discretion as to whether or not you recognise a member. On this particular occasion you neither gave a ruling nor did you recognise the member for Watson. That may be a matter of immense disappointment to the Leader of the Opposition, but the fact of the matter is that if there has been—Opposition members interjecting—10000SPEAKERMr SPEAKER—The chair has exercised a great deal of tolerance in hearing points of order from both sides. Currently, the Leader of Government Business has the call.WI4REITHMr Reith—Mr Speaker, my point of order may escape the opposition, but the fact of the matter is that there was no ruling. If there was no ruling, there can be no motion of dissent from a ruling that you have not made. On that basis, my point of order is that the motion is out of order and cannot proceed.5I4McMULLANMr McMullan—Mr Speaker, I wish to speak to the point of order raised by the Leader of the House. Mr Speaker, it is an absurd proposition to suggest that your saying to the member for Watson that if he proceeds to take a point of order you will suspend him does not constitute a ruling from which we can dissent. To pretend that we are having tolerance with regard to people raising points of order on a day when you have told someone they are going to suspended if they raise a point of order is a preposterous proposition from the Leader of the House—and he knows it is preposterous—and to allow him to come up and make speeches about two points of order on the same day that you have threatened to suspend the Chief Opposition Whip on the basis that he might raise one in the future is, I think, a preposterous point of order that you should immediately reject.1K6BILLSONMr Billson—On a point of order, Mr Speaker, under standing order 100, if there is an objection to a ruling from you it must be taken at once. I wonder how the Leader of the Opposition—10000SPEAKERMr SPEAKER—The member for Dunkley will resume his seat. To my knowledge, the chair has not as yet given a ruling.PE4BEAZLEYMr Beazley—I rise on a point of order. It goes to standing order 98:Any Member may at any time raise a point of order which shall, until disposed of, suspend the consideration and decision of every other question.Standing order 99 states:Upon a question of order being raised, the Member called to order shall resume his or her seat and, after the question of order has been stated to the Speaker by the Member rising to the question of order, the Speaker shall give a ruling thereon.Standing order 100 states:If any objection is taken to any ruling of the Speaker, such objection must be taken at once, and a motion of dissent, to be submitted in writing, moved, which, if seconded, shall be proposed to the House, and debate thereon shall proceed forthwith.The member for Watson stood and sought to make a point of order with you. As he raised that point of order with you, you immediately suspended him. The effect of that was to deny him his rights under section 98. We dissent from your ruling. It would probably help the business of the House if we got on with it.Dissent from Ruling156510000SPEAKERMr SPEAKER—I do not have a position to defend and, in that case, I am not free to defend a position. In fact, I accept the motion.15:54:001565Beazley, Kim, MPMr BEAZLEYPE4BrandALP00—I move:That the Speaker's ruling be dissented from.I went through the relevant standing orders in my opening remarks but they bear repeating here. They are quite clear-cut. Standing order 98 says:Any Member may at any time raise a point of order which shall, until disposed of, suspend the consideration and decision of every other question.It is quite clear. There is no equivocation in this. There is no discretion in relation to this. It is not a case of: if the Speaker feels like hearing a point of order the Speaker will hear a point of order; if he does not feel like hearing a point of order, the Speaker won't. There is nothing in this which indicates any intention to allow any level of discretion to the chair in the conduct of a consideration of a point of order—none whatsoever.There are many areas of standing orders which are quite opaque. This is not one of them. This is one absolutely clear-cut standing order. In case you have not got the point about what the standing order means, it goes on to talk about another couple of standing orders which relate to the way in which the House will then be conducted. Standing order 99 says:Proceedings on question of orderUpon a question of order being raised, the Member called to order shall resume his or her seat, and, after the question of order has been stated to the Speaker by the Member rising to the question of order, the Speaker shall give a ruling thereon.It then invites you, Mr Speaker, not to simply pump the member from parliament when that point of order is raised with you but actually to deliberate on whether or not the point of order is valid and rule on the matter of wheth er or not that point of order is valid. The appropriate response to the member for Watson would not have been his discharge. The appropriate response would have been to deal with that point of order. If he were then disorderly, you would be perfectly entitled to discharge the member for Watson—or any other member of this House.You do have the authority to discharge any member of this House under two sections of standing orders, at least one of which you have used twice today. But it is hardly a fair interpretation of standing orders—in fact, it is a unique interpretation of standing orders—to suggest that what ought to happen here, before any ruling has been made on whether the member for Watson has a valid point of order, is that he simply leave the chamber.There were plenty of reasons for him to raise a point of order on this. In fact, you yourself seemed to be indicating quite clearly that you were going to move on the particular minister. This was one occasion when the minister was not asked a question which would allow him to transverse a huge array of matters related to a goods and services tax or any other form of tax on any education materials—it was specifically about private tuition. The minister, who repeatedly takes licence in this House with the standing orders to the embarrassment of all concerned, will always be likely to have this point of order raised on him. He is a minister who, generally speaking, is a threat to speakers and a threat to good order in this House. He has a number of cousins on the frontbench as far as evading the issue of a question is concerned, but he stands out among them, head and shoulders. This is a minister for whom standing orders is a matter of levity, a matter of jest, a matter of complete irrelevance.He occupies this House with dorothy dixers day in and day out—for hours and hours—but when he is asked something specific he always fails to answer. He does not occasionally answer; he always fails to answer. It is therefore likely that he will frequently have standing orders related to relevance raised upon him and, indeed, that is precisely what happened to him here today. At the point when the member for Watson attempted to raise the point of order of relevance, the minister had had only one point of order raised on him by the Manager of Opposition Business, who, in response to the continued flouting of the question of relevance, was depressed, annoyed and of a cast of mind not to bother pursuing it, so hopeless did he think the cause.But that does not apply to all members of the House. Other members are entitled to raise that question as well, and that question was quite relevantly raised by the member for Watson. That is all he was talking about—a point of relevance. The member for Watson was not heckling. The member for Watson was not abusing the minister at the table. The member for Watson was not abusing the Speaker. The member for Watson was not abusing anyone across the frontbench. The member for Watson was doing something particularly simple which, I would have thought, would have been a matter of routine consideration by the House.It is not as though the minister concerned was being disrupted by the repeated raising of points of order which had reached a point of disorderly behaviour. It is not impossible for such a set of circumstances to occur in this House. It is not something which occurs frequently, but it is possible for it to occur. It had not occurred in this case. In this case, the matter had been raised once, and there had been, after the matter was raised, a substantial period of time in which the minister avoided the question entirely—avoided the fact that this government intends to impose a GST on tuition fees where it is privately arranged, as it is by parents whose children are in government schools.WI4REITHMr Reith—Mr Speaker, my point of order is one of relevance. Under the standing orders, the mover of the motion is required to address the motion before the chair, namely, the dissent. He, after six minutes, has run out of things to say, so he is moving on to the minister and the question of the goods and services tax. He is clearly running out of steam and should be required to get back to the motion; otherwise, he ought to just sit down. 10000SPEAKERMr SPEAKER—The Leader of the House will resume his seat. The Leader of the Opposition is in fact ranging wider than dissent from the motion, it is true, and I ask him to draw his argument back to that point.PE4Beazley, Kim, MPMr BEAZLEY—I am very pleased to do that, but it is necessary, in the course of my remarks, to raise the point as to why it was relevant for the member for Watson to raise these points as a point of order. If it was not relevant for him to do so, it may well have been a disorderly intervention on his part, even though you did not warn him or in any other way deal with the person as a Speaker normally would.In circumstances where you consider his behaviour disorderly, it is relevant to work out whether or not there is a case for the member for Watson to be on his scrapers asking about whether or not a point of order was validly made. So let me go to the question so we can establish whether or not it was a reasonable thing for the member for Watson to be doing that and not to be pushed out of the House before he had a chance to complete his remarks. This was the question, within the standing orders framework, seeking clarification:Minister, is it the case that the parents of a student who employ a private tutor from a company like Power Coaching or Kip McGrath, to assist their child with remedial reading at home, will have to pay a GST on the tutoring fees? Minister, can you explain why it is good policy for families to have to pay GST on remedial coaching?What the minister was doing at the time was talking about whether or not there is a wholesale sales tax on foolscap paper. He was talking about whether or not there is a wholesale sales tax on pencils. He was telling you whether or not there is a wholesale sales tax on X, Y and Z. What he was not talking about was what he was specifically asked about and, looking at the way in which you were preparing in fact to handle the particular minister, you rather thought he might not be also. You rather thought that, on this very specific question, he might be in fact about to deviate considerably from the standing orders in relation to relevance.SJ4TUCKEYMr Tuckey—On a point of order, Mr Speaker, on relevance: the Leader of the Opposition is speaking to circumstances that are not relative to your ruling. I was close enough to hear the Chief Opposition Whip. The basis of his point of order and his persistence, which is of course especially prevented—Opposition members interjecting—10000SPEAKERMr SPEAKER—Order! The interjections that I am hearing from the left are taking up the time that is allocated to the Leader of the Opposition. I do not intend to hear the minister in an unlimited sense, but I will hear his point before he resumes his seat.SJ4TUCKEYMr Tuckey—Mr Speaker, if a member persistently and wilfully disregards the authority of the chair, they can be subject to 304 or 304A. The point I am making to you, sir, is that the opposition whip was trying to make a point of order on the procedures of naming. Naming is not an exclusion to the House; naming has to be moved, and it was not.10000SPEAKERMr SPEAKER—The minister has made the point of order, which is something that I have been entertaining here, and I have been exercising a good deal more leniency towards the Leader of the Opposition than he is entitled to. The member for Watson was named on the basis of the procedures unrelated to the question that had been asked of the minister about the GST. I now invite the Leader of the Opposition to return to the dissent motion.PE4Beazley, Kim, MPMr BEAZLEY—It was actually dealing with both issues—the question of relevance and the detail related to naming. Your last words before you sent him out were, `If the member for Watson seeks to take a further point of order on the ruling I have given, he too will be named under standing order 304—he will be suspended under standing order 304A.'Mr Speaker, as it happened—and I fully understand the reasons why you did it—the handling of a point by naming was incorrect in any shape or form as far as this chamber is concerned. If you name a person in this place, and it is perfectly within your powers to do so, this person then has to be moved to be exited from it, usually by the Leader of the House. By failing to do so and to back you up, that was a problem for him and for you, but it was a perfectly relevant thing for the member for Watson to be concerned about. He was concerned about both that issue and the question of relevance, which is the subject of what we are dealing with here today.There is just nothing in House of Representatives Practice or anywhere else to permit the dealing with of a member while raising legitimately a point of order in this place. Nor is the person concerned in this regard, the member for Watson, a prolific point taker. He has in fact raised only four points of order in the current session of parliament. What the House of Representatives Practice says here is quite clear:Any Member may raise a point of order at any time which, until disposed of, suspends the consideration and decision of every other question. A point of order necessitates a ruling being given by the Chair and may be objected to and a motion of dissent moved. A motion of dissent must be debated and determined immediately.There are grounds for considering that a Member taking a point of order shall not be interrupted by another Member taking a point of order on the first point of order.Which must be said to have been offended pretty regularly here. It continues:The basis of this point of view is that as a point of order is an appeal or a complaint to the Chair in connection with the operations of the House, a Member has a right to make the point without interruption except by the Chair and have a ruling or decision given.Mr Speaker, it is quite clear, under House of Representatives Practice and under the standing order, that your situation is such that you must hear a proposition raised. I would have thought that, if the point of order were to be raised under either of those grounds, either the ground of relevance or the ground related to whether or not standing order 304A had been appropriately used in the process of naming, the grounds are there, amply and clearly enunciated, for a point of order to be effectively taken.It just happens to be the case that the minister concerned is a man who provokes these sorts of situations by his continued failure to remain relevant to the questions that he is asked. He might well wish to do so on this subject because this is a subject about which the government has a great deal of embarrassment. He is likely to evade questions. He is likely to create a disorderly situation.3K6CAMERONMr Ross Cameron—Mr Speaker, I take a point of order.UNKNOWNOpposition membersOpposition members—You're in the wrong seat. Sit down!3K6CAMERONMr Ross Cameron—I welcome the assistance of my colleagues on geography. The embarrassment or otherwise of the government on various policy issues has got nothing to do with this motion of dissent from your ruling. I ask that you require the Leader of the Opposition to return to the question.10000SPEAKERMr SPEAKER—The member for Parramatta will resume his seat. The Leader of the Opposition has the call. The Leader of the Opposition will focus his remarks—PE4Beazley, Kim, MPMr BEAZLEY—Mr Speaker, I think it is quite relevant—Opposition members interjecting—10000SPEAKERMr SPEAKER—The Leader of the Opposition is not being assisted by those behind him. He has the call. I ask him to return to the essence of the dissent motion.PE4Beazley, Kim, MPMr BEAZLEY—I think it is relevant in a dissent motion, in these sets of circumstances where two sets of problems occur and are confronting you at the same point, to go through the circumstances in which these situations occur. If you do not comprehend those circumstances, you cannot comprehend the situation in which you find yourself making these rulings with which we have a problem. In that set of circumstances, the behaviour of the minister, both routinely and at the time, is certainly relevant as to whether or not dissent ought to be moved from your ruling.It is quite understandable that the minister finds it difficult to explain when he is dealing with a situation in which private schools are able to escape the GST by having their tuition in-house but, as many people in government schools and in poorer Catholic schools experience, when they experience difficulty with their education and have a need for remedial education, they go to Power Coaching College and all the other colleges, which will now cop a GST.3K6CAMERONMr Ross Cameron—Mr Speaker, on a point of order—SJ4TUCKEYMr Tuckey—Mr Speaker—10000SPEAKERMr SPEAKER—The member for Parramatta and the Minister for Forestry and Conservation will resume their seats. I plead with the Leader of the Opposition to return to the kernel of the dissent motion.PE4Beazley, Kim, MPMr BEAZLEY—In these circumstances it is often likely that you will find disorderly conduct which will legitimise the placing of a member of parliament outside this chamber. And then you will confront two opportunities. There is the opportunity to use standing order 304A, which is a recent standing order which assists the processes of the parliament by enabling you to put the person out without a resolution of the House. The other opportunity relates to the naming of a member, an older proposition but one which I am not sure that you have used, at least to this point. It is certainly used by Speakers to put people out of the House.When you name somebody, I would have thought that a halfway competent Leader of the House would be on his feet to support you instantly. But we are dealing with a dope in this situation.10000SPEAKERMr SPEAKER—The Leader of the Opposition!PE4Beazley, Kim, MPMr BEAZLEY—In these circumstances you do not get the protection that you deserve or need. Nevertheless, having not had the protection which you deserve or need is no reason for you to act outside the standing orders. When the standing orders clearly require you either to name somebody under that and be backed up by the House or to use 304A, you use one or the other, but you do not use both simultaneously.I understand that you lack the protection of a competent Leader of the House, but that is no excuse to move outside what is required as far as the standing orders are concerned. What is required is this: you are not entitled to say to the member for Watson, under the standing orders, `If the member for Watson seeks to take a further point of order on the ruling given, he too will be named under the standing orders.' You are not permitted to do that.The member for Watson raised with you a perfectly valid point of order. That point of order went to whether or not it was appropriate for a person to be obliged to leave the chamber without a vote on naming. That is a common, average interpretation of the standing orders—a perfectly reasonable point of order to take with you. For you to rule it out in the first instance, merely getting up and raising it with you again does not of itself constitute an offence in this place under any reasonable reading of the standing orders. The House was not collapsing in disorderliness. The House was not in a situation where ministers and other members could not be heard. The House was within the dull roar that usually accompanies question time, in a reasonably orderly situation, except for one person, that being the minister. Instead of the minister being dealt with effectively under the relevant rules in relation to the standing orders, people on this side of the House were being pushed out of the place in a heavy-handed fashion and, ultimately, in a fashion ultra vires the standing orders. (Time expired)10000SPEAKERMr SPEAKER—Is the motion seconded?16:14:001569McMullan, Bob, MPMr McMULLAN5I4CanberraALP00—It is very much seconded, Mr Speaker, fundamentally and importantly, because what you have done today is to threaten the most basic right of members of parliament: the right to take a point of order. If we cannot take a point of order, Mr Speaker, what rights do we have? And do not say that we were not threatened by it. This is what took place: you said, `If the member for Watson seeks to take a further point of order, he too will be suspended under standing order 304A.' What is the proper basis? Standing order 304A says that somebody can be suspended if they are disorderly.Are we to believe that taking a point of order you do not like is now disorderly? Are we to believe that, on that basis, anybody who stands when you think he should not, and says, `I want to take a point of order,' might be kicked out under standing order 304A, because that is what this action says. What is worse, that is what you have done. You did not only threaten to do it, Mr Speaker, you did it.Our concern on this day is fundamentally that we on this side of the House have been extremely tolerant since you became the Speaker. We thought it appropriate that a new Speaker should have some time to find his feet and try to establish a set of reasonable behaviour arrangements in this place in accordance with standards you wanted to set, but it has become harder and harder; and today it has become intolerably difficult. We have had the problem, which we have raised with you, about the comments that are made which seem to us to be consistently of a partisan nature, particularly during question time, and which give cause for concern to members—and which have been raised by me with you in this place.We then had today the point of order that was raised about the minister for education, who is a serial offender, a serial ignorer of the standing orders that say answers need to be relevant. We had the quintessential case today. In the context in which the points of order and the concerns by the member for Burke, then the member for Watson, were raised, it is extremely relevant to know that we had the minister, the serial offender, up here today, not taking the slightest notice of what the question was, seeking in the first instance to redefine it so he could then answer a question to which he had an answer, instead of the one asked by the member for Dobell for which he had no answer, and, in a way that I and all my colleagues found extremely provocative, you allowed that to continue. You may have considered that my point of order was too early—WI4REITHMr Reith—Mr Speaker, I take a point of order on relevance. The member for Fraser has run out of puff after three minutes, half the time the Leader of the Opposition took. It is not open to the member for Fraser to canvass broader issues. As all of us who have been in the House for a long time know, when you are moving a dissent motion, you have to stick to the issue. It is a very tight little agenda.10000SPEAKERMr SPEAKER—The Leader of the House has made his point of order.Mr Martin Ferguson interjecting—10000SPEAKERMr SPEAKER—The member for Batman is currently taking up time that would otherwise be allocated to the member for Fraser. The member for Fraser has the call. Clearly, the same obligations the Leader of the Opposition had to address the dissent motion apply to the member for Fraser.5I4McMullan, Bob, MPMr McMULLAN—Absolutely right, Mr Speaker, but we cannot discuss whether your ruling with regard to the behaviour of the member for Watson was appropriate and the ruling you gave from which we are dissenting was a valid one without looking at the context in which it took place—and that is simply what I am doing. Our concerns have consistently been as to how we can get you to rule, and how we could today get you to rule, that the minister for education needed to answer the question. That is causing significant concern, not just to the member for Burke and not just to the member for Watson.10000SPEAKERMr SPEAKER—I must reluctantly interrupt the member for Fraser and indicate that was not at the heart of my intervention on the member for Watson.5I4McMullan, Bob, MPMr McMULLAN—No, but it was the heart of the context in which the ruling took place and the response of the member for Burke took place, and the context of the response of the member for Burke to that and to the error which you made, about which no further action was taken, other than by the member for Watson. While it was an error and certain action should have followed, it is absolutely a ruling which says that you are going to put him out under standing order 304A. That implies a ruling that it is disorderly to seek to raise a point of order, because you could not warn him under standing order 304A if you were not ruling that his behaviour was disorderly in seeking to raise a point of order. That is what empowers you to act under 304A: that behaviour is disorderly. You cannot just act at whim.The standing order says that if a member is disorderly in his behaviour you can act under 304A, and you were therefore interpreting what we regard as a very fundamental right of members, and which I would have thought until today government members thought was a fundamental right because some of them exercise it very often—to stand and raise a point of order—and they do it persistently, provocatively, tediously and wrongly. But you have never said, `If the member for Parramatta raises a point of order, out you go,' nor should you, Mr Speaker.I have to say that if there is one person in this House who by way of points of order goes pretty close to disorderly behaviour, we would have thought the member for Parramatta was a long way ahead of the member for Watson. He has been, from the time he came here, consistently raising points of order—and has not got one right. But the standing orders, as quoted by the Leader of the Opposition, and House of Representatives Practice as quoted by the Leader of the Opposition, combine to make it crystal clear that the right that the member for Watson was seeking to exercise was far from being an exercise in disorderly conduct which warranted you warning him, as you did, that if he sought to take another point of order he would be suspended. In fact, you once again said `named', but we know that you meant `suspended' under 304A. Far from it being disorderly, it was a basic exercise of his right.What was the member for Watson trying to do? He was, as the Leader of the Opposition correctly points out, trying to point out that this is the worst Leader of the House in our history. He has failed to pursue the point which he should have pursued following on from that which you raised. He was seeking to raise a point of order, saying, `How are we to discern your intention, Mr Speaker, when you say one thing and do another?' You say to us and to the member for Watson, `It was clear that my intention was not to do what I said but to do what I meant.' That may be true, and we accept that it is true, but it is not disorderly for the member for Watson to say, `But, Mr Speaker, you actually said something which would have triggered a different standing order: 303 or 306, not 304A.' That is quintessentially a point of order—that you were proposing to proceed under one standing order and then proceeded under another. You may have chosen, after hearing his point of order, to say—Government members interjecting—10000SPEAKERMr SPEAKER—The member for Fraser has the call.5I4McMullan, Bob, MPMr McMULLAN—Thank you very much. I will just offer him a copy of House of Representatives Practice . He obviously has not read it. He has this provision which says he does not need to know the standing orders because he has the numbers. That is true, but it does not help. Ignorance of the law is no excuse, but it is frequently exercised.SJ4TUCKEYMr Tuckey—Mr Speaker, I raise a point of order on relevance. The dissent motion is to your ruling, not to something that the Leader of the House has done, yet the current attack is on the Leader of the House.10000SPEAKERMr SPEAKER—The Minister for Forestry and Conservation will resume his seat. The member for Fraser has the call.5I4McMullan, Bob, MPMr McMULLAN—In the order of disorderly points of order the minister beats the member for Watson by a very long way. And I might say, in terms of disorderly behaviour today, he beats the member for Watson by a very long way. The standing order with which we are dealing, standing order 304A, was inserted, as you would know because you were here at the time, to cool down the House. It was inserted in the hope that in times of heat and anxiety for members it would help cool down the House. The excellent then Speaker, the member for Cunningham, said we should have a standing order to help cool down the House. Nobody ever thought that it was going to be used against a member seeking to raise a point of order when the House was not disorderly. The House was much less disorderly than it usually is during question time. It was much quieter than usual.For us, it is unreasonable to the point of intolerable to have a circumstance in which you seek to exercise standing order 304A when a member merely seeks to exercise the very basic, simple right to raise a point of order, particularly in the context where the minister speaking at the time was consistently, persistently and in breach of every standing order continuing to be irrelevant to the question and you were failing to act on that matter in a way that made everybody on this side of the House feel aggravated and anxious. It is surprising that there was not more disorder than there was—let alone that someone should have been suspended for raising a point of order.We have sought to give you the opportunity to develop a manner of conducting this House that will be fair and reasonable and fit the procedures which you wish to establish. We have, I think, been more tolerant than many members on this side of the House think we should have been. But, Mr Speaker, you are making it more than difficult for us—you are making it impossible. And this will not be the last point of order of this nature if it continues. We will have a consistent pattern of points of order on this. I do not know what the Guinness Book of Records is for points of order on matters during question time, but I would be consulting it because this is a very serious concern. I hope the fact that we have the consistent responses and the trivialisation here does not convey to you, Mr Speaker, that we on this side of the House do not take this matter seriously and that this is not bringing to a head a series of significant major concerns which we on this side of the House have. This is not an isolated incident. This is the end of a pattern of concerns which we have had and which we have raised with you.WI4REITHMr Reith—Mr Speaker, I raise a point of order on relevance. The member for Fraser is now claiming that this is but one of a series of serious events, which I must say is news to us. We would be interested to hear what those other events are, but it would not be relevant. On the point of order, the member for Fraser is not entitled to cast reflections on the chair to the extent that such an inference could be drawn from those remarks.10000SPEAKERMr SPEAKER—The member for Fraser will return to the heart of the dissent motion.5I4McMullan, Bob, MPMr McMULLAN—It is exactly relevant for us to be saying that the events which led to this dissent motion took place in a context which caused us grave concern. Whatever happens to the dissent motion, the concern will persist and you should be aware of that. That is why we moved this dissent motion today. It was not done in isolation. We were concerned about the implications of the ruling for every member here and we will be concerned any time anybody is threatened under standing order 304A on the basis of raising a point of order or acting in some other manner consistent with their rights and not in a disorderly manner. We will be concerned and we will air that concern in whatever manner the standing orders make available to us. If we continue to get a pattern of behaviour involving comments about questions or answers or comments from the Deputy Speaker about decisions made with regard to whether or not divisions should be called, we will continue to get a pattern of response from the opposition. That is not the way we want the House to operate, but I can tell you one thing for certain—it is the way it will operate if that behaviour from you and from the Deputy Speaker continues.We do not want the House to operate that way because we prefer to have question time continue. We like to be able to ask questions. We would actually prefer to be able to get answers, but asking questions is the second best option we have to actually getting answers. So we do not want to do it, but we will continue to do it. (Time expired)16:29:001572Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—The government will be rejecting this motion of dissent from the ruling of the Speaker. There is absolutely no basis for it. I would like to take this opportunity to go through the basic proposition that has been put and answer the criticisms. Before I do, Mr Speaker, may I say that, in assessing the first two or three weeks of your speakership, all fair-minded members of this House would agree that you have demonstrated that the person in the Speaker's chair is balanced, fair and reasonable, and gives all members—government, opposition and the Independent—a fair opportunity to speak in the House.Mr Speaker, I congratulate you on your first days as Speaker. You have brought a breath of fresh air to the speakership. It has been widely commented upon, not just by members of the government but by members of the opposition—which is high praise coming from them—and I think any reasonable person would be pleased at the way in which you have exercised your discretion in the time that you have been the Speaker.ET4BEVISMr Bevis—This is relevant to the motion of dissent, is it, Peter?ET4Reith, Peter, MPMr REITH—It is very relevant to the dissent motion. I say that because, Mr Speaker, your dealing with the member for Watson was perfectly fair by any reasonable objective standard. While I will go over the events leading up to his suspension, the fact of the matter is that you warned the member for Watson that his pursuing the matter would be disorderly. He had raised a point of order; you had dealt with the issue; and it was very clear that he was going to continue the debate with the chair. Everybody who has been around for a while could see that—it was very obvious—and you very fairly said to him that you would consider such a pursuit of the issue as disorderly. That is what you said. That is what the Hansard will record.Opposition members interjecting—WI4Reith, Peter, MPMr REITH—I will be looking at the Hansard , of course. But I am saying, Mr Speaker, that it was crystal clear that you warned the member for Watson about his conduct. It was very obvious that, under the guise of a further point of order, he was going to take you on. That is the guts of this whole issue. You could see it, we could see it, and so you said to the member for Watson that he would have to understand that if he wanted to pursue the matter it would obviously be disorderly. He was keen to take the matter on, and you dealt with him accordingly.That is not a ruling or action of the Speaker which is open to a dissent ruling. In fact, standing order 304A gives you complete discretion to expel a member for an hour for disorderly conduct or as you see fit. That is what you did and that is what has happened. In response to that, the Leader of the Opposition has fabricated a dissent motion against a non-existent ruling. I must say, Mr Speaker, that it is evidence of your fairness that you have allowed this motion to proceed. I have heard a lot of dissent motions over the years, and this is the most vacuous one I can recall. It really is a complete nonsense.Mr Speaker, you will notice that some government members are still in the House. They are getting on with the business of government and representing their constituents. The ministers have all gone back to their offices to continue their work. When I have completed my remarks, there will be no further debate on this issue because we do not intend wasting the time of the House any further, nor do we intend that there be any further question time because far too much time has been wasted on this issue.Opposition members interjecting—WI4Reith, Peter, MPMr REITH—If necessary, if you want to deprive members of the opportunity to speak—but we will not be wasting further time on the shenanigans of the opposition. This is vacuous, empty and a complete waste of time, and it ought to be treated as such. I am not going to stand here and talk for 20 minutes just for the sake of filling 20 minutes. I am going to answer all the points, but I will not be speaking for the sake of speaking—which is what happened with the speeches from the Leader of the Opposition and the member for Fraser.To canvass the circumstances of this particular matter, the sequence of events started with the interjections by the member for Burke. He was interjecting when you, Mr Speaker, were on your feet. That was clearly disorderly, and it was quite within your discretion to deal with the member for Burke. When you used the words `name him', I took that to be the first words for moving on to standing order 304A.Opposition members interjecting—WI4Reith, Peter, MPMr REITH—There is an answer to that. The Leader of the Opposition said, `It was naming; therefore, as the Leader of the House, you should have moved the supporting motion.' Mr Speaker, I was obviously contemplating that, but it has been the practice in this place for some time that Speakers in a circumstance such as that would go to standing order 304A. Anybody who has been here for more than a couple of weeks would know that. Whatever words you used, Mr Speaker, you are entitled to use any words you like—including the word `named'—but, in my view, you were most likely to move to a 304A suspension for an hour. To me, that would be a reasonable expectation. Given the fact that, with a momentary pause, you went on to say that, this whole thing is a confected nonsense. That is all you could say of it.If the member for Watson was to be taken at his word, he was saying that it was actually a set of circumstances that warranted the full naming process. We brought in standing order 304A to deal with misdemeanours of that sort. The member for Cunningham was one of the people who initiated that change. In a hierarchy of offences, the offence of the member for Burke, in my view, was clearly a 304A offence. That is obviously how you saw it, Mr Speaker, and that is what you intended to do, and everything that flowed from that really is a complete nonsense.I say to new members that, while loyalty will dictate that you believe everything the Leader of the Opposition has said by way of outrage at this alleged ruling, when you go back to your offices you should appreciate that there has not actually been a ruling. All that happened was that a bloke who was told, `If you pursue this matter, you will be dealt with,' was then dealt with. That is perfectly reasonable, and it is the conventional treatment in the House. Talk about making a mountain out of a molehill! This is a nonsense from start to finish, and it deserves the treatment it will get when the government exercises its majority.The member for Burke was then dealt with under standing order 304A. The member for Watson had a point of order. You heard his point of order and you dealt with it. Then he simply wanted to continue with the issue.DT4CREANMr Crean—It was another one.WI4Reith, Peter, MPMr REITH—He wanted to raise something else; a completely new matter? He wanted to raise a point of order to talk about the weather or about the president's lunch? It was some other issue, was it? We all know the member for Watson very well, and it was quite clear from his demeanour, from what he was saying and from what had already been dealt with by the Speaker that he simply wanted to take the issue further.On that basis, Mr Speaker, you gave him a warning. I thought, quite frankly, you were more than fair to the member for Watson. Arguably, you could have dealt with him the first time around. But, because you had been bending over backwards to give them a fair hearing, you gave him a fair hearing. You dealt with the issue. He raised the question of the naming and the use of standing order 304A. You responded by stating what was obvious to anybody here, what your intentions were, in conformity with the practice of the House as it has grown up in recent times. You acted reasonably by any objective measure. He simply wanted to contest it.I must say that it is not obvious to me why you people wanted to have a hullabaloo over nothing today. Had you run out of questions or something? Did you feel that you were being too vulnerable to a Kemp attack? Was that the worry? Were they worried that the Treasurer would come back and give them another going-over? Were they worried that I would get another question?10000SPEAKERMr SPEAKER—The Leader of the House will return to the motion.WI4Reith, Peter, MPMr REITH—Or were they just acting out the resolution of the caucus back in 1997?10000SPEAKERMr SPEAKER—The Leader of the House will return to the motion.WI4Reith, Peter, MPMr REITH—I will return to the motion. In responding to this motion of dissent it is fair enough to ask what actually is the motive of the opposition. There is no discernible, obvious, clear basis on which they would move a motion of dissent. I think it is fair enough to ask what other possible reason they could have for moving such a motion of dissent. We don't have a ruling. They don't have a case. You warned the member for Watson before dealing with him. You have a complete discretion under standing order 304A. The Labor Party supported standing order 304A as a reasonable change to the standing orders. They put it in and we supported them. It is a reasonable means of dealing with people whose offence is not a hanging offence but a misdemeanour which should be dealt with. The sin bin for an hour is a reasonable proposition. It has had a judicious amount of use in the time since it was introduced, and today was yet another example.I think we have graced this motion of dissent with more than enough time, but I wanted to make one last point just to reflect on the circumstances. It is a nonsense to say that this is a demonstration of the government not supporting the Speaker. There has been one such example, but it certainly was not today. The one example, of course, was when the Labor Party was in office. Jim Cope was the Speaker, Clyde Cameron was the offender and Fred Daly was the Leader of the House. When he went to move the naming motion, Gough told him not to, and so you saw the tearing down of an independent Speaker.DT4CREANMr Crean—I raise a point of order, Mr Speaker. It goes to the relevance of the minister's contribution, which is clearly off key. If he wants to go for clarification about not supporting Speakers, turn to John Winston Howard and Halverson.10000SPEAKERMr SPEAKER—The member for Hotham knows that he cannot continue along that line. Furthermore, I would have thought that, among the great deal of irrelevance that I have heard on both sides this afternoon, the concluding remarks of the Leader of the House were in fact by that measure relevant.WI4Reith, Peter, MPMr REITH—I conclude by saying that this motion is just a complete waste of time. There was no ruling; it is a non-existent ruling. It has been fabricated by the opposition. The discretion that you exercised was one which is available to you under standing order 304A. You dealt very fairly with the member. You gave him a warning. This whole thing has been blown up for the purposes of the opposition. Under those circumstances, we will obviously oppose the motion put forward by the Leader of the Opposition. We will then close off question time, close off the MPI and get back to something that is important, which is the new tax system, which is currently before the House. I move:That the question be now put. Question put:16:47:00The House divided. (Mr Speaker—Mr Neil Andrew)75Abbott, A. J. Anderson, J. D.Andrews, K. J. Anthony, L. J.Bailey, F. E. Baird, B. G.Barresi, P. A. Bartlett, K. J.Billson, B. F. Bishop, B. K.Bishop, J. I. Brough, M. T.Cadman, A. G. Cameron, R. A.Causley, I. R. Charles, R. E.Costello, P. H. Downer, A. J. G.Draper, P. Elson, K. S.Entsch, W. G. Fahey, J. J.Fischer, T. A. Forrest, J. A. *Gallus, C. A. Gambaro, T.Gash, J. Georgiou, P.Haase, B. W. Hardgrave, G. D.Hawker, D. P. M. Hockey, J. B.Hull, K. E. Jull, D. F.Kelly, D. M. Kemp, D. A.Lawler, A. J. Lieberman, L. S.Lindsay, P. J. Lloyd, J. E.Macfarlane, I. E. May, M. A.McArthur, F. S. *McGauran, P. J.Moore, J. C. Moylan, J. E.Nairn, G. R. Nehl, G. B.Nelson, B. J. Neville, P. C.Nugent, P. E. Prosser, G. D.Pyne, C. M. Reith, P. K.Ronaldson, M. J. C. Ruddock, P. M.Schultz, A. J. Scott, B. C.Secker, P. D. Slipper, P. N.Somlyay, A. M. Southcott, A. J.St Clair, S. R.Stone, S. N.Sullivan, K. J. Thompson, C. P.Thomson, A. P. Truss, W. E.Tuckey, C. W. Vaile, M. A. J.Vale, D. S. Wakelin, B. H.Washer, M. J. Williams, D. R.Worth, P. M.64Adams, D. G. H. Albanese, A.Beazley, K. C. Bevis, A. R.Brereton, L. J. Burke, A. E.Cox, D. Crean, S. F.Crosio, J. A. Danby, M.Edwards, G. J. Ellis, A. L.Emerson, C. Evans, M. J.Ferguson, L. D. T. Ferguson, M. J.Fitzgibbon, J. A. Gerick, J.Gibbons, S. W. Gillard, J. E.Griffin, A. P. Hall, J. G.Hatton, M. J. Hoare, K. J.Hollis, C. Irwin, J.Kernot, C. Kerr, D. J. C.Latham, M. W. Lawrence, C. M.Lee, M. J.Livermore, K. F.Macklin, J. L. Martin, S. P.McClelland, R. B. McFarlane, J. S.McLeay, L. B. McMullan, R. F.Melham, D. Morris, A. A.Mossfield, F. W. Murphy, J. P.O'Byrne, M. A. O'Connor, G. M.O'Keefe, N. P. Plibersek, T.Price, L. R. Quick, H. V.Ripoll, B. F. Roxon, N. L.Rudd, K. M. Sawford, R. W. *Sciacca, C. A. Sercombe, R. C. G. *Sidebottom, P. S. Smith, S. F.Snowdon, W. E. Swan, W. M.Tanner, L. J. Theophanous, A. C.Thomson, K. J. Wilkie, K.Wilton, G. S. Zahra, C. J.Kelly, J. M. Jenkins, H. A.* denotes tellerQuestion so resolved in the affirmative. Original question put: That the Speaker's ruling be dissented from.16:54:00The House divided. (Mr Speaker—Mr Neil Andrew)64Adams, D. G. H. Albanese, A.Beazley, K. C. Bevis, A. R.Brereton, L. J. Burke, A. E.Cox, D. Crean, S. F.Crosio, J. A. Danby, M.Edwards, G. J. Ellis, A. L.Emerson, C. Evans, M. J.Ferguson, L. D. T. Ferguson, M. J.Fitzgibbon, J. A. Gerick, J.Gibbons, S. W. Gillard, J. E.Griffin, A. P. Hall, J. G.Hatton, M. J. Hoare, K. J.Hollis, C. Irwin, J.Kernot, C. Kerr, D. J. C.Latham, M. W. Lawrence, C. M.Lee, M. J.Livermore, K. F.Macklin, J. L. Martin, S. P.McClelland, R. B. McFarlane, J. S.McLeay, L. B. McMullan, R. F.Melham, D. Morris, A. A.Mossfield, F. W. Murphy, J. P.O'Byrne, M. A. O'Connor, G. M.O'Keefe, N. P. Plibersek, T.Price, L. R. Quick, H. V.Ripoll, B. F. Roxon, N. L.Rudd, K. M. Sawford, R. W. *Sciacca, C. A. Sercombe, R. C. G. *Sidebottom, P. S. Smith, S. F.Snowdon, W. E. Swan, W. M.Tanner, L. J. Theophanous, A. C.Thomson, K. J. Wilkie, K.Wilton, G. S. Zahra, C. J.75Abbott, A. J. Anderson, J. D.Andrews, K. J. Anthony, L. J.Bailey, F. E. Baird, B. G.Barresi, P. A. Bartlett, K. J.Billson, B. F. Bishop, B. K.Bishop, J. I. Brough, M. T.Cadman, A. G. Cameron, R. A.Causley, I. R. Charles, R. E.Costello, P. H. Downer, A. J. G.Draper, P. Elson, K. S.Entsch, W. G. Fahey, J. J.Fischer, T. A. Forrest, J. A. *Gallus, C. A. Gambaro, T.Gash, J. Georgiou, P.Haase, B. W. Hardgrave, G. D.Hawker, D. P. M. Hockey, J. B.Hull, K. E. Jull, D. F.Kelly, D. M. Kemp, D. A.Lawler, A. J. Lieberman, L. S.Lindsay, P. J. Lloyd, J. E.Macfarlane, I. E. May, M. A.McArthur, F. S. *McGauran, P. J.Moore, J. C. Moylan, J. E.Nairn, G. R. Nehl, G. B.Nelson, B. J. Neville, P. C.Nugent, P. E. Prosser, G. D.Pyne, C. M. Reith, P. K.Ronaldson, M. J. C. Ruddock, P. M.Schultz, A. J. Scott, B. C.Secker, P. D. Slipper, P. N.Somlyay, A. M. Southcott, A. J.St Clair, S. R.Stone, S. N.Sullivan, K. J. Thompson, C. P.Thomson, A. P. Truss, W. E.Tuckey, C. W. Vaile, M. A. J.Vale, D. S. Wakelin, B. H.Washer, M. J. Williams, D. R.Worth, P. M.Jenkins, H. A. Kelly, J. M.* denotes tellerQuestion so resolved in the negative.WI4REITHMr Reith—Mr Speaker, I ask that further questions be placed on the Notice Paper .MG4LEEMr Lee—I raise a point of order, Mr Speaker. The minister for education had not finished his answer. How can the Leader of the House ask that further questions be placed on notice when the minister had not finished his answer?10000SPEAKERMr SPEAKER—The member for Dobell will resume his seat.Auditor-General's Reports157715771577Mr SPEAKERMr SPEAKER10000PON/A10—I present the following Auditor-General's audit reports for 1998-99: No. 18—Performance audit—Accounting for Aid—The Management of Funding to Non-Government Organisations—Australian Agency for International Development (AusAID), No. 19—Performance audit—The Planning of Aged Care—Department of Health and Aged Care and No. 20—Financial statement audit—Audits of the Financial Statements of Commonwealth Entities for the Period Ended 30 June 1998 .Ordered that the reports be printed.Documents15771577Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—Papers are tabled as listed in the schedule circulated to honourablemembers. Details of the papers will be recorded in the Votes and Proceedings and Hansard .The schedule read as follows—Australian Nuclear Science and Technology Organisation Act—Nuclear Safety Bureau—Report NSB.QRM 43,for period 1 April to 30 June 1998.Commonwealth Authorities and Companies Act—Australian Horticultural Corporation—Report for 1997-98.Australian Tourist Commission—Report for 1997-98.Cotton Research and Development Corporation—Report for 1997-98.Grains Research and Development Corporation—Report for 1997-98.National Standards Commission—Report for 1997-98.Copyright Act—Audio-Visual Copyright Society Ltd—Report for 1997-98.Health Services Australia—Statement of corporate intent 1998-2000. Housing Loans Insurance Act—Housing Loans Insurance Corporation—Report for period 1 July to 12 December 1997.Industry Research and Development Act—Industry Research and Development Board—Report for 1997-98.Local Government (Financial Assistance) Act—National Office of Local Government—Report for 1997-98.Public Service Act—Australian Competition and Consumer Commission—Report for 1997-98.Snowy Mountains Hydro-electric Authority—Statement of corporate intent 1998-99.Stevedoring Levy (Collection) Act—Report for 1997-98.Telecommunications Act 1997—Australian Communications Authority—Telecommunications performance report for 1997-98.Department of Communications, Information Technology and the Arts—Putting Cables Underground Working Group—Report—Review of options for placing facilities underground.Motion (by Mr Reith) proposed:That the House take note of the following paper:Public Service Act—Australian Competition and Consumer Commission—Report for 1997-98.Debate (on motion by Mr McMullan) adjourned.1577Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—I present a paper on the following subject, being a petition which is not in accordance with the standing and sessional orders of the House:Request to allow commencement of the phasing out of battery hen egg production and sales within the Australian Capital Territory from the member for Dunkley—52 petitioners.Requests the government to consider refunding JEPT Youth Services Program or provide alternative funding for services for Youth in the Corio/Norlane area from the member for corio—950 petitioners.Matters of Public Importance1577157710000SPEAKERMr SPEAKER—I have received a letter from the honourable member for Jagajaga proposing that a definite matter of public importance be submitted to the House for discussion, namely:The failure of the government to develop long term policies to deliver properly resourced public health services complemented by a well regulated and efficient private health sector.I call upon those members who approve of the proposed discussion to rise in their places.More than the number of members required by the standing orders having risen in their places— Motion (by Mr Reith ) put: That the business of the day be called on.17:06:00The House divided. (Mr Speaker—Mr Neil Andrew)75Abbott, A. J. Anderson, J. D.Andrews, K. J. Anthony, L. J.Bailey, F. E. Barresi, P. A.Bartlett, K. J. Billson, B. F.Bishop, B. K. Bishop, J. I.Brough, M. T. Cadman, A. G.Cameron, R. A. Causley, I. R.Charles, R. E. Costello, P. H.Draper, P. Elson, K. S.Entsch, W. G. Fahey, J. J.Fischer, T. A. Forrest, J. A. *Gallus, C. A. Gambaro, T.Gash, J. Georgiou, P.Haase, B. W. Hardgrave, G. D.Hawker, D. P. M. Hockey, J. B.Hull, K. E. Jull, D. F.Katter, R. C. Kelly, D. M.Kemp, D. A. Lawler, A. J.Lieberman, L. S. Lindsay, P. J.Lloyd, J. E.Macfarlane, I. E.May, M. A. McArthur, F. S. *McGauran, P. J. Moore, J. C.Moylan, J. E. Nairn, G. R.Nehl, G. B. Nelson, B. J.Neville, P. C. Nugent, P. E.Prosser, G. D. Pyne, C. M.Reith, P. K. Ronaldson, M. J. C.Ruddock, P. M. Schultz, A. J.Scott, B. C. Secker, P. D.Slipper, P. N. Somlyay, A. M.Southcott, A. J. St Clair, S. R.Stone, S. N. Sullivan, K. J.Thompson, C. P. Thomson, A. P.Truss, W. E. Tuckey, C. W.Vaile, M. A. J. Vale, D. S.Wakelin, B. H. Washer, M. J.Williams, D. R. Wooldridge, M. R. L.Worth, P. M.65Adams, D. G. H. Albanese, A.Beazley, K. C. Bevis, A. R.Brereton, L. J. Burke, A. E.Cox, D. Crean, S. F.Crosio, J. A. Danby, M.Edwards, G. J. Ellis, A. L.Emerson, C. Evans, M. J.Ferguson, L. D. T. Ferguson, M. J.Fitzgibbon, J. A. Gerick, J.Gibbons, S. W. Gillard, J. E.Griffin, A. P. Hall, J. G.Hatton, M. J. Hoare, K. J.Hollis, C. Irwin, J.Jenkins, H. A. Kernot, C.Kerr, D. J. C. Latham, M. W.Lawrence, C. M. Lee, M. J.Livermore, K. F. Macklin, J. L.Martin, S. P. McClelland, R. B.McFarlane, J. S. McLeay, L. B.McMullan, R. F. Melham, D.Morris, A. A. Mossfield, F. W.Murphy, J. P. O'Byrne, M. A.O'Connor, G. M. O'Keefe, N. P.Plibersek, T. Price, L. R.Quick, H. V. Ripoll, B. F.Roxon, N. L. Rudd, K. M.Sawford, R. W. *Sciacca, C. A.Sercombe, R. C. G. *Sidebottom, P. S.Smith, S. F. Snowdon, W. E.Swan, W. M. Tanner, L. J.Theophanous, A. C. Thomson, K. J.Wilkie, K. Wilton, G. S.Zahra, C. J.Kelly, J. M. Horne, R.* denotes tellerQuestion so resolved in the affirmative.Bills1578r631Message received from the Senate returning the bill and acquainting the House that the Senate has agreed to the amendment made by the House.Bills1578The following bill was returned from the Senate without amendment or request: Wool International Amendment Bill 1998 Committees157915791579Mr DEPUTY SPEAKERMr DEPUTY SPEAKER10000PON/A10—Mr Speaker has received a message from the Senate acquainting the House that the Senate concurs with the resolutions of the House relating to the appointment of the following joint committees:Native Title and the Aboriginal and Torres Strait Islander Land Fund;National Crime Authority;Corporations and Securities;Electoral Matters;Foreign Affairs, Defence and Trade;Migration;National Capital and External Territories; andTreaties.Bills1579s1901579Bill received from the Senate, and read a first time.Ordered that the second reading be made an order of the day for the next sitting.Committees1579157917:13:001579Reith, Peter, MPMr REITHWI4FlindersLPWorkplace Relations and Small Business10—I move:That members be appointed as members of certain committees in accordance with the schedule which has been circulated.As the list is a lengthy one, I do not propose to read the list to the House. Details will be recorded in the Votes and Proceedings .The schedule read as follows—PROPOSED COMMITTEE MEMBERSHIP COMMITTEEMEMBERSHIPSTANDINGAboriginal and Torres Strait Islander AffairsMrs Draper, Mr Haase, Ms Hoare, Mr Katter, Mr Lieberman, Mr Lloyd, Mr Melham, Mr Quick, Mr Snowdon, Mr Wakelin, Communications, Transport and the ArtsMr Gibbons, Mr Hardgrave, Mr Hollis, Mr Jull, Mr Lindsay, Mr McArthur, Mr Mossfield, Mr Murphy, Mr Neville, Mr St Clair,Economics, Finance and Public AdministrationMr Albanese, Ms Burke, Ms Gambaro, Mr Hawker, Mrs Hull, Mr Latham, Mr Pyne, Mr Somlyay, Dr Southcott, Mr WiltonEmployment, Education and Workplace RelationsMr Barresi, Mr Bartlett, Dr Emerson, Ms Gambaro, Mrs Gash, Ms Gillard, Mr Katter, Dr Nelson, Mr Sawford, Mr WilkieEnvironment and HeritageMr Barresi, Mr Bartlett, Mr Billson, Mr Causley, Mrs Gallus, Ms Gerick, Mrs Irwin, Mr Jenkins, Dr Lawrence, Mrs D.S. ValeFamily and Community AffairsMr K. J. Andrews, Mr Edwards, Ms Ellis, Mrs Elson, Ms Hall, Mrs D.M. Kelly, Dr Nelson, Mr Quick, Mr Schultz, Mr WakelinIndustry, Science and ResourcesMr Baird, Mr Hatton, Mr Lawler, Mr Lloyd, Mr Morris, Mr Nairn, Mr Prosser, Ms Roxon, Dr Washer, Mr Zahra Legal and Constitutional AffairsMr K.J. Andrews, Ms J.I. Bishop, Mr Cadman, Mr Kerr, Ms Livermore, Mr Mossfield, Ms Roxon, Mr St Clair, Mrs D.S. ValePrimary Industries and Regional ServicesMr Adams, Mr Andren, Mrs Bailey, Mr Horne, Mr Katter, Mrs D.M. Kelly, Mr I.E. Macfarlane, Mr McLeay, Mr Nairn, Mr Secker, Mr Sidebottom, Mr C.P. Thompson, HouseMr Charles, Mr Hollis, Mr McLeay, Mr Nehl, Mr Sawford, Mr SomlyayLibraryMr Adams, Mr L.D.T. Ferguson, Ms Hoare, Mr Lawler, Mr I.E. Macfarlane, Dr WasherMembers' InterestsMr K.J. Andrews, Mrs Crosio, Mr Jenkins, Mr Neville, Mr Nugent, Mr O'Keefe, Mr SomlyayProcedureMr Cameron, Mr M.J. Ferguson, Mr Forrest, Mrs Gash, Ms Gerick, Mr Price, Mr Pyne PrivilegesMr K.J. Andrews, Mr Danby, Mr McLeay, Mrs May, Mr Jull, Mr Neville, Mr Sawford, Mr Sercombe, Mr SomlyayPublicationsMr G Hardgrave, Mrs Hull, Mr Lieberman, Mr Lloyd, Mrs J.F. McFarlane, Mr Neville, Mr Rudd, Mr SidebottomJOINT STANDING COMMITTEESElectoral MattersMr Danby, Mr L.D.T. Ferguson, Mr Forrest, Mr Nairn, Mr SomlyayForeign Affairs, Defence and TradeMrs Bailey, Mr Baird, Mr Brereton, Mr G.J. Evans, Mr Hawker, Mr Hollis, Mr Jull, Mrs D.M. Kelly, Mr Lieberman, Mr Martin, Ms Moylan, Mr Nugent, Mr O'Keefe, Mr Price, Mr Prosser, Mr Pyne, Mr Snowdon, Dr Southcott, Dr Theophanous, Mr A.P. ThomsonMigrationMr Baird, Mrs Gallus, Mrs Irwin, Mrs May, Mr Ripoll, Dr TheophanousNational Capital and External TerritoriesMr Cameron, Ms Ellis, Mr Neville, Mr Snowdon, Mr SomlyayTreatiesMr Adams, Mr Baird, Mr Bartlett, Mrs Crosio, Mrs Elson, Mr L.D.T. Ferguson, Mr Hardgrave, Mrs D.M. Kelly, Mr A.P. ThomsonJOINT STATUTORYBroadcasting of Parliamentary ProceedingsMr Adams, Mr Forrest, Mrs Gash, Mr Lindsay, Mr MorrisCorporations and SecuritiesMr Cameron, Mr Rudd, Mr Sercombe, Dr SouthcottNational Crime AuthorityMr Edwards, Mr Hardgrave, Mr Kerr, Mr Nugent, Mr Somlyay, Native Title and the Aboriginal and Torres Strait Islander Land FundMr Causley, Mr Haase, Mr Melham, Mr Secker, Mr SnowdonPublic Accounts and AuditMr K.J. Andrews, Mr Brough, Mr Charles, Mr Cox, Mr Georgiou, Ms Gillard, Mr Griffin, Ms Plibersek, Mr St Clair, Mr Somlyay COMMITTEEMEMBERSHIPPublic WorksMrs Crosio, Mr Forrest, Mr Hollis, Mr Lindsay, Ms Moylan, Mr RipollQuestion resolved in the affirmative.15811581Motion (by Mr Reith) proposed:(1) That a Joint Select Committee on the Retailing Sector be appointed to inquire into and report on:(a) the degree of industry concentration within the retailing sector in Australia, with particular reference to the impact of that industry concentration on the ability of small independent retailers to compete fairly in the retail sector;(b) overseas developments with respect to this issue, highlighting approaches adopted in OECD economies; and(c) possible revenue-neutral courses of action by the Federal Government (ie courses of action that do not involve taxation reform).(2) That the committee consist of 10 members, 3 Members of the House of Representatives to be nominated by the Government Whip or Whips, 2 members of the House of Representatives to be nominated by the Opposition Whip or Whips or by any Independent Member, 2 Senators to be nominated by the Leader of the Government in the Senate, 1 Senator to be nominated by the Leader of the Opposition in the Senate and 2 Senators to be nominated by any minority group or groups or independent Senator or Senators.(3) That every nomination of a member of the committee be forthwith notified in writing to the President of the Senate and the Speaker of the House of Representatives.(4) That the members of the committee hold office as a joint select committee until completion of the joint committee's report.(5) That the committee elect a Government member as its chair.(6) That the committee elect a deputy chair who shall act as chair of the committee at any time when the chair is not present at a meeting of the committee and at any time when the chair and deputy chair are not present at a meeting of the committee the members present shall elect another member to act as chair at that meeting. (7) That, in the event of an equality of voting, the chair, or the deputy chair when acting as chair, shall have a casting vote.(8) That 3 members of the committee constitute a quorum of the committee.(9) That the committee have power to appoint subcommittees consisting of 3 or more of its members and to refer to any subcommittee any matter which the committee is empowered to examine.(10) That the committee appoint the chair of each subcommittee who shall have a casting vote only and any time when the chair of a subcommittee is not present at a meeting of the subcommittee of the members of the subcommittee present shall elect another member of that subcommittee to act as chair at that meeting.(11) That the quorum of a subcommittee be 2 members of that subcommittee.(12) That members of the committee who are not members of a subcommittee may participate in the proceedings of that subcommittee but shall not vote, move any motion or be counted for the purpose of a quorum.(13) That the committee or any subcommittee have power to send for persons, papers and records.(14) That the committee or subcommittee have power to move from place to place.(15) That a subcommittee have power to adjourn from time to time and to sit during the adjournment of the Senate and the House of Representatives.(16) That the committee report no later that 6 months after this resolution is agreed to by both the Senate and the House of Representatives.(17) That the committee or any subcommittee have power to consider and make use of the evidence and records of the House of Representatives Standing Committees on Industry, Science and Technology and the Senate Economics References Committees appointed during previous Parliaments.(18) That the foregoing provisions of this resolution, so far as they are inconsistent with the standing orders, have effect notwithstanding anything contained in the standing orders.(19) That a message be sent to the Senate acquainting it of this resolution and requesting that it concur and take action accordingly.17:14:001582Fitzgibbon, Joel, MPMr FITZGIBBON8K6HunterALP00—As this was originally a Labor initiative, the House will not be surprised to learn that the opposition welcomes the establishment of this inquiry and the establishment therefore of a joint select committee to look into issues of market dominance in the retail sector. We are, however, less than happy about the make-up of the committee. While it provides for the membership of two Labor members in the House, it provides for only one Labor senator, which means that it will be five-all on the committee, and the terms of reference provide for the chairman of that committee—which, of course, will be a member of the government—to have a casting vote. We are not happy with that, but we will leave that for our colleagues in the Senate.Honourable member interjecting—8K6Fitzgibbon, Joel, MPMr FITZGIBBON—It does not reflect our representation in the Senate. But we are satisfied with the scope of the terms of reference and we look forward to a very productive inquiry on an issue very important to the small business sector.Question resolved in the affirmative.1582158217:16:001582Slipper, Peter, MPMr SLIPPER0V5FisherLP10—I move:That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: Lavarack Barracks Redevelopment Stage 2, Townsville.This proposal was referred to the Public Works Committee on 29 June 1998, but the reference lapsed when the previous committee ceased to exist with the proroguing of parliament on 30 August 1998.17:17:001582Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—I have pushed very strongly for this reference. It is a $139 million redevelopment of Lavarack Barracks. Lavarack Barracks is the home of Australia's ready deployment force. It is the sharpest of the sharp ends of the Australian Defence Forces.0V5SLIPPERMr Slipper—It wouldn't be happening without you, would it?HK6Lindsay, Peter, MPMr LINDSAY—Thank you, Mr Parliamentary Secretary. It is something that is long overdue. The accommodation there for the soldiers is just abysmal. With a lot of support and help from the former Minister for Defence and the former Minister for Defence Industry, Science and Personnel, this matter has come to this stage. I will welcome the Public Works Committee's positive recommendation to get this project moving. There is money in this year's budget, and I would like to see a start this year if we can.Question resolved in the affirmative.1582158217:18:001582Slipper, Peter, MPMr SLIPPER0V5FisherLP10—I move:That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: CSIRO Queensland Centre for Advanced Technologies Stage 2 Development, Pinjarra Hills, Qld.This proposal was referred to the Public Works Committee on 8 April 1998, but the reference lapsed when the previous committee ceased to exist when parliament was prorogued on 30 August 1998.Question resolved in the affirmative.1582158217:19:001582Slipper, Peter, MPMr SLIPPER0V5FisherLP10—I move:That, in accordance with the provisions of the Public Works Committee Act 1969, the following proposed work be referred to the Parliamentary Standing Committee on Public Works for consideration and report: CSIRO National Centre for Petroleum and Mineral Resources Research, Bentley, WA. This proposal was referred to the previous Public Works Committee on 29 June 1998, but the reference lapsed when the committee ceased to exist when parliament was prorogued on 30 August 1998.Question resolved in the affirmative.Miscellaneous158310000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—I advise the House that the Deputy Speaker has fixed Wednesday, 9 December 1998, at 10 a.m., as the time for the next meeting of the Main Committee, unless an alternative day or hour is fixed.Committees1583158315831583Nehl, Garry, MPMr NEHLAE4CowperNP10—I present the report of the Selection Committee relating to the consideration of committee and delegation reports and private members business on Monday, 8 February 1999. The report will be printed in today's Hansard and the items accorded priority for debate will be published in the Notice Paper for the next sitting.The report read as follows—Report relating to the consideration of committee and delegation reports and private Members' business on Monday, 8 February 1999Pursuant to standing order 331, the Selection Committee has determined the order of precedence and times to be allotted for consideration of committee and delegation reports and private Members' business on Monday, 8 February 1999. The order of precedence and the allotments of time determined by the Committee are shown in the list.PRIVATE MEMBERS' BUSINESSOrder of precedenceNotices1Mr Neville to move:That this House:(1) draws the attention of the Government to the condition of the national rail track;(2) commends the Government for its commitment of $250 million to rail infrastructure but asks that it be expanded;(3) calls for the declaration of national rail highway from Brisbane to Perth; and(4) seeks removal of impediments to a seamless interstate rail system. Time allotted—45 minutes.Speech time limits—Mover of motion—10 minutes.First Opposition Member speaking—10 minutes.Other Members—5 minutes each.The Committee determined that consideration of this matter should continue on a future day.2Ms Hoare to move:That the House:(1) reverts to the previous sitting arrangements introduced in 1994, which were abandoned by this Government in 1996, to allow for a more family-friendly workplace;(2) notes the increased number of Members since the election, on both sides of the House, who have young families and/or recently formed partnerships;(3) also notes the hundreds of Members' staff who are required to be here to work while the House sits until 11 p.m. on Monday and Tuesday evenings and the effect that these absurd working hours has on their families and private lives; and(4) also notes that if it were to revert to the previous sitting pattern which includes sitting from the day's commencement through until adjournment at 8 p.m. there will be a loss of only three sitting hours per week in the House of Representatives chamber.Time allotted—50 minutes.Speech time limits—Mover of motion—10 minutes.First Government Member speaking—10 minutes.Other Members—5 minutes each.The Committee determined that consideration of this matter should continue on a future day.3Mr Brough to move:That this House:(1) places on record concern about the lack of awareness in the community of prostate cancer;(2) notes that the number of deaths per year ascribed to prostate cancer has nearly doubled, rising from 1355 in 1982 to 2660 in 1996; and(3) calls on the Government to support the designation of one day or week per year as National Prostate Cancer Day/Week as a means of heightening awareness.Time allotted—remaining private Members' business time.Speech time limits—Mover of motion—10 minutes. First Opposition Member speaking—10 minutes.Other Members—5 minutes each.The Committee determined that consideration of this matter should continue on a future day.Bills1584r703Billsr658Billsr667Billsr666Billsr702Billsr699Billsr698Billsr657Billsr697Billsr665Billsr701Billsr663Billsr659Billsr700Billsr664Billsr660BillsBillsBillsBillsBillsBillsBillsBillsBillsBillsBillsBillsBillsBillsBills1584Debate resumed from 7 December, on motion by Mr Costello:That the bill be now read a second time.upon which Mr Crean moved by way of amendment:That all words after "That" be omitted with a view to substituting the following words:"the House:(1) condemns the Government for seeking to introduce a GST which is an unnecessary, unfair, job destroying tax which discriminates against low and middle income earners, the aged and families;(2) condemns the Government for putting at risk the low inflation environment delivered by Labor by proposing to introduce an inflationary GST which will put at risk the low interest rates made possible by low inflation;(3) condemns the Government for placing a higher priority on imposing a GST on Australian families that will make the tax system less equitable, rather than addressing tax avoidance loopholes, which would improve the equity of the tax system;(4) condemns the Government for the hypocrisy of claiming that hidden indirect taxes are unfair merely because they are not separately disclosed to consumers and then proposing a massive new GST which will also be hidden from consumers even though a retail tax can simply be made transparent to consumers; and(5) condemns the Government for granting the GST a higher legislative priority than all of the following related matters which have not as yet been introduced into the Parliament including:(a) those matters listed below which are contingent on the GST package which the Government is hiding from the Australian people and from the Senate Inquiry process such as: (i) the mechanism by which the rate of GST is supposed to be locked in; (ii) the amendments to the Trade Practices Act which will grant the ACCC greater power to police the changeover to the GST regime which the Government claims will result in all of the reductions in Commonwealth and state taxes being passed on to consumers; (iii) excise arrangements for petrol and diesel, involving supposedly retail price neutral shifts in petrol prices and a 25 cent reduction in diesel; (iv) the repeal of the so-called safety net excise arrangements which were implemented after the High Court ruled state business franchise fees to be unconstitutional; (v) the luxury car tax; (vi) the wine equalisation tax; (vii) repeal/Amendment to the Diesel Fuel Rebate Scheme; (viii) the First Home Buyers Scheme; (ix) the guaranteed distribution of GST Revenue to the states; and (x) the $500 million GST start-up package for small business.(b) Those related taxation/equity matters which are not contingent on the GST but which should be made available to the Australian people for their consideration including: (i) providing a Fringe Benefits Tax Exemption for remote area housing provided to employees in the mining industry; (ii) the repeal of Commonwealth Local Government Funding Legislation; (iii) changes to childcare assistance; (iv) excise arrangements for tobacco; (v) the entity taxation regime involving taxing companies, trusts, life insurance etc under one common set of arrangements; (vi) the business taxation measures involving the deferred company tax (ie full franking of all dividends) and the possible changes to the corporate rate and business concessions arrangements; (vii) the new employer withholding arrangements which will replace the PAYE, PPS and RPS systems; (viii) share buy-backs and liquidations; (ix) extending capital gains tax relief and the retirement exemption for small business; (x) limiting the existing Fringe Benefits Tax Exemption for non-profit organisations to $17,000 gross-up value for each employee; (xi) the anti-avoidance legislation addressing complex chains of trusts; (xii) the repeal of provisional tax and the introduction of the new Pay As You Go tax payment arrangements; (xiii) the changes to the timing of company tax arrangements; and (xiv) refundable imputation credits".17:22:001585Swan, Wayne, MPMr SWAN2V5LilleyALP00—I rise to support the Deputy Leader of the Opposition's amendment. This government sings the hymn of families and family values time and time again in this House. But this tax package is violently out of tune with that hymn. It savages the living standards of average working families and battlers. The government chants again and again that older Australians are a priority, yet this package delivers them double taxation and stretched budgets. For families and the aged, getting by will be significantly harder.Let us consider a few simple facts: families will have to pay a 10 per cent tax on everything, on things like food, textbooks, uniforms, shoes, train and bus fares, swimming lessons, electricity—the list is endless. But, according to the Prime Minister, paying a GST on all of those items and more costs families with children only 30c a week more than it costs families without children—only 30c a week; absolutely unbelievable! Pensioners who have paid tax all their working lives will get a lousy $1 a week—not even enough for a can of pet food—over and above what the government would have paid them anyway if the GST had not been introduced. Families and pensioners know that basic grocery items have outstripped the official inflation rate for years and years. But those opposite claim that a 10 per cent GST will produce only a 1.9 per cent price increase for families and pensioners. What a joke! There are many more examples of such stupidity, and I shall come to them in the course of my remarks.Anybody who thought that the decade of greed ended in the 1980s has not analysed this tax package. To put it simply: the gain and the pain are completely and unfairly distributed. This package has only one type of winner, and the winner is this government's favourite minority—the wealthy. How else could anybody possibly explain the swindle that takes place in this package that gives huge benefits to the wealthy at the expense of battling and middle income families. Battling families who are finding it hard to make ends meet will be paying for the tax cuts for the wealthiest section of our community, for the wealthiest 20 per cent of the population. Detailed analysis of the Liberal's tax package shows that more than half of the $13 billion the government plans to hand out in personal income tax cuts will go to the top 20 per cent of income earners. The remaining 80 per cent of Australians will have a share in what is left, which is less than half.So there should be no confusion: the Howard government is proposing to hand out tax cuts to those who need it least. This GST is nothing more than a slush fund for the government's rich friends—nothing more, nothing less. The government is handing tax cuts to those who need it least by slugging ordinary families and the aged. Battling families who are struggling to meet the increased costs of food and bills are now going to have that added to by a GST. The government claims that education, health care and rent are all GST free. But educating children, treating kids when they are sick and keeping a roof over their heads will all cost more under the GST. Coughs, colds, headaches and scrapes and bruises are all going to be taxed. Cough medicine, Panadol, aspirin, cold and flu tablets and bandaids—all of these things—will be taxed. So the GST is patently unfair. It is little wonder that Mr Howard can afford to hand out tax cuts to the rich, because they are being paid for by slugging battling and middle income parents with a new tax on every aspect of raising a family.Let us take one or two examples in the government's package. Let us look at an average Australian family with two children and both parents earning $20,000 each. According to the government's own figures, which we dispute, this family will be $21.30 a week better off with the government's tax package. As the member for Kingston said in this House the other night, let us look at what the Prime Minister wants to do for a family with two children where each parent is earning not $20,000 but $75,000, probably half the income the Minister for Financial Services and Regulation, who is at the table, was earning before he came to this chamber. The tax cut for that family, where the parents are earning $75,000 each or $150,000 a year, is not $21.30 a week, as it was for the family on $40,000, but a whopping $137 a week. That is why the GST has been set at 10 per cent and put on practically everything—because those tax cuts for that family are being paid for by middle income and battling families in this country.The English Conservative Prime Minister Disraeli more than 100 years ago coined the phrase, `Lies, damn lies and statistics.' The hit-and-run pseudoarguments peddled for the GST by the Howard-Costello team are littered with the kinds of figures Disraeli had in mind. These statistics have been manipulated to bamboozle people about the impact of the GST on working Australians, and especially families. Shonky figures have been repeated again and again. Shonky figures have been repeated to deceive the public into believing that the rip-off of the 10 per cent GST every time someone young or old buys food will somehow be offset by cuts in sales tax on items like tissue paper so that, in the end, prices in the consumer price index will go up by only 1.9 per cent. A 10 per cent GST, but prices up by only 1.9 per cent.This suspiciously precise figure has been peddled around, recycled and repeated like some sort of Hare Krishna chant, which I am sure the minister opposite is familiar with. It is an average, nothing more. It is nothing but an average reached by Treasury for calculating the estimates of price changes flowing from the GST in 12 broad categories, as shown in the government's figures. The government's own figures show that food prices will go up by around six per cent, with similar increases for fuel and power, while clothing and footwear are set to increase by around 6½ per cent. These averages disguise an important detail, the most important of which is that battlers and families spend a much higher proportion of their incomes on goods like food and the other essentials of life, which will all be taxed for the first time. The fact is that a flat consumption tax discriminates against lower income people and people who choose, or who have no choice, more importantly, to consume all their income. That is who it discriminates against.What the government appears to ignore deliberately is that these are categories of goods which are all crucial to the standard of living of these families in which they have no choice. The Liberals tried to disguise this fact by claiming that people on high incomes are gluttons; therefore, taxing food is fair. They are out there eating more food so, somehow, taxing food for everybody is fair. It is clearly a nonsense. The truth is that average income earners will pay a lot more for the necessities of life while luxury items for the rich will get cheaper and cheaper.The shonkiness of the government's figures is demonstrated in its claim that costs will fall—that is, that a lot of costs will come down and we will get to this magic figure of 1.9 per cent, on average, price effect of the GST. But the reductions, to achieve the averaging, assume that somehow, due to the goodness of heart of everybody who is concerned in the process, all retail savings are passed on 100 per cent to the consumer.In the real world, we need only a minute to work out that a 100 per cent pass through will not happen. And, if it does not, then the government's 1.9 per cent claim becomes an empty dream or, more brutally, just propaganda—hence, it is chanted and chanted and chanted. Sure as night follows day, prices will rise well above the average for most families, and the government's compensation measures in social security and income tax cuts simply will not and cannot cover the gap.Take, for example, the cynicism of the government's token compensation for the aged pensioner; it is absolutely breathtaking in its arrogance and indifference. The government has said to the world that a pensioner in the year 2000 will be receiving an extra $400 a year as compensation for the GST. But, on examination, this proves to be one of those figures that Disraeli was referring to.Under the requirement that pensions should be tied to 25 per cent of average weekly earnings and CPI changes, most of that $400 will be money that pensioners would have got anyway. Our future wage increases of 3.5 per cent, already factored into budget projections, mean that pensioners would have received an extra $340 a year by then anyway, without a GST and the government's so-called compensation measures. So the net gain, the compensation, to pensioners that year will be about $60 for the year, or about a dollar a week—as I said before, not even enough to buy a can of pet food.But it gets worse. The four per cent increase is not permanent. Pensions, as the government says, will be 1.5 per cent above the inflation rate, or 25 per cent of average weekly earnings. The remaining 2.5 per cent increase is a one-off advance: it is not locked in; its permanency is completely illusory.Having understood that pensioners will get nothing and, indeed, will go backwards, let us look at families. Let us look at one measure that has not seen the light of day. Under the current family allowance income test, no entitlement to the allowance is lost for income earned under the threshold of $23,400, plus $624 for each child after the first child. Each dollar earned over the threshold reduces the allowance by 50c, until the minimum rate of family allowance is reached. This bill proposes to increase the family allowance income test threshold to $28,200, but with no extra amounts for children after the first child. The effect of this measure is that small families benefit more than large families.Take, for example, two families, each of which earns $26,000. One family has one child, while the other family has four children. The family with one child is $1,300 better off, while the family with four children is only $364 better off. Under the government's own figures, bigger families will receive even less benefit. One would think that families with more children need more money than families with fewer children—but not according to this government's tax package.Families understand that this package sneaks money out of their pockets in a hun dred different ways—and we have just seen a perfect example of how the compensation arrangements discriminate against larger families. All of these arrangements are patently anti- family. For families, the basic flaw of the ramshackle so-called compensation package stands out like a Grollo Tower on the landscape of Melbourne—everyone in this country can see it, but the government cannot.The compensation for families is completely inadequate because the government has decided that the GST costs families with children only 30c a week more than it would cost a couple without children on the same income—30c a week. That is how out of touch those opposite are. This is clearly ridiculous and has led Professor Peter McDonald of the ANU to describe the government's position as `completely implausible', completely out of touch—and it is.There is a reason, a very simple reason, for the government wanting to understate the cost impact of the GST on families: the lower the cost impact, the lower the level of compensation that is required. That is why the compensation in this package is completely out of wack with the imposition of the 10 per cent GST across the board and the tax cuts. It is quite obvious that many families do not get what they require out of the compensation measures to compensate for the GST—and they certainly will get nothing like they would have got from Labor's tax credit.The compensation bill before us will increase the family tax initiative, reduce the taper tax on family allowance and increase the threshold at which the allowance starts being withdrawn. But it does not get rid of poverty traps; it most certainly creates many new poverty traps for many families. I do not have time to go into those at the moment, but certainly it creates very severe poverty traps for the two-income family where the second breadwinner is not earning very much—very severe poverty traps. We are taken on a trip down memory lane, with this legislation discriminating against so many women in the work force who have to work on a part-time or casual basis. It takes to them in a very vicious and mean way.There is one final point in relation to families. The tax package contains almost no special compensation for the costs to the parents of children aged 17 years and over—and this is despite the fact that the government's own youth allowance policy has pushed many of these teenagers back into the home because the government has reduced their income support. What the government is trying to do is wipe these children off its books, deny their existence, make them nonpersons, force them into the home, and provide no compensation for the family after the effects of the GST.This package also attacks the massive number of people living in public housing. They pay a proportion of their pension in rent to the state housing authority, usually something like 25 per cent. If the government does not amend the legislation and find a way of making the states do the same, pensioners and others in public housing will lose 25 per cent of their compensation in higher rents.This package also hits the elderly very, very hard. Of course, the GST will reduce the value of whatever savings they have. The government is proposing to compensate older people once for the reduction in value of their long-term savings, but it will do nothing to cover the long-term effect upon their savings. I am speaking of pensioners and self-funded retirees who have saved and paid tax all their lives—done what this government says they should do: work hard, be thrifty. People who have done all that now have a GST and a double taxation of their savings to look forward to—and they are not being compensated properly for it. This is nothing short of double taxation, with a very savage reduction in their lifetime savings. The government's lack of concern about this issue belies the government's self-proclaimed interest in the state of self-funded retirees.In summary, the measures before us today do not compensate Australians for the massive burden that the GST will place on them. For such a massive welfare outlay—and Labor is very concerned about the budget's capacity to sustain such a massive increase in social security outlays—the compensation is still totally inadequate.This is the worst of all worlds: a massive amount of taxpayers' money is spent for very little result. People will be worse off, despite the compensation measures. Poverty will rise. Income inequality will almost certainly widen because of the government's tax package and because of the inequities in the government's compensation measures. More people will become dependent on welfare—again, because of the government's tax package and because of the inequities in the compensation measures. The government will have to keep squeezing taxpayers to pay for this massive and largely ineffective extension of welfare payments. The way it will do that will be inevitably to erode the compensation measures over time and put up the GST, as has occurred in all other countries and particularly in New Zealand.The pattern here is very clear. The Howard government is weak in controlling the strong, and strong in controlling the weak. It has tried to camouflage its agenda by whipping up resentment among ordinary Australians by saying, `Don't look at all the benefits we are providing to the people up there, be resentful about all the people down there. Be resentful about what the unemployed are getting, be resentful about the migrants, be resentful about Aboriginal Australia. Don't look at the inequities in income.'DK6HOCKEYMr Hockey—Your 15 minutes is up.2V5Swan, Wayne, MPMr SWAN—Twenty, sport. The government is saying, `Don't look at the inequities in income that this package is creating, don't look at them at all.'VH4McARTHURMr McArthur—Fifteen minutes.2V5Swan, Wayne, MPMr SWAN—We did not agree on 15 minutes, so keep quiet.Mr Hockey interjecting—2V5Swan, Wayne, MPMr SWAN—We did not agree on 15, it is 20, so pull your head in.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—Order! The minister will stop interjecting. The member for Lilley will ignore the interjections.2V5Swan, Wayne, MPMr SWAN—There can be no doubt that the other effect of this government's agenda will be that they will continue to scapegoat the unemployed, continue to scapegoat migrants.SD4CADMANMr Cadman—Mr Deputy Speaker, I take a point of order. I would like you to draw the member's attention to the fact that he has to address the chair. Comments such as `Pull your head in' are completely out of order.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—I thank the honourable member for Mitchell. The honourable member for Lilley will direct his remarks through the chair. The minister will sit there in silence and cease interjecting.2V5Swan, Wayne, MPMr SWAN—Thank you, Mr Deputy Speaker. I think he has realised the error of his ways. Furthermore, what is the government proposing to do to community organisations which have to pick up the pieces from the scapegoating that this government has been engaged in? They are attacking charities, and particularly their commercial arm. Hall Chadwick Accountants have estimated that the tax and compliance costs of the GST for welfare groups will be between half a billion dollars and $1 billion annually. This will be money lost from essential community services and channelled into the tax coffers.The Society of St Vincent de Paul is concerned that the GST will cripple its ability to deliver services to those most in need. Volunteers of the society visit 300,000 homes around Australia, involving some 500,000 people. The society describes these people in the following terms:From this wide range of visitations in every part of the country we can state categorically that these fellow Australians have very little, if any, discretionary expenditure.The society's view is that it is not simply a matter of excluding food from the GST to make it just and equitable. Exclusions or some form of compensation are needed for the low income group on other essential items, such as clothing, education and health services. I think they summarised this point extremely well when they stated:It is simply unjust and unAustralian if a new regime is introduced which leads to a deterioration in the well being of the 30% of Australians who are on low incomes.One consistent theme that runs right through this package is that this government is taking money from battling Australians, from middle income Australians, and distributing it to the top, whilst at the same time running an agenda particularly against the long-term unemployed, who have had their labour market programs slashed, who have been constantly and continually vilified by the government. They are attacking those groups, pointing to people who are struggling to get by on modest incomes. The government is saying to them, `Take out your anger, take out your resentment, against the system on those groups,' whilst the government is constantly and consistently redistributing wealth from them to the top, to the friends of the Minister for Financial Services and Regulation, who is at the table.I concede that some of those people are very decent people—I would even say that some of them are my friends—but they are people who do not need, deserve or require a huge tax cut. They certainly do not require the tax cuts. If the minister opposite had a lot of poor friends, he would be seeking to change the package, because this package will change this country for the worse. (Time expired)17:42:001590Cadman, Alan, MPMr CADMANSD4MitchellLP10—The comments we have just heard were typical of the campaigning by the Australian Labor Party, which consisted of misrepresentation and lies. The Liberal and National parties were brilliantly led by John Howard and Tim Fischer to a stunning election victory, having proposed a complete change to the tax system in Australia. This change was opposed by the Australian Labor Party, a party which, after 13 years in office, seems to be arguing for a continuation of a personal tax regime which will see the average Aussie paying the highest rate of taxation within the next couple of years. The average Australian is moving, through bracket creep, to a successively higher and higher rate of taxation. Within a short period, the average Australian—not those from the big end of town, not the people referred to by the member for Lilley, but the average Aussie—will be paying the highest rate of taxation.If the Australian Labor Party thinks that it is protecting the battlers and the people who are having a hard time by standing up against the goods and services tax and the change we must have in taxation, it is completely wrong. What it is seeking to do is to continue a system which is punishing people who want to work hard. It is punishing people who want to take that second job, who want to work overtime, who want to improve their lot by taking a promotion. The Australian Labor Party is seeking to continue the regime that punishes those people who need the extra income, those households which have two partners who work, those households which have people holding down three or four jobs. The Australian Labor Party wants to continue to punish, by way of high personal income tax, those people on average earnings.That is not the view of the current government. The current government believes that people on average earnings should not pay more than 30c in the dollar for their tax. It believes that anybody earning from $20,000 to $50,000 a year should not pay more than 30c in the dollar. The government is saying that it is allowing people to take the second job, to earn overtime and to take a promotion, and they should gain the benefit of that advancement in their pocket. They should not be punished by continuation of the current regime.The Australian Labor Party also is arguing for the continuation of the wholesale sales tax. There is not one suggestion coming forward of a constructive nature. This debate is about obstruction, delay and muck-up of an idea—a policy—which will move Australia ahead. And what does the Australian Labor Party want to do? It wants to stall and delay.WU5O'CONNORMr O'Connor—You are with the fairies at the bottom of the garden.SD4Cadman, Alan, MPMr CADMAN—Chum, if you think it is so bad, why don't you let it go through and let it become a mess and a disaster? In that way, you will win the next election without any trouble whatsoever. I put to the House that, if the Australian Labor Party thought it was really bad, they would let this go through without a whimper. The fact is the obstruction and delay, the committees and all of the carry-on are just put in place by the Australian Labor Party to obstruct and delay a reform that is vital and necessary for this nation—a change which will deliver tax cuts of $40 or $50 a week to average families. That is the advantage for the Australian family—$40 or $50 a week. The total cut in personal taxation is $13 billion. There is a package of $2.4 billion to assist families. But the Australian Labor Party, together with its obstruction of the health bills in the Senate which will give rebates of 30 per cent to people who are insured, wants to delay and obstruct this. Part of the reason that it wants to do so is to make the government appear ineffective.I would remind the Australian Labor Party that, as a result of its policy obstruction and delay prior to the last election, we saw the turning of people to a party that neither of us accept—that is to the One Nation Party. Your delay—making this place appear ineffective, making the Senate appear irrelevant—was one of the reasons why the people throughout Australia voted for the One Nation Party. We both reject that proposition. Let me put it to you again: if the Australian Labor Party thinks this is such bad policy for the people of Australia, it should let it through; let it through and let us destroy ourselves. But, no, you are smiling because you know that you will not accept—10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Jenkins)—Order! The honourable member will refer his remarks through the chair.SD4Cadman, Alan, MPMr CADMAN—Mr Deputy Speaker, you are perfectly right. On an earlier occasion I reminded the House of that.10000DEPUTY SPEAKERMr DEPUTY SPEAKER—I am now smiling at that point, but no other point.SD4Cadman, Alan, MPMr CADMAN—You are smiling yourself. I know, Mr Deputy Speaker, you would not hold a proposition that delay or obstruction is a sensible or a pleasant thing. It is a dangerous thing in two terms: it will prevent change that is necessary in Australia and it will encourage people to disregard the main parties in Australia and vote for splinter parties who promise nothing but mayhem.The panic and hysteria expressed by the Australian Labor Party here in this chamber warn the Australian people of how concerned they are that we should be successful as a government in bringing this in. The louder they talk, the more noise they make, the less substance often there is to their arguments. That is what is going on here today. That is what is going on through the whole debate.The Prime Minister gave five goals to the government in looking at tax reform. Those goals were to reduce the level of personal income tax, to consider an indirect tax—a consumption tax—to compensate people who are affected by a change in the taxation system, and to look at the relationships of funding and finances between the state and the Commonwealth. The government delivered on that package. These bills that we are debating today are historic bills. There is a wad of them of about four or five inches thick that cover every aspect of the government's commitment prior to the election.It seems strange to the Australian Labor Party that a government would actually want to fulfil its policies. That is something you are going to have to get used to as a party. Something the Australian people are going to expect more and more as years go by is that governments will actually live up to their commitments. Gone are the days, I would contend, when you can do the half-smart stuff that denotes the Australian Labor Party: tell a few lies, skate into office, then change your mind. Those days, thank goodness, are gone. We have governments now in Australia that will live up to their commitments.It does not matter whether it is a change in the structure of the personal taxation system; whether it is the removal of that ramshackle wholesale sales tax that the Australian Labor Party wants to cling to, together with high personal taxation; whether it is a change in the personal tax scales, change to the fringe benefits tax and the introduction of a goods and services tax as a special bill—it does not matter whether it is part of this total package or not, the Australian Labor Party is opposed to it.This is a reform that is needed in Australia, it is a reform that is historic, it is a reform that will change the outlook of Australian people, because the Australian people will have more of their own money in their pockets, the costs of doing business will fall and people will gain advantage themselves by this process. Those who will be disadvantaged by this process will not be those who are elderly or those on fixed income. The government has covered that situation in this legislation with a guarantee that, no matter what the change in the cost of living, there is that 1½ per cent margin of compensation for everybody in those categories—a 1½ per cent margin of compensation in addition to any cost increases or price increases that the goods and services tax may impose on those people.This is not a tax change that seeks to take extra money out of the pockets of families or the hard-up. This is a tax change that will bring about lower costs, will create more employment and will get away from the huge impost that we are moving towards of high personal income tax, which is unaffordable for families.The government has covered, in this legislation, the three basic areas of the goods and services tax, tax cuts and compensation, and the transitional issues where there is a need for us to move gradually into the changed tax regime. It covers, under the goods and services tax, the sale of businesses, duty free stores, grouping provisions for companies that trade as groups, moving in and out of the system of reporting, the changing of return periods, tax invoices, second-hand goods, taxis and non-deductible expenses. All the details are here. This is the delivery of a tax system that will bring about incentive and change in Australia.The areas covered in the bill include the exempt areas—the areas where activities are GST free: health and education, religious services, the arrangement between commercial and non-commercial activities of charities, and the other areas where the government promised before the election that consideration would be given to the needs of people and the simple commencement of a goods and services tax. Medical services are free, hospital services are free, residential care is free and so are community home care, disability services, medical appliances and aids, drugs and medicines. So the health services are more than adequately covered in the provisions before the House today.Hospital services are adequately covered. Nursing homes include those listed under the quality care principles established as a working basis between the Commonwealth and the states. Home services, HACC funded services, are all covered by this legislation. And the medicines and drugs that were raised as matters of niggling intervention by members of the opposition at question time are all covered. The problem is that the opposition needs to apply itself to the process of reform and change in Australia. Its vision is non-existent—it is too low, it offers no incentive, no vision for the people of Australia.The legislation covers educational matters—the types of schools, kindergartens, pre- and primary schools, private for-profit schools, and recognised special education centres. They are all protected and covered in this legislation.As the government moves ahead to bring this legislation into being, the people of Australia will benefit. I will just run through some of those benefits. We are going to get rid of the crazy idea of taxing goods based on some whim expressed by a bureaucrat here in Canberra. It does not matter whether it is baby powder being taxed at 22 per cent, or greeting cards. Why 22 per cent? Who would know. Is it a luxury in somebody's eyes? I would not think a greeting card to somebody with a wedding anniversary or a 90th birthday is a luxury, but somebody has decided that. I would not think that using baby powder is a luxury process, but somebody has decided that.We are going to throw out all that stuff. We are going to bring in a simple, low-level tax on all services and all goods, a tax that will be recovered by the business community and we will compensate those who are disabled or who are elderly.The changes that are proposed will also allow huge reductions in personal income tax, particularly for those people with families. If the member at the table is thinking that this a process that he would not like to go along with, I would like to see him go down to Corio or to the electorate of my friend, the Government Whip, and say, `We want to keep high taxes on you guys. We want to keep this ramshackle wholesale sales tax.'It is not a positive campaign that the Australian Labor Party is running at the moment. They are not saying they want to keep these taxes, which is the implication of their argument, they are saying that everything the government is doing is wrong.Let me put it to you my friend, and to you, Mr Deputy Speaker, that if you honestly think these programs are so bad and wrong for Australia you will let them go through and you will let us destroy ourselves. But the trouble is you know we are right and you will not back us; you want only to obstruct and delay.17:58:001593Emerson, Craig, MPMr EMERSON83VRankinALP00—I am pleased to participate in the debate on A New Tax System (Goods and Services Tax) Bill 1998 and cognate bills. The test conventionally applied for assessing proposed changes in taxation policy includes: (1) efficiency; (2) equity; (3) revenue raising ability; and (4) simplicity and ease of administration. In the time available I will assess the government's tax policy against the first two of these criteria, efficiency and equity.Let us look at efficiency. Tax proposals should be judged in relation to their ability to improve the efficient functioning of the economy. That is, does the government's tax proposal boost economic growth and create jobs? The GST package will not improve the allocative efficiency of the economy, it is simply replacing one set of indirect taxes with multiple rates with another set of indirect taxes with multiple rates. Payroll tax and excises on petrol, cigarettes and alcohol will remain. The wholesale sales tax would go but it would be replaced with a multiple rate goods and services tax. That is because some items will be GST free, other items will be input taxed, there will be special treatment of luxury cars, and there will be a myriad of exemptions and anomalies that have been pointed out in this House over the last few days.This is why independent economic models show little positive effect, and more likely substantial negative effect, of the govern ment's tax package on economic growth. These models do not take account of the business compliance costs of the GST package. If the costs of the GST paperwork per business—and I am talking about big business and small business here—averaged just $1,000 a year, then more than $1 billion a year will be wasted on GST paperwork. My colleague the member for Kingston will amplify this point a little later.Despite the government rhetoric, there will be little or no impact of the tax package on net exports. There will be some aggregate reductions in tax rates on exports but they are quite small and their effects will be pretty well wiped out by an exchange rate appreciation. Yet the largest and fastest growing export in Australia has been tourism and the tourism sector will be devastated by the GST package because it will pay the GST.Let us look at the effect of this package on employment. The GST is a job destroyer; it favours capital intensive industries over labour intensive industries, so we can expect substantial job losses from the GST package. If this goes through, we will get some positive effects on employment from spending the budget surplus, which is a separate matter entirely, but these gains to the employment situation will be destroyed by the GST. If Australia does want to spend part of the budget surplus, then it should use it on Labor's family tax credit plan to smooth the transition from welfare to work. That is a true employment policy, not a job-destroying GST.The Treasurer knows that the GST package is no good for the economy. He is reported in the Weekend Australian of 16 November 1996 as saying:I honestly think, now it has receded from consciousness it's being invested with some snake-oil qualities . . . It has certain advantages, but you wouldn't want to overclaim it. They're at the margin.The employment minister knows the GST is no good for the economy. On 1 November he said:The GST isn't the answer for unemployment.Dr Neil Warren, who helped design the Fightback package, knows the GST is no good for the economy. He said on ABC television on 18 May 1998:Oh, I mean people are saying the GST will solve all our ills. I mean, the GST will not, and I think it's a mistake to say that it's going to cure our foreign debt and create thousands of jobs. It's just not going to do that.Indeed, the Secretary to the Treasury knows the GST is no good for the economy. He is reported in the Australian of 18 May 1998 as saying:Every economic text that I know of will tell you in principle that shifting the tax burden towards further reliance on indirect taxes will significantly aid national saving.But he added:. . . you won't find that convincingly (demonstrated) in studies of international tax reform experience.So we can only conclude that the government's GST package, assessed against the efficiency criterion, is an abject failure.So let us turn to the second criterion, and that is equity. There is scarcely a person in Australia who believes the GST package is fair. The Prime Minister and his ministers think it is fair because they will get tax cuts of more than $100 a week. Yet age pensioners, according to the government's own shonky figures, get a tax improvement of only $2.89 a week. The government has perpetrated a fraud on the Australian people with its snake oil GST, and I will show how.According to the government, everyone is a winner with the GST package. This is all based on the dishonest claim that a 10 per cent GST will increase the cost of living for all Australians by only 1.9 per cent, and here is how the government has concealed the truth from the Australian people. First, it used the second year effect on prices, not the higher first year effect. Second, tobacco price rises have been explicitly ignored. Third, housing cost increases have been deliberately understated. Fourth, the Premiers Conference decision to retain stamp duties on commercial property conveyancing has not been taken into account. Fifth, it has been assumed that there is an instantaneous and complete passing on by businesses to consumers of every cent of savings from abolishing the wholesale sales tax, the financial institutions duty, the BAD tax and other indirect taxes.If proper account is taken of each of these deliberate understatements of the effects of the GST package on the cost of living, and if we assume business passes on fully 75 per cent of reductions in indirect taxes, then the GST package will increase the average cost of living by more than four per cent, not the shonky 1.9 per cent. The average cost of living increase therefore will be more than double the government's snake oil claim of 1.9 per cent. That is the true average cost of living increase—more than four per cent.But the situation for pensioners and low and middle income earners is much worse because, compared with high income earners, pensioners and low income earners spend a higher proportion of their income on food, electricity and other essentials of life, and those prices will rise. Second, pensioners and low income earners spend all of their income or more than all of their income—that is, they `dis-save'. So they will pay GST on all their income, whereas the more affluent will pay GST only on that part of their income that they spend.The effect of the different spending behaviour of pensioners and low income earners compared with more affluent families is that struggling Australian families will face much higher cost of living increases than the average. In fact, pensioners will face cost of living increases of more than $10 a week—and perhaps much more—and couples with children who are earning low incomes will face cost of living increases of around $20 a week or perhaps even more.The government has deliberately concealed the losses to pensioners and struggling Australian families in its GST plan. Why, we might ask? The answer is so that it can give more than half its tax cuts to the top 20 per cent of income earners in Australia. These massive tax cuts for high income earners are being funded out of the budget surplus built on the backs of ordinary Australians. The government slashed education funding, health care funding and child care.Yesterday the Uniting Church Child-Care Centre at Logan Central announced that it will be closing its doors after 21 years of service. The Uniting Church attributes the closure mainly to the loss of operational subsidy from this government, and to restrictions to child-care rebates imposed, again, by this government. Thirty families are directly affected by this decision and by the closure.In addition, vocational training offered by that child-care centre to Woodridge State High School is now going to be lost. So we are going to have a loss of training opportunities and job opportunities for students at Woodridge State High School. That is how the government is funding its $100 a week tax cuts to the privileged. It is funding those tax cuts on the backs of families that have relied on services such as those provided by the Uniting Church Child-Care Centre at Logan Central.The government's GST package fails the efficiency test and it fails the equity test. In fact, it is a shameful, heartless plan designed to entrench privilege, funded by struggling Australian families. It is a tax package that will be repudiated by the Australian people at the next election for the disgraceful, snake oil, job destroying, unfair deception that it is.18:07:001595Nairn, Gary, MPMr NAIRNOK6Eden-MonaroLP10—One of the most overstated quotes is the one about the two most inevitable things in our lives being taxes and death. Equally inevitable is the fact that if a government or an opposition is strong enough to put forward a major reform of taxation then substantial public debate will ensue. If you are up-front and open, then you can be guaranteed of strong public participation in the debate. If you are sneaky about tax changes, then you might just avoid the debate, and recent history proves this. Remember back in the mid-1980s when the then Labor government floated the idea of major reform with the preferred option being the introduction of a goods and services tax? Much public debate took place and there was strong support for it. There was acceptance that our taxation system needed overhauling; it was outdated and taxes were applied to a base that was far too narrow, making it very unfair to a number of sections of the community, in particular, ordinary income taxpayers. It is interesting to look back at some of the quotes at that time in support of the introduction of a goods and services tax. The Treasurer of the day, Paul Keating, was the one really trying to push reform at the time and he put forward an introduction of a goods and services tax. He said:. . . There are three main advantages of (consumption) tax.First, it will allow a more rational indirect tax system than the current anomaly-ridden wholesale tax, which has multiple rates, numerous exemptions, and fails to tax the services sector.Second, it will enable us to generate tax revenues to provide for a major reduction in the marginal rates of income tax. No other tax has the same potential for this purpose.Third, it generates tax from those who will continue to evade or avoid income tax. That provides a useful `net dividend' for distribution to the rest of the community.Those are all arguments that I think the House will remember being put forward in the debate that we had just recently before the October federal election. With regard to business, Paul Keating said:For business, this is a simple tax. They will also benefit from no longer carrying the cost of the wholesale sales tax which they pay and have to finance on their stocks.He further said:The great value of a tax of this kind in terms of its efficiency will be its simplicity. . . He went on to talk about the exemptions—and we have had lots of debate recently about whether things should be exempt or not. He said:At the moment we all have to buy the necessities; if you're not buying them you can't live. And you buy them now out of your after-tax income, after it has suffered these very high, oppressive marginal rates.He went on to say:What we are saying is that you buy the same necessities, but out of your relieved tax income.That is a very relevant point because those opposite continue to talk about the introduction of a GST of 10 per cent on items. They choose never to talk about the taxes that will be removed and they also choose not to talk about the dramatic decrease in income tax.But here was one of their great idols of the past—Keating—back in the mid-1980s, wanting to put forward a reform but, unfortunately, the bulk of the Labor Party were not prepared to take the hard decisions. They were not prepared to go forward and wanted to continue with the draconian taxation system that we have had since 1930. It was probably a great system back in 1930, but it is certainly totally out of date today. That was the debate in 1985.In 1993 we had another debate and that came from the opposition this time. John Hewson put forward, once again, a comprehensive plan for taxation reform which included a goods and services tax. We had an enormous debate leading up to the 1993 election. So dating back even to 1985, but then more so in 1993, the public have participated very strongly in this debate. In 1993 the government of the day, interestingly with Paul Keating as their leader, went in the totally opposite direction to what he said back in 1985. It is a wonder how he could really stand up and make the claims that he did in 1993, given the sorts of the things he said in 1985.That is another example of where, if you are prepared to be strong and up-front, there is good public debate, but if you want to just sneak through some changes and not be strong and up front, then often there is not the debate. That happened in 1993. While we were having a debate about the possible introduction of a GST, the Labor Party of the day were behind the scenes getting ready to make massive taxation changes after they got back in 1993—but not for massive taxation reform, simply massive taxation changes.What they did was whack up the wholesale sales tax—10 per cent went to 12 per cent, 20 per cent went to 22 per cent, and 30 per cent went to 32 per cent. They increased the items that were subject to the tax and therefore added an enormous burden. I just find it unbelievable listening to some of these Labor people coming in here and talking about the burden of taxation reform under our proposal and how people will be worse off and we are not compensating them. Can you find one single item of compensation after 1993 when they got back into government, snuck back into government by not telling people what they were going to do—WU5O'CONNORMr O'Connor—Only seven major reforms to the tax system in 13 years.OK6Nairn, Gary, MPMr NAIRN—Can you find one single bit of compensation after 1993? Not one cent! And these people now stand up here and say that they are going to look after the downtrodden, the battlers and everybody else. How much compensation did they provide those people with after 1993? Not one cent—not a single cent—in compensation. The hypocrisy is astounding. So that was the great debate we had in 1993, and the end result of that was that the people of Australia got massive taxation increases without any compensation whatsoever.Then we came to 1998. We have had a situation where the government of the day this time was strong enough and up-front enough to put forward taxation reform prior to an election, and that dominated a fair part of that campaign. So, once again, we have seen quite substantial debate out there among the public about taxation reform. We have had it this time because we, the coalition, have been prepared to put that forward. The claim that many Labor people make is that there has not been enough debate. But, if you look back at 1985, 1993 and 1998, there has been an enormous debate among the public.In the short time I have to speak today in this debate, I will talk about a couple of items that have been fairly topical throughout the whole debate going back to 1985. First of all, there is the effect of a goods and services tax on business. I think I can speak with some credibility, having been a partner in a surveying practice for the 15 years prior to coming into this parliament, about the effects of the various existing taxes on business and what the effect would be as a result of taxation reform.The amount of wholesale sales tax, as it goes through the whole business cycle, is quite staggering. If you sit down, in any small business, and look back through the many purchases that you make, I do not think there would be a single item where I would not be able to find the effect of some wholesale sales tax on it. Once again, we see those opposite—and it is pretty hard to find any of them over there who have ever had any experience in this area—stand up and talk about the burden it would be on small business and how they do not pay sales tax on things. It is just the greatest load of rubbish, because just every small business has an enormous amount of tax built into their purchases.I went back through some of the things that my business spent on on a regular basis and looked at the sorts of savings that would take place. We ran about eight, nine or 10 vehicles. In terms of fuel alone, it will basically work out that the refund you will get in GST from the fuel—and that means a reduction in the cost of fuel for running those vehicles, because the actual price of fuel will be about the same after the GST goes in as it is now, so you effectively get a reduction—will mean that for more or less one month in every 12 our fuel bill will be free. That is an enormous difference and an enormous benefit to the running of a survey practice such as the one I was involved in.On the cost of vehicles, of all of our survey equipment—there is 22 per cent sales tax on all of those sorts of things. All of that will be refunded. It will not only reduce from 22 per cent to 10 per cent, the 10 per cent will be refunded. The pegs and the stakes, all of the materials that we would use daily—these are the big purchases in a business like that. They all reduce from 22 per cent sales tax down to 10 per cent, and it is refunded. So there are certainly significant gains to be made in that part of it, and that really affects your cash flow because you are paying those purchases on a regular basis and you are getting it refunded under the GST proposal.Probably more importantly, when I look around my electorate and the types of businesses there, by far and away they are predominantly small businesses and many of them are involved in export areas. With great parts of the electorate being a fairly rural seat, there are significant businesses that rely very heavily on selling our produce overseas. The savings there are enormous. A company like Bega Cheese, which has got into the export market in the last five years, has gone from zero export sales to about $15 million a year in those five years, which is terrific. They have put a big effort into that.But they have a problem in that they have to compete with New Zealand, and New Zealand, with a goods and services tax regime, has all of its dairy products going offshore without any tax at all. Here we have Bega Cheese having to compete with New Zealand in England, Europe and various other places, and compete unfairly. Companies like that are very much looking forward to the introduction of a GST because all of those taxes will be refundable to them, and all the many other taxes that we are getting rid of means savings to their exporting.The same applies to a company like Toorallie Wool in Bombala. Toorallie was set up in the early 1990s when the floor price of wool had disappeared and the people there thought, `We can do something different.' They went into manufacturing their own product. They now have stores in America, New Zealand and Europe and they are gradually increasing their exports of excellent Australian wool products. Once again, they will have a lot of the tax burden taken off them. They are a very competitive business. It is pretty tough out there in the world market, particularly in an area like wool. They are very much looking forward to getting those costs off them that will flow as a result of the introduction of a GST.The other thing I would like to say is in relation to the benefits of a reduction in income tax. We have heard a lot from the Labor side, this bleating about, `It's all going to the high income earners.' Let us have a look at what will occur with the changes to income tax, and those rates changing quite dramatically. Currently, the bottom 20 per cent of taxpayers are contributing 2.3 per cent of income tax paid. The percentage share of the tax cut will be over four per cent to that group. The income tax percentage paid by that group after July 2000 will be two per cent. So it will reduce from 2.3 per cent to two per cent. If you go through the bottom 40 per cent, the bottom 60 per cent, and the bottom 80 per cent, it is the same. In fact, it is the top 20 per cent who will be contribut ing a larger proportion of tax. For Labor to huff and puff and carry on and say this is money for the high income earners is incorrect. The facts just do not show it. It is the lower income people who will benefit, and they certainly form a part of the spectrum within my electorate, having incomes below $24,000, $25,000 and $30,000 a year. They are going to benefit from it.Various pieces of information released this week have demonstrated in no uncertain terms the excellent job the coalition has done in repairing and managing the economy. The information has shown strong growth, low inflation, sustained low interest rates, reduced government debt and reduced unemployment. That shows just how much we have got it right.Tax reform is the next step to build on the economic and workplace relations initiatives of our first term. The people and businesses of Eden-Monaro will benefit from this reform. Average wage earners will pay less tax, businesses will be working in a fairer system, and the many businesses that rely on selling to the rest of the world will be more competitive with the impost of the wholesale sales tax taken off their backs, along with a whole myriad of other taxes. In addition it will allow them to sell more. If they are selling more they will have to produce more. If they produce more they will need to employ more people. That means real and long-term jobs for the people of Eden-Monaro. These bills must be supported.18:23:001598McMullan, Bob, MPMr McMULLAN5I4CanberraALP00—I, of course, rise to support the amendment moved by my colleague the member for Hotham in this debate on A New Tax System (Goods and Services Tax) Bill 1998 and cognate bills. What we have here is a set of bills and a debate which reflects substantially a government that has its priorities fundamentally wrong. What it has done is set out to work out the tax system that it thinks is ideal and then try to adjust the society and economy to fit in with the tax system it wants to introduce.By any normal logic of public policy, that is not the way you go about it. You would say, `What is the outcome? What is the social and economic outcome we are trying to achieve?' Then you would do something about the tax system as part of a package of measures targeted towards that end, but not here. When you hear the debate it is all about, `We want to have this most wonderful tax system. If it has some social and economic disadvantages we will try and come up with some compensation measures to make up.'We all know that, as soon as the budget comes under pressure, it is the compensation measures that go. It is not a unique accusation to make about this government. You can look around the world at what has happened. You do not have to look very far—just across the Tasman. In that instance, you will see that a conservative government came in without any commitment to the compensation measures. They never said that they were going to cut them but, as soon as the budget got under pressure, their first step, apart from putting up the GST—which is an issue that, if I have time, I will come back to—was to cut the compensation measures. So the priorities are just wrong. It is putting the tax reform cart before the social and economic policy horse.What would we set down if we were trying to ask what goals we should set? Let us see if we measure whether this tax change is making a positive contribution to achieving those social and economic goals. Of course, that in itself could be the subject of a major speech, and debate could go on for hours. But there are certain broad things that I think are shared in Australia about what it is that are our social and economic goals within which we try to develop packages of measures to achieve those broadly shared goals. They are about a fair society and an economy growing and creating jobs.Let us have a look at whether this set of measures is contributing to the goals of a fair society and an economy growing and creating jobs. It is evident on its face, on the government's own measures, that the tax bills that we are debating have an unfair impact, because it is to compensate for that unfair impact that we have a whole range of other bills as compensation measures for the unfair consequences. We would argue about the adequacy; I will come to that if I have time. But that is not my core point. My core point for the moment is that it is a given that the tax changes make the society less fair and therefore we introduce compensation measures to make up.The member for Eden-Monaro argued how wonderful the compensation measures are. We are very critical of them; and the member for Hotham, in his contribution, I thought analysed them very effectively. I do not want to duplicate his remarks, because our time is limited, so I simply endorse them. But it is unchallenged that, without the compensation measures, the nature of these tax changes makes our society less fair. Some changes I think also reflect something that worries me about the values and trends in our society. It is as if we have abandoned priorities and goals. It is as if we are bringing in a tax system that says that, as its virtue, it does not discriminate between socially beneficial and socially harmful. It does not discriminate between environmentally damaging and environmentally beneficial. It is as if we no longer have priorities as a country; as if we no longer have values; as if we no longer try to put together, through the actions of our government, a composite impact that improves the nature of our society. And that is claimed to be a virtue of this tax package—that it does not reflect any values, that it does not have any priorities and that it does not discriminate between good things and bad.We will have an argument in here about what those priorities should be. That would be fine; that is very healthy. We live in a democracy; we should have a debate about those things. But do not pretend that you do not discriminate, that they are all equal and that you do not have a preference between things that pollute and things that do not or between things that enhance our society and things that do not. It reflects I think very worryingly in terms of its social impact in that way.But, of course, as shadow minister for industry, my primary responsibility in the time available is to talk about the economic, the industry and the employment consequences. Let me do that quickly. The government, in its tax package, claimed that we would get for the Commonwealth budget— and more for the states; but let me just talk about the Commonwealth budget for simplicity—a growth dividend of $1.6 billion over three years. That is a key part of preventing these splurges in tax cuts to higher income Australians absolutely blowing the budget. It does erode significantly into the surplus that has been, as the member for Rankin so eloquently said, gained on the backs of people whose services have been cut, and those tax cuts are being given predominantly to high income Australians.The argument that it is consistent at least in some part with responsible economic management is that we will get a growth dividend of $1.6 billion over three years, and you get the usual elegant set of models based on assumptions that automatically lead you to the conclusion that this will be so. The problem is that the empirical evidence is not there; the data does not back it up. When you look at the 22 OECD countries which have introduced a value added tax over the last 35 years, and you look at the three years of economic growth before a value added tax and the three years after—so you take out all the one-off factors in any one country because those arguments can just lead you into arguments about the one-offs and it should cancel out most of the one-offs—you see that for 11 of them the growth in the three years after a GST was higher than in the three years before and in 11 countries it was lower. It is as likely that growth will be lower than higher. In fact, the unweighted average of those 22 changes is slightly negative.For the purposes of the discussion, let us say it is zero—it is in fact, as I say, slightly negative. The historical experience is that there is no growth dividend. Everybody who believes in a GST will write an elegant economic model building in assumptions that lead to the outcome they want which says, `But there will be.' The facts keep not agreeing with the theory and so they keep arguing that the facts must be wrong. It is just arguable that the theory is wrong. In 35 years in 22 countries it has not worked, so you cannot bank on that growth dividend that has significant budgetary consequences. But it is significant because during the election when the government was asked for their answer to unemployment it said the GST was. But there is no growth dividend. It is at best zero.You can look at two countries which have a lot of similarities to Australia either in their political system or socially. Canada, for example, is a federation with a similar economic structure to ours in terms of its resource base and New Zealand, which is different in that it is smaller and not a federation, with a similar economy to ours and similar in many other ways. They both recently introduced a value added tax. In 1991 in Canada and in the three years after the GST was introduced, growth fell to 0.5 per cent on average. It fell 2.1 per cent in those three years. In New Zealand it fell on average by three per cent over the subsequent three years. So, using the most comparable example we can get, they are even more negative. If you average it over the 22 countries over 35 years, the growth dividend is zero. That is what I call a horizontal assessment over a large number of countries over a long period.If you try to do a vertical assessment and assess a whole range of similar countries at the same time, you get the same result. In fact, in recent times with regard to OECD countries, you get a more negative result in the vertical assessment because the United States and Australia over the period since 1993 have tended to grow more quickly than the average OECD countries—and they are two big OECD countries without a GST. But let us say for the purpose of being fair to the government that the vertical assessment again says zero. Both instances are in fact negative. At best there is no growth dividend and there are no jobs.We then look at the specific industry consequences. I am very worried about the GST and its impact and the ways these bills are being introduced with regard to particular industries. Let us have a look at three, which is all I have time for: cars, information technology and housing—three very important sources of jobs for Australia. All commentators are extremely concerned about the inadequate transitional arrangements for the introduction of the GST. Mitsubishi said on 3 December that:. . . a single date introduction such as this cannot be managed in a normal commercial context . . . and that the changes could cause significant disruption to sales and have a severe effect on the livelihood and income of people in the vehicle industry.We now have the Australian Fleet Managers Association saying that fleet owners are likely to delay purchases from as early as July for up to three years to ensure they receive the full tax credit. They say that:. . . this could have a terminal effect on the Australian automotive industry manufacturers who rely on fleet purchases for their very existence.Fleet purchases are much more important to domestic producers than they are for the vehicle industry as a whole. They constitute a much higher proportion of fleet purchases than they do of new car sales as a whole. So if it has an adverse impact, as it is most likely to have most starkly in the fleet purchase area, it will have its major impact on Australian automobile production rather than on imported automobiles.In fact, there is a bit of an argument that there will be a significant slowdown in private vehicle sales because of the significant gains to private automobile purchasers. I think there is an expectation of that cut and it may lead to some deferral. But when you look at the likely impact of the introduction of a GST on the used car market, which is a very free market where policy changes and price changes are reflected very quickly in the market, you see most ordinary Australians never buy a new car. They buy used cars. Almost 70 per cent of Australians buy used cars. If you change one used car to another, you get no benefit. But even if, as higher income Australians tend to do, you go from a used car to a new car—that is, you change over your car, but it is a private purchase, not a fleet purchase—the changeover price is not going to be significantly affected by the GST, because the fall in used car prices is going to be proportionate to the fall in new car prices, because that will be the devaluation of the value of the used car.An ordinary Australian punter buying a car is not actually going to get a benefit unless they are in one small group which buys a new car without a trade-in. I recently was in that group, so I suppose I should be regretting that I did it so early. At the other end of the market, if you sell a used car and are not going to buy a new car, you will be a loser. In the middle, there will be no net effect, which covers the overwhelming majority of purchases by ordinary Australians. That is a well-known concern.In the limited time available, I want to say that the same problem can occur and is a cause of great concern in the information technology industry, which is a very important and rapidly growing industry, growing at three times the rate of the economy as a whole. It is an important job generator. There are no transitional arrangements for the computer industry. The bring forward risk is exactly the same.While the hardware is not going to be manufactured in Australia, when major hardware contracts are deferred, it is going to have significant implications on software suppliers, systems integrators and other service providers around those major contracts. There is a big bring forward problem in the IT industry with job consequences that are quite significant. This has been raised significantly by the Australian Information Industry Association with the government without response.Conversely, you have a significant problem in housing, which I will just give in one sentence, because I do not want to take up more than my allowable time. The Housing Industry Association has said:The post-GST drop in new housing starts will be severe and concentrated in the second half of 2000.That is the very worst time, because it is when I fear we are going to be having a significant downturn in the construction industry, as a consequence of the end of the Olympic construction boom. That is what everybody in the construction industry is saying, and it is a serious problem.I would like to say something about the impact of e-commerce on these measures. I do not have the time to do that, so I will simply say that it is going to undermine the income generating capacity of all consump tion tax like this. We are signing on to the 1960s wave, just as it is receding.I will conclude with these remarks in accordance with the agreed timetable. The Australian people had the chance to vote on these measures; the majority of them voted for parties against these measures—they did so particularly and overwhelmingly in the Senate. They voted in majority to say they do not want these measures introduced. They voted for me and for my colleagues to vote against it. I will be doing so, and I call on the House to do the same.18:40:001601Lindsay, Peter, MPMr LINDSAYHK6HerbertLP10—Mr Deputy Speaker, tonight I brought a paper bag into the parliament. You would have to ask: why have I brought a paper bag in? The reason I brought a paper bag in is that the treatment of this paper bag is just a classic example of what is wrong with the current tax system we have in this country.This is a bag that you would probably find in any baker's shop; if you go in and buy a pie, you would expect the baker to put the pie in this bag. What happens if you buy an apple pie? The baker puts the apple pie in the bag. How much wholesale sales tax does the government collect because there is an apple pie in that bag? The answer is none. But what if you change your mind, if you go to the baker and say, `Look, I won't have an apple pie, I would like to buy a meat pie, please'—and many Australians buy meat pies—so he takes out the apple pie and puts in the meat pie. How much tax do you pay on the bag? The answer is 22 per cent.But if you change your mind again and say, `Look, no, I don't think I will have a meat pie, I think I would like to buy a family pie,' and the baker takes out the meat pie and puts in a family pie, how much tax does the baker pay to the Commonwealth of Australia in wholesale sales tax on the bag? The answer is zero.So you say, `This is a bit complicated. Why do we have a tax system like that in this country, in this modern day and age?' Then you say, `Look, I think I will just go and buy a bag.' So where do you buy a bag? You go to Franklins. You can buy this bag at Franklins but you pay wholesale sales tax on the bag. How much do you pay? Twelve per cent—not zero, not 22, but 12 per cent, if you buy that bag at Franklins. Remember, if you buy it with a meat pie it is 22 per cent; if you buy it with an apple pie it is nothing; if you buy it at Franklins, it is 12 per cent.What happens if you go and buy this bag at a wholesalers? Surprise, surprise, it is different again. The poor person who goes to the wholesalers to buy this bag, instead of going to Franklins to buy the bag, pays 22 per cent.How could we have a wholesale sales tax system in this country that carries on like that? Why haven't we moved forward towards getting a sensible tax system? This is what the current government of Australia intends to do. We want a new tax system for a new century. This is a historic opportunity to make the most significant change to the Australian taxation system since Federation. And, goodness me, isn't it overdue!The example I have given with the bag is repeated right throughout Labor's archaic wholesale sales tax system. I did not go into milk cartons tonight, as to whether you buy them with fresh milk or flavoured milk in them, and what is a food and what is not a food, and so on. But I can tell you there are many other examples of what is wrong with the wholesale sales tax system.This new tax system for Australia is about cutting taxes in the country. This is not about increasing taxes; this is about giving tax cuts. The budget is in surplus. This is about giving $4 billion back to the Australian economy. You all know, and you have heard many of us say in this place, that we will end up with 81 per cent of taxpayers paying 30 per cent as their top marginal rate of tax. What a wonderful outcome. Why is the Labor Party standing against cutting people's taxes? I do not understand that. I do not understand how their position can be sustained. I do not understand why they are opposing the government taking $4 billion less in tax from Australian taxpayers. It beats me. I would have thought that was a pretty good outcome for the new century.But the government, in proposing this new tax system, has got significant credibility on the board now. For example, in this morning's Courier-Mail there is the headline on page 4, `Economy's golden run rolls on as job ads rise'. I think that even Labor Party people have been significantly surprised at the achievements of the current government. They have been surprised that in just 2½ years we have been able to turn the economy around. We have been able to deliver the budget surplus. We have been able to deliver an economy which is the best economy in 30 years. We have been able to deliver marvellously low inflation and interest rates for home owners. It has been wonderful. And now we want to deliver a new tax system for a new century.Our credentials have been established. There is no challenge to what the government might be able to do. We have a plan and we intend to put that plan in place. I believe that we will be able to do that. We took the hard decisions in the first 2½ years and now we want to build on those, we want to deliver the new tax plan.This morning in the Australian Financial Review there was an article headed, `The secret of Australia's success.' Note that the media now has turned around and is talking about the positives in the Australian economy. It is talking about our country doing better than most other countries in the world. That article says:The secret of this economic magic is productivity growth. Australian productivity growth has been drifting up over the expansion in a way we have not seen in the last 20 years.Surely, that is the biggest tick that you could possibly get for a federal government.On top of that we have been able to put in place landmark industrial relations reform, landmark waterfront reform, landmark small business reform, and now we want to put in place a new tax system for Australia. I call on the Labor Party to stop standing in the way of this progressive reform. The Labor Party's position on this seems to have been, `Let's oppose this for the sake of opposing it.' It is like opposing the health insurance rebate. They are saying, `Let's oppose it because it is good for Australia. Let's vote down a new tax system.'They ought to have a look at what Paul Keating said back in 1985. He indicated that a consumption tax benefits business because for business it is a simple tax. He said the current wholesale sales tax system is irrational. Too right it is. You have seen the example of the paper bag that I mentioned earlier. Keating said that the great value of a tax of this kind in terms of its efficiency will be its simplicity. Why does the Labor Party not listen and learn?Keating talked about the importance of few exemptions. He said that you buy the same necessities but out of your relieved tax income. Certainly the government is giving significant tax cuts to families in Australia. He said that many items are taxed highly now and they will be taxed less under a consumption tax, and he was right on that too. He said many items with the seven different sales tax rates are going to become cheaper. Most items are going to become cheaper. He said the current tax system is discriminatory and hurts our economy. He was right on that too. Labor members should look at what we are proposing to do with exports. He also said, `We will junk the sales tax.' Labor members should certainly listen to the words of Paul Keating.If you do not like those words, listen to the words of Kim Beazley. Kim Beazley said back in June 1985:I, like all cabinet ministers, support the thrust of the option that is being presented. I think that it is capable of being implemented equitably. I think that it is capable of being finetuned to overcome most of the objection.Kim Beazley said that in an interview with ABC television in 1985.The message to the ALP is quite clearly to get out of the way, support a new tax system for a new century, support the government's position to make sure that we have a strong economy and something that is fair to the people of Australia.In relation to exports, that is dear to my heart because in Townsville we have the third largest port in Queensland. Exports are very significant to our city. All exports of goods under the government's new tax plan will be GST free. All GST on business inputs will be fully refunded.As the Deputy Prime Minister has said time and time again, every container of export goods will depart Australia free of all internal taxes. That is not what happens now. It is going to make our exports more competitive, and it is going to make them cheaper. More exports mean more jobs for Australia. It has a bearing on the current account at this stage. The Labor Party whinge and whine about the state of the current account, yet they stand in the way of a mechanism to fix the problem. We want to lift the burden of wholesale sales tax off the backs of exporters and transport operators and tilt—as it was once described by the Deputy Prime Minister—the unlevel playing field in favour of exporters and rural and regional Australia. That is the bonus that flows from replacing the antiquated wholesale sales tax system with a broad based indirect tax. In September the Minerals Council of Australia said:The fuel excise proposals in the reform package are very important not only to the minerals sector but also to the oil and gas, agricultural, fishing, forestry, manufacturing and transport sectors. This is good news for job prospects in regional Australia.That means places like Townsville and Thuringowa. The government's tax plan will take $4½ billion off the cost of Australian exports. There are also very significant benefits to Commonwealth-state relations. We have all seen that all of the states have unanimously endorsed the government's position on this, even the Labor states. That should send a strong message to the federal Labor Party.I turn to local government. Local government, where I come from, is going to be $70 million a year better off. Rates should be able to come down, because costs in local government will be able to come down. At this stage I want to put local government on notice: if their costs come down and they do not reduce their rates, I will be the first person to make sure that the ACCC comes knocking on their door—that is, any council that artificially keeps its rates up when it should be reducing its rates because its costs have gone down. I put councils on notice that, if I have complaints from ratepayers that councils are taking up the windfall that they will get from this new legislation and are not passing it on to ratepayers, they will find the ACCC at their door. Early next year legislation will be introduced to allow the ACCC to become involved in that.I turn to the compliance costs of the current antiquated, outdated 1930s Labor taxation system. I want to give the example of a person selling bags in the packaging industry. How long does it take for a small business employing four people selling packaging to account for the wholesale sales tax collections on this bag and the other products that are sold by the business? I will tell you, because I took the trouble to find out. Out of every 20 days in a month, five full days are spent by a clerk accounting for the wholesale sales tax—five full days. If there was a GST, do you know how long it would take? Five minutes. Why are you standing in the way of fundamental reform of the tax system? Why are you forcing small business to spend five days accounting to the government when it could take five minutes with the new tax system? I do not understand your position.There are many more issues that could be dealt with in this debate, but I am mindful of the time. I am also mindful of getting into strife with the Chief Government Whip, who is in the chamber. So, in deference to the Chief Government Whip, I will say only that I will be taking strong support for this legislation to my electorate. I know that I am backed by the people of Herbert.18:54:001604Gillard, Julia, MPMs GILLARD83LLalorALP00—As has been noted by other speakers, the time the government has allowed for this pivotal debate is shamelessly short. If, as the Treasurer boasts, `This is the most comprehensive reform of taxation in the history of Federation,' it seems curious that the government would be shy of an exhaustive debate in this place. But shy it is and, given the limitations on time available to me, I intend to focus on one aspect of the new tax plan: the effect of the GST on education.The government speakers in this debate have at times sounded like children, breathlessly extolling the virtues of a new toy, like snake oil spruikers who will assure you that their product will banish everything from baldness to wrinkles. But, in all this `Where do you get it?' style marketing hype, government members have been silent on the issue of education and the GST. I was going to say `curiously silent' but perhaps the silence is not at all curious, given the clearly negative impact of the GST on education in this country.Let us look at the introduction of this regressive new tax and its impact on education in context. The new century in which the government seeks to impose this tax is the century in which the twin forces of globalisation and new technology, particularly information technology, will continue to remake our world. There can be no doubt that since the 1970s global forces, including the rapid industrialisation of a number of developing countries, the fall in transportation and communication costs and the rate of technological development, have left a portion of the work force in the industrial world, including Australia, relatively underskilled and consequently at risk of unemployment and underemployment. The value of investing in education to improve the skills base of the economy and to consequently limit unemployment, underemployment and wage inequality not only makes intuitive sense but also stands the test of close and rigorous scrutiny.A recently published work by Carlos Boix entitled `Political parties, growth and equality' contains a regression analysis of the impact of educational attainment within the population and unemployment, and concludes for OECD nations for the period 1982 to 1990 that:. . . unemployment decreases a whole percentage point for each six to seven percentage points of population that have studied beyond lower secondary education.Indeed, increasingly, one of the major differences between conservative parties and social democratic parties worldwide is the attitude taken to public investment in supply side economic strategies, particularly investment in education.In Australia, despite investment in education being a vital ingredient for sustained economic success, what do we see? We see the coalition at federal and state levels hack ing away at education funding. In the 1996 budget this government hacked $1.8 billion of public support away from our university system. In my home state of Victoria we have seen 9,000 teachers sacked, 370 schools close and a $50 million maintenance backlog.Mr McArthur interjecting—Mr Hockey interjecting—83LGillard, Julia, MPMs GILLARD—Now, to add insult to past and continuing injury—I am speaking of the Kennett government, if members of the coalition are confused—this government is introducing a GST and falsely claiming that education is GST free.Let me list the facts that show that claim to be a lie. Fact 1: the GST applies to privately accessed tuition. This was the simple point of the question asked by the member for Dobell at question time today—a question the minister simply did not want to answer. In states where conservative governments have hacked into the education system, parents of kids in state schools often have no choice but to access such privately paid-for tutoring. The Jeff Kennett system of education is to limit resources to schools and then give them Hobson's choice: do you want to have an art teacher, a music teacher and a physical education teacher and have class sizes way over 30, or do you want to bring class sizes down and have no specialist teachers?For schools that resolve this cruel dilemma in favour of lower class sizes, parents know that the only way their kids are going to get a music lesson or a drawing class—the sorts of things provided as of right by the GST-free tuition fees of prestige private schools—is to buy it privately and pay GST on it. How regressive is this tax package? We will have GST-free prestige private schools while ordinary battlers trying to give their kids the best possible start in life will be slugged by a GST.The GST on education does not stop there. Fact 2: the GST will apply to ordinary school activities like the hiring of laptop computers and musical instruments and on items like the food eaten by kids on excursions. How absurd! The bus to the zoo is GST free but the sandwich you eat while you are there is not. Fact 3: the GST will also apply to aspects of school fundraising. Many in this House might take the view that school fundraising is no more than an occasional lamington drive, an attempt to find a valuable but discretionary add-on to schools. In Victoria think again. In Jeff Kennett's Victoria, every parent with children at state schools has to raise an average of $430 per year. In some schools, fundraising pays for more than 50 per cent of the cost of school programs.In 1996, one of the large secondary schools in the eastern suburbs raised $2 million in fundraising, or an average of $1,700 per student. Not only is this a recipe for further entrenching educational inequality, it is a recipe for breaking the backs of parents of state school kids in Victoria, breaking their backs running fundraising dinners and fetes and sausage sizzles. To that kind of effort and struggle this government says, `Let's put a 10 per cent GST on every sausage you sell, every ride you hire for the school fete.'DK6HOCKEYMr Hockey—That's wrong. You know that's wrong. That's absolute rubbish.83LGillard, Julia, MPMs GILLARD—That is absolutely right. You cannot squeeze Victorian parents harder than they already are being squeezed. This must make each and every such fundraiser less profitable. This fact clearly is not understood by the members opposite. Fact 4: the GST will impose huge compliance costs on schools, not only in set-up but on an ongoing basis. Schools will need to delineate between GST-exempt transactions and non-exempt transactions, and maintain records sufficient to enable refund of GST paid on inputs. The costs of set-up and administration of such accountancy programs are unknown.Fact 5: the GST will apply to items used by students, and other speakers from the opposition have noted that the compensation package for battling families with children is woefully inadequate. The problems with the incidence of GST on education do not end in the school sector. In higher education institutions we will see students slugged by a GST on services like photocopying, access to email and access to the Internet. In higher education research, institutions are being sent on an impossible mission: to divide GST-free research from commercial fee-for-service research which will be subject to a GST.How, for example, would the research work of cooperative research centres be classified, given that it is aimed at generating commercial benefits but may have significant public benefits as well? Presumably it will be slugged by a GST, and Australia's research effort will be further diminished. The GST will affect the adult and community education sector, with the application of a GST to recreation, leisure and personal enrichment courses. The added cost, no doubt, will provide a significant disincentive for a culture of community and lifelong learning, and the increase in costs will limit access.What this government does not seem to understand is that, for many adults who have had scant experience with the education system, the first step on an educational pathway may be a personal enrichment or leisure course. Having proved to themselves their competence in dealing with such a course they then move further down the educational pathway to vocational training. Many will now be discouraged from taking that first step on the educational pathway, because the cost of the personal enrichment, leisure or hobby course will now be 10 per cent more because of the advent of the GST, if this government is successful in introducing it, once again limiting access to education for those who most need it. Last, but by no means least, we will see books and the Internet the subject of a GST—access to information in the information age taxed. What an absurdity.DK6HOCKEYMr Hockey—How?83LGillard, Julia, MPMs GILLARD—The member opposite asked me how. There will be a 10 per cent GST on the price of books. If you do not want to take my word for that and it has not been explained to you in your party room briefings, which is, of course, possible, then perhaps you will take the word of Sir Anthony Mason, the Chief Justice of the High Court of Australia from 1987 to 1995, someone I am sure even those members opposite would describe as an impeccable source. He puts his criticism of the GST on books as follows:My criticism of a GST on books is not simply based on the reading of books for educational purposes (including self-education). My basic point is that reading is so central to our lives that we should reject a tax that, though not a tax on reading, is inimical to the encouragement of reading.They are the words of Sir Anthony Mason on the GST on books—and it will also apply to Internet access. This is a bad tax for education and, therefore, a bad tax for Australia. It should be comprehensively rejected in this place.19:05:001606St Clair, Stuart, MPMr St CLAIR84BNew EnglandNP10—I will try not to go over ground that has already been discussed in this place, but I would like to point to the Prime Minister's 13 August 1997 announcement when he put forward the five principles for taxation reform. They are worth going over again: there should be no increase in the overall tax burden, any new taxation system should involve major reductions in personal income tax with special regard to the taxation treatment of families, consideration should be given to broad based indirect tax to replace some or all of the existing indirect taxes, there should be an appropriate compensation for those deserving of special consideration and reform of the Commonwealth-state financial relations must be addressed. I believe that is what A New Tax System (Goods and Services Tax) Bill 1998 and related bills are doing.The new tax system to come from this will include a broad based consumption tax which will apply to most goods and services. With the introduction of the new tax system, wholesale sales taxes will be abolished plus, in consultation with the states, the following nine types of taxes are also to be abolished: financial institutions duty; debits tax; stamp duty on marketable securities; conveyancing duties on business property; stamp duties on credit arrangement, instalment purchase arrangement and rental hiring agreements; stamp duties on leases; stamp duties on mortgages, bonds, debentures and other loan securities; stamp duties on cheques, bills of exchange and promissory notes; and, of course, that iniquitous tax, the bed tax.The abolition of these taxes is vital to reduce the cost of doing business. With the present system, over half the money raised from the wholesale sales tax comes from taxing goods purchased by business. It imposes a hidden tax on export and import competing industries. The introduction of the new tax system will change this. Businesses will be entitled to full input tax credits and the hidden burden will be removed. In fact, business costs will fall by more than $10,000 million as a result of the GST and the abolition of current inefficient and unfair taxes.The people of New England and regional Australia in general have been screaming out for major tax reform for years. The present tax system, which includes Labor's wholesale sales tax regime, has proven to be outdated and now unworkable. Mr Acting Deputy Speaker, I would like to point out to you and the honourable members of this House some of the anti-business anomalies that exist in the old Labor wholesale sales tax regime.If, as a sawmiller I purchase a chainsaw to cut logs to length to place in the mill for sawing, the purchase of that saw is exempt from sales tax. However, if I purchase a chainsaw to cut a piece of timber off to sell to a farmer or builder then sales tax is applicable. If I purchase a forklift to feed logs into the sawmill I can purchase that forklift free of sales tax. However, if I purchase a forklift to load the finished timber onto a truck for delivery to a customer, whether a farmer or builder, then the purchase of that forklift is subject to sales tax.Another antibusiness effect of the old Labor wholesale sales tax in New England can be illustrated by looking at the Tamworth tractor sales and service business of Goodwin and Kenny. This progressive small business sells and services tractors all over New England and the north west. However, when that small business goes to purchase a new service vehicle or a number of service vehicles so their mechanics can maintain the tractors they sell, they have to pay 22 per cent sales tax on them. This really is a crazy situation as this adds to the costs of production for farmers in this area and therefore adds to the cost of our exports. The new tax system will remove these impediments to doing business.During the 10 months that I was campaigning in New England, leading up to the release of the new tax system and the federal election, the other issue that was raised with me more times than I can remember was: `When is the Australian government going to bring in a tax system that is going to reward effort?' This is exactly what this government is in the process of doing for the working men and women of New England and this country by introducing this legislation.There will be one tax rate of 30 cents in the dollar for those earning between $20,000 and $50,000 a year and another tax rate of 40 cents in the dollar for those earning between $50,000 and $75,000 a year. This will give a substantial saving to working men and women. When overtime is offered to many workers they feel reluctant to do the extra work because under the present out-of-date system they are taxed out of existence and therefore not rewarded for that extra effort. The worker suffers, the employer suffers and therefore the nation suffers. These new tax rates will significantly alter this prospect and we can look forward to seeing both the employee and the employer rewarded for their extra effort and work. And that will lead to more jobs.Regional Australia relies heavily on the transport industry, and New England is a main part of that. We need to transport the products we grow and manufacture to the market. We need to bring out to the country those inputs that help these businesses become more competitive and therefore more profitable. The transport industry has been hit hard over the years in the taxes it pays. It pays 2½ times the tax paid by other industries. I am not sure that many honourable members of this House are aware that the diesel excise, for example, has gone from 3c per litre in 1983 to 34.7c per litre plus a further 8.1c per litre, which is collected on behalf of the states. Every rise of 1c a litre in the price of diesel adds about $115 million per year to the costs of road transport in this nation. The rate of diesel excise rose by 16c a litre in the 10 years between 1987 and 1997.Let us look at the present Labor sales tax system and see what it does to the costs of transport in this nation. There is 22 per cent sales tax on truck purchases. That translates into about $50,000 for a new prime mover. There are exemptions in the present system for some safety items such as seat belts, yet not for others, such as brake parts, et cetera. Confused? So is the tax man.Even back in 1990 when most of these taxes were much lower, research showed that the tax burden added 5.4 per cent or $11,000 a year to the costs of operating a heavy vehicle in Australia. In the 1990-91 year the industry paid a total of $2.4 billion in registration fees and fuel excise. This year it will pay close to that in federal fuel excise alone. There needs to be a significant change. High diesel excise hurts not only the transport industry but also all Australians. The trucking industry is highly competitive and operates at world's best practice for freight haulage. But when faced with this tax slug it must pass at least some of its costs onto the customer. Since the customers of the trucking industry include virtually every other industry in not only regional Australia but the whole of Australia, the whole economy is affected. Those other industries pass the buck, literally in this case, onto consumers of their products wherever they can. This means our products are more expensive and therefore less competitive when those products go onto the overseas markets. Lower profit for the export companies, fewer jobs in Australia and fewer export dollars flowing into the economy will be the results of continuing short-sighted fuel tax policies and the non-introduction of this new tax system.If Australia is to remain internationally competitive, and we need to, we need to look at ways to reduce the costs to industry, particularly the agricultural, mining, fisheries and forestry industries largely based in regional Australia. These industries contribute 80 per cent to Australia's merchandise exports. With the new tax system, exports of goods and services will be GST free. The new tax system will reduce the cost of producing goods and services for export by $4½ billion—a significant sum of money. This will be done by the removal of Labor's hidden taxes and therefore the promotion of growth and increased job prospects.In conclusion, the current tax system is neither simple, fair, nor efficient—and simplicity, fairness and efficiency are the basic principles of the new taxation system. While the best plan the opposition has is to fiddle with our present taxation system, that is not the answer. Nor is the answer in the plans of the Democrats to increase exemptions, because that will just narrow the tax base and complicate the system. The Labor Party and the Democrats are playing a political game in the Senate with their inquiries, at the expense of the Australian population. Too much time has been spent talking about change. They should not be allowed to attempt to dismantle this new tax system, which I believe is basically a simple, fair and efficient tax system for the benefit of all Australians.19:16:001608Lee, Michael, MPMr LEEMG4DobellALP00—I rise to speak on the A New Tax System (Goods and Services Tax) Bill 1998 and cognate bills. In his contribution today, the previous speaker, the honourable member for New England, said that the tax cuts were about rewarding effort. You can understand the sorts of people the government is targeting in this attempt to reward effort when you look at how the government's income tax cuts are distributed. The coalition's income tax cuts total almost $13 billion, and yet the top 20 per cent of income earners receive 52 per cent of those income tax cuts. Some $6.6 billion of the $13 billion in income tax cuts goes to people in the top 20 per cent of incomes, whereas only 48 per cent of the income tax cuts go to the other 80 per cent of Australians—the battling families which the Prime Minister speaks about so much.VH4McARTHURMr McArthur—You don't believe that, do you?MG4Lee, Michael, MPMr LEE—My friend the honourable member for Corangamite interjects and claims that I do not believe these figures. This is what your own document delivers. In an attempt to reward effort, it delivers half of the tax cuts to the top 20 per cent of the popula tion, and the other half is spread out very thinly amongst battling families. Quite clearly, the Labor Party opposes the government's plans to introduce a goods and services tax because the tax is unfair and unnecessary and will be an administrative nightmare for the million or more Australian business men and women who will have to collect the government's new tax.This is the tax debate we should never, ever have had. The Prime Minister made certain undertakings before he was elected to the office of Prime Minister. He was interviewed outside the Tweed Heads Civic Centre—a very nice part of the world—on 2 May 1995. He gave the following interview:JOHN HOWARD:"There's no way a GST will ever be part of our policy."REPORTER:"Never ever?"JOHN HOWARD:"Never, ever. It's dead; it was killed by the voters at the last election."On the same day, in a press release, the Prime Minister said:A GST or anything resembling it is no longer Coalition policy. Nor will it be policy at any time in the future. It is completely off the political agenda.It is quite clear that the Prime Minister has broken the undertaking that he would never, ever introduce a GST. We say this is an unfair tax because it hits the necessities of life. It is going to force ordinary families to pay a 10 per cent GST on food, clothing, telephone bills, water bills, electricity bills, and even on garbage collection services in some council areas. We believe it is unfair to put a new 10 per cent GST on these essential items. It is also a tax on learning—on books, private tuition, using the Internet and musical instrument hire. It is a tax on sickness—on simple medicines like pain-killers, cough syrup and bandaids.The large number of retirees in my electorate are going to be hit by this government's introduction of the GST. One retiree in a retirement village on the New South Wales Central Coast has advised me that his retirement village, which accommodates about 100 residents, currently spends about $150,000 on the upkeep of the village—looking after the grounds and gardens, and mowing the lawns. A 10 per cent GST on that retirement village's costs will increase them by $15,000 a year. That amount will have to be paid by the 100 residents of that retirement village—no-one else is going to pay that money. It is quite clear that services in areas such as that are going to be hit by almost the full 10 per cent increase as a result of the imposition of the GST.The government also claims that retirees should be grateful to the government in some way because the government guarantees in the package to increase pensions by four per cent. We all know that because the government was pressured by the Labor Party, the Democrats and other senators it was forced not only to agree to fix pensions to increases in the CPI, but also to agree to maintain pensions at 25 per cent of male average weekly earnings. That means that pensioners will receive a 3½ per cent increase by the time this GST comes in. It is like someone whose birthday is on Christmas Eve. On Christmas Eve, the Howard government gives pensioners a birthday present of a 3½ per cent increase in their pensions, and on Christmas Day it says, `We are going to give you an extra half a per cent to compensate for the massive impact on the cost of living of a 10 per cent GST.The minister at the table, the Minister for Community Services, Mr Truss, frowns—he is a bit lost by that argument, so let me go through it again. The minister and other members of the coalition have been running around saying that pensioners will not be worse off because of the 10 per cent GST because they will receive a four per cent increase in their pensions. That is, the Prime Minister is telling pensioners that they will get the four per cent increase by Christmas Day.What he does not tell them is that, on Christmas Eve, they are entitled to the 3½ per cent increase anyway because of the legislative requirement to maintain pensions as a percentage of male average weekly earnings. You know it—you are the minister who makes sure those cheques are delivered on time. You know that 3½ per cent of that four per cent is already in the post—it is required by legislation. So only one half of one per cent of extra compensation is paid by this government to pensioners to compensate for the increase of the 10 per cent GST. It is quite clear that many of them are going to be badly hurt by this.There is no guarantee that the GST will stay at 10 per cent. We all know that in 21 of the 23 OECD countries that have brought in a GST the rate has risen. Our old friends across the Tasman, New Zealand, introduced their GST at 10 per cent; it is now at 12.5 per cent. In Denmark the original rate was 10 per cent; today it is 25 per cent. In Sweden it was 11.1 per cent; now it is 25 per cent. In Finland it was 11.1 per cent; now it is 22 per cent. In the United Kingdom it was introduced at 10 per cent; now it is at 17.5 per cent. There is no way we can have any confidence that the GST will not be increased above 10 per cent at any time in the future.We also have the government being very quick to bring the legislation into the parliament to impose the 10 per cent tax on almost everything, but there is no sign of the legislation to close the loopholes in the Income Tax Act or in company tax. We have had no indication from this government of when they intend to clamp down on Australian individuals, companies and trusts who are not paying their fair share of tax. That is an issue I will return to later if I have time.I would like to turn now to education. Despite the fact that the government spent $17 million of taxpayers' money on television, radio and print ads before the last election, the government misled the Australian community. The government spent $17 million of taxpayers' money, and almost every ad said that education would be GST free. By the way, every time you saw one of those ads on national television, that was six months or more of a teacher's salary. For every one of those ads that you saw on prime time national television, we could have employed a teacher in your electorate, Mr Deputy Speaker Mossfield, at one of the schools that are there trying to make sure that we can improve the chances of young kids, as is the case in schools right across the country. It was a tremendous amount of taxpayers' money diverted to this government's political purpose of selling this 10 per cent GST.While the ads on TV, paid for by the taxpayer, arranged by the Liberal Party, said that education was GST free, when you look at the fine print you realise that there is a GST on private tuition for HSC coaching at home, there is a GST on remedial reading which is provided at home, there is a GST on the hire of musical instruments, there is a GST on swimming and dancing classes, there is a GST on school uniforms, there is a GST on schoolbooks, there is a GST on school shoes, there is a GST on school lunches and there is a GST on school bus fares and rail fares. There is going to be quite a heavy burden placed on the parents of children attending school because of the imposition of this GST.Today at question time we had the example of the Minister for Education, Training and Youth Affairs refusing to admit what we all know is true, and that is that there is a 10 per cent GST on remedial reading, on coaching and tuition provided at home by companies such as Power Coaching and McGrath. The minister knows that there is a 10 per cent GST on those payments but he could not bring himself to admit it. After two days of questions in question time, he could not bring himself to admit that, if you can afford to send your children to an exclusive private school where the tuition is included in the annual school fees, you do not pay GST on the remedial reading coaching, the HSC coaching, the sport coaching or the music lessons. But the ordinary families who pay one of these companies to provide a teacher to come to their home will be hit with the 10 per cent GST.There is no fairness in that. But the minister for education just refuses to admit what we all know is true: that there is a 10 per cent GST tax on the tuition provided in people's homes. We wasted an hour or more of our time this afternoon in dissent motions and people getting named and suspended because the minister for education could not bring himself to come to the dispatch box and just say the word yes—yes, there is a 10 per cent GST on private tuition in homes. We could have saved so much effort if the minister for education could have had the honesty to admit that today.It is hard to think of a more essential tool for education than books, yet this government is going to impose, for the first time ever, a tax on books. This new GST is in fact a tax on learning. This tax on learning will hit textbooks for primary and secondary school students, making it harder for parents to afford everything they need for their children's education. This government's stupid book tax is going to make it much harder for university and TAFE students, already struggling to find hundreds of dollars a year for their costly textbooks.Mr Truss interjecting—MG4Lee, Michael, MPMr LEE—You are not only going to tax their exercise books, you are going to tax their textbooks. You are going to tax every book that they use.GT4TRUSSMr Truss—They are going to get a tax cut.MG4Lee, Michael, MPMr LEE—The minister at the table says that they are going to get a tax cut. That will be small consolation to the parents of kids who are going to primary and secondary schools in his electorate who have to pay a 10 per cent GST on book hire and who will have to pay a 10 per cent GST on the children's books that they buy for the kids to encourage them to read. We are all about trying to encourage kids to love reading, to enjoy feeling a book between their fingers and to enjoy reading, which does so much to build up their capacity to learn in life. Here you are imposing a 10 per cent GST on books that parents buy for their kids.Mr Truss interjecting—MG4Lee, Michael, MPMr LEE—The minister does not seem to understand that when university students pay money to use the Internet at the university that will have a 10 per cent GST imposed on it. If you use the Internet at home, you will be paying 10 per cent GST on top of your telephone bill and on the other Internet charges that families are hit with. So the minister does not know what he is talking about. Many university and TAFE students will also have to pay the GST not only on their books, on computer software and on the Internet but also on food, clothing, transport and those electricity and phone bills. Many of these students are already living on low incomes while they are studying, and it will be a tragedy if this tax on learning forces them out of education and employment training.The government is also going to impose a massive administrative burden on many people involved in education in Australia. These massive costs of complying with the GST will have a serious effect on many educational institutions. The government's tax consultative committee has already recognised this as a serious problem. At the moment schools can claim wholesale sales tax exemptions for computers. Currently schools and universities are exempt from wholesale sales tax, but under the GST they will have to pay an extra 10 per cent for just about everything they buy and then claim a refund.They will have to upgrade and update their accounting systems, retrain their staff, change stationery and also plan for and deal with the massive disruptions and interruptions to cash flow. I have already had one representative of one school body tell me that he estimates the cost for his school will be the equivalent of one teacher's salary—so, instead of employing more teachers, we will be spending money on accountants and on upgrading financial systems to pay this new GST.One of the great chilling things about this particular piece of legislation is that in the Treasurer's second reading speech there was so little devoted to education—in fact, he made an error in that speech which makes it very clear that he has very little understanding of the devastating effect the GST is going to have on education. He said in his speech that education courses would be GST free for `all secondary and tertiary courses, including vocational courses, provided students are eligible for income support'. This is simply not correct. The legislation makes it clear that the exemption applies to the course and not to the student. This is the sort of mistake that happens when the government puts such a low priority on education and puts such little effort into making sure that the detail of the package is dealt with in a fair way.Many Australian families out there will be hard hit by that extra 10 per cent GST on the necessities of life. Low income families spend more on food and on the necessities of life than people who have high incomes. Low income families will be the families that will be hardest hit by this government's unfair GST package.19:31:001612Nugent, Peter, MPMr NUGENTUT4AstonLP10—I rise to participate in this debate, having heard a lot of speakers before me canvass much of the ground. I want to phrase my comments in the context of how I think people in my electorate—which is an outer suburban seat in Melbourne—by and large tend to view things. I think one of the lessons that the opposition have not yet absorbed—it is one of the reasons that they lost the last election—is that, first of all, people understand that the tax system does need some changes. Secondly, we laid out a very clear program in that respect, and people have accepted that. Thirdly, I think they believe that the members who sit opposite have very little credibility when it comes to economic management generally and tax reform in particular.The reason that there is very little credibility is that there is a history of chopping and changing over the years. We fought the 1993 election with the Fightback package, which included a goods and services tax. We did the same thing this time. In the early 1980s, the opposition—the then government—was very much going down the same track. At that time, Paul Keating was very keen that the Labor government should introduce such a tax. Subsequently—quite clearly for political motives—he changed his position. I was a member of the Liberal opposition prior to and after the 1993 election. The Keating government went into that election saying, `You don't need a GST. You don't need a consumption tax. You don't need major restructuring of the taxation system in this country. You can achieve all of those things. We can give you personal tax cuts.' We all remember the l-a-w tax cuts. Mr Keating stood up in this place and boasted loud and long that it was all in law, that it was legislated and that it was going to be there. But, after he had won the election and we came back to this place, the tax cuts were not implemented—people were cheated because, clearly, it was a false promise.What people did not realise then—but they understand now—was that at that time the Keating government raised all the wholesale sales taxes and also introduced wholesale sales taxes on a range of other items. Because it was a hidden tax—and remains largely a hidden tax to the public in terms of its detail—people did not realise what was happening. But I think the electorate have cottoned on now—I think in 1993 they did not understand it—and they now understand that that is the case. That is one of the reasons why we were able to win this election—we put what we are all about honestly on the table and they understood what we were fundamentally talking about.The other aspect of that was that we have credibility not only because we have turned the economy around—and the economy is stronger now than it has been for many, many years in all sorts of respects—but because, when we were elected in 1996, the family tax package we had promised before the election was delivered on time and in full. This side of the House has a record of delivery and of doing what it says it will do. The other side, frankly, does not.It is important that we understand the principles of what we are talking about in this debate. We are not talking about adding 10 per cent on top of everything that exists at the moment. The reality is that there will be a goods and services tax that will apply to most things at the rate of 10 per cent. There are some notable exemptions but, by and large, it will apply to most things. But, before the GST is applied, there are a whole raft of existing taxes—the worst of which is the wholesale sales tax—which are going to be sucked out of the system. At the moment, in most areas—even where the wholesale sales tax does not apply directly—they are there as an embedded cost further back in the production and distribution chain.What we are about is restructuring the tax system to make it more equitable, to try to make sure that people have a better deal with income tax and to try to assist our overseas exporters. One of the reasons we can say with great confidence that we are not adding an extra impost on the Australian people is that we will be collecting less tax overall under the new system than we do under the existing system because we have a surplus on the budget. We are handing back to the Australian people—the shareholders in Australia—a part of that surplus, effectively as a dividend.In restructuring the system, yes we are going to have the GST but we are going to make sure that, where people are going to be adversely affected purely in terms of the GST, they get compensation in one form or another, depending on their circumstances. So if you are a pensioner, you get a pension increase. If you are a self-funded retiree with some money in the bank, because the cost of living will go up by 1.9 per cent or thereabouts and therefore your nest egg is slightly devalued, you will get a lump sum to compensate so that your nest egg is not devalued. If you are paying income tax, you are a salary earner or a self-funded retiree with dividend stream and so on, then of course you get the benefits of the income tax cuts. So everybody gets compensated to some extent. It seems to me that that is a very good way to approach things.The reason we need to do some of these things is that the present system is frankly very broke indeed. My electorate in fact has a very high proportion of young families, and those young families are doing it quite hard in the area of taxation, and have been doing so for quite a long time. I quote from the Kevin Andrews book Changing Australia. This is a very good basic reference book; it is not a book of opinion. It actually quotes good sources—the ABS and others—on factual information. I read to the House a short extract from that book on the subject of families and taxation which will give the House, I hope, an idea of why we need to change the tax system:It has been estimated that by the early 1990s, a family paid two and three-quarters times the tax paid in 1996-97, while the single person paid one and two-thirds times as much. Much of the increase in tax paid has been the result of bracket creep, the process by which taxpayers move into a higher income tax bracket, or more of their income falls in a higher income bracket. A reduction in the number of tax brackets from 29 in 1973-74 to 4 in 1978 contributed to this increase in taxation.According to Dr Alan Tapper, (author of The Family in the Welfare State ) between 1960 and 1990, the effective tax rate on individuals rose by 83 per cent, and the effective tax rates on the family rose by 360 per cent. The "effective tax" rate takes into account both taxation and benefits. Dr Tapper claims that in the Australian welfare state today, there is a large transfer from young households to old (over 55) households, sole-parent families are substantial beneficiaries of the welfare state, and two-parent families are net losers, contributing more in taxes than they receive in benefits.It is also interesting to note that in 1987 Mr Don Edgar, then Director of the Australian Institute of Family Studies, said:. . . a one income family with two children required an income of $42,900 a year in order to have the same standard of living as a single male on average yearly earnings of $24,000.So that is why I want to see tax reform for my electorate, which has a very high proportion of young families, because families have gone backwards in the last few years in terms of the taxation system. And therefore I want to see that situation adjusted, and what we are proposing in this legislation is aimed very much at making sure that young families get a better deal.I think it is also important that we look very carefully at the proportion of taxation that governments raise from various sources—both through the indirect taxation system and from the personal taxation system. Again, I would like to quote from the same source:The Australian taxation system relies disproportionately on the taxation of income, particularly investment income, relative to consumption. Over the past decade, personal income tax as a share of total Federal Budget revenue has risen from 35 per cent to 54 per cent. This compares to an average of 31 per cent for nations in the OECD. Overall, personal income taxation in Australia (across all levels of government) is 40.1 per cent of all taxes collected, compared to an OECD average of 27.5 per cent.I think that one of the most telling condemnations of the current tax system is found in marginal tax rates. Professor John Freebairn argues: Australia's progressive tax structure disadvantages low income earners. While wages are taxed in a progressive way, the phasing in of the Medicare Levy and the phasing out of social security payments has meant high marginal tax rates (the tax on the money you earn) for low income earners. The top rate of marginal tax cuts in at about 1.3 times average weekly earnings. A decade ago, it was 1.6 times average week weekly earnings. In 1954-55, it was 19 times average weekly earnings.So it seems to me that that whole process demonstrates that there is a lack of incentive for people to go and earn money, to work overtime, to try and seek that job, or to invest in business in some shape or form, because in terms of personal income, frankly you just do not get to keep enough of it to compensate you for the efforts you have to make. Therefore, it is very important that we restructure the tax system in that respect as well—not only to look after families but also to make sure that those who are creating the wealth in our society, who are doing the right thing by Australia, who are doing that hour of overtime, who are seeking that promotion, in fact get a bit more of what they earn.I would also like to say a couple of words about a subject the opposition seems to be very hung up about when it comes to question time in particular but that we have also heard about in some of the speeches—that is, the question of complexity of the system. We get a lot of detailed questions from the opposition such as `How's the GST going to work in this respect?' and other questions about some bit of petty detail.But if anybody subjected the present tax system to even a fraction of the scrutiny we have seen of the government's tax package I think we could be here all night every night of the year, frankly, trying to sort out the complexities—like the number of different rates there are and the definitional problems. There is a whole army of people in the tax office in this country just trying to sort out definitional problems: what's a biscuit; is a chocolate biscuit a biscuit or is it food, or is it something else; is it sweets; is it confectionery? And you can go on through a whole range of items where the definition is very hard. I regularly have constituents come in to see me—I know most other members in this place do too—about wholesale sales tax problems in their particular business. They have trouble getting definitions out of the tax office: are they wholesale sales tax exempt? What rate should apply? And so on and so forth. So, if you want to complicate the system, look at the present system. I can assure the House that what we are proposing is a jolly sight more straightforward than what we have at the present time. What we are proposing will cut administration costs compared with what the existing system does.In the brief time I have got left I want to speak about Australia's place in the world economy and the need for us to export. One of the handicaps that Australian businesses have when they compete overseas in exports is that, built into their price, are a lot of these wholesale sales taxes and the other taxes which we plan to abolish with our legislation. They are built into the chain of production right the way through from go to whoa. That is not helpful to them when they compete with overseas markets. This system will make sure that those taxes come out of the price so as to make Australian businesses more competitive overseas. That will mean they win more contracts, which means their production will go up, which means they will create more jobs. It seems to me that the creation of jobs is pretty important for this country.The Asian economic crisis, which we have withstood remarkably well, so far—we would obviously be complacent if we felt that it was not going to impact on us to some extent; nevertheless we are withstanding it fairly well—has damaged our trade. Our trade with Korea is down, our trade with the ASEAN countries is down from a very healthy surplus to a negative balance. That will, of course, recover. The more competitive we are in the marketplace as the Asian economies recover so much the better, because they will be out there competing hard to build their economies again. We need everything on our side to make sure that we can compete.It seems to me that, whether we are talking about who has got the runs on the board or who the best economic managers are, whether we are looking after families properly, whether we are taking our taxes for government expenditure from the right place and have the balance right, whether we are looking at marginal rates of tax and incentives, whether we are looking at simplifying the whole process or whether we are helping Australia's export economy, this tax package will be an outstanding success for all of those reasons. I commend the bills to the House.19:47:001615Hoare, Kelly, MPMs HOARE83YCharltonALP00—I rise in this House to join my parliamentary colleagues in opposition to this package of 16 goods and services tax bills. I want to reiterate our vehement opposition to this unfair, gross tax. First of all, I want to talk about where this government is coming from and its capitalist agenda.Notwithstanding this government's first term when it launched a savage attack on Australian workers which benefited only those multinational companies which the government supports, we only need to look at the first two months of this particular term to see the further savage attacks on workers, including the proposed introduction of youth wages, the exclusion of superannuation from workers' basic rights and the reintroduction of amendments to the unfair dismissal laws. Now we have the current proposals before this House and before the Senate.All these proposals leave us in no doubt that this is a government for big business and the extremely wealthy. The proposals currently in the Senate and which passed through this House last week include a health insurance rebate designed to provide large cash bonuses for the 70 per cent of people who earn over $70,000 a year and have private health insurance—a cash bonus which is not means tested. This means that those wealthy individuals who can afford the highest health premiums will receive the highest bonuses.Further to this government's agenda we now have in front of us these 16 bills on a GST. The Labor opposition have been clear in our opposition to a GST. We stated our position in May—five clear months before the government introduced the tax package. Our leader made it clear in his budget reply speech in May that a vote for Labor was guaranteed to be a vote against a GST; moreover, that a vote for Labor would be a vote for fairness in the taxation system.The GST is regressive, unfair and unjust. It is all of these things because it will be imposed at a flat rate. This means that all consumers will pay it, irrespective of their wealth. Therefore, it will be a tax imposed on what is spent rather than on what is saved. Lower income earners will pay a higher proportion of their income in tax than will higher income earners who can afford to invest part of their income. This tax replaces part of the direct income tax which was designed to ensure equity and structured so that those with higher incomes were taxed at a higher rate. Therefore, the revenue derived from a GST paid by lower income earners will compensate for the reduced personal income tax paid by high income earners.The tax will be placed on basic household needs such as the food that families eat and the bills that families pay to live their lives every day. A GST will be detrimental to the economy because the inflation rate will increase because all goods and services will increase in price. Nobody can deny this. The government cannot sit back and say that a 10 per cent goods and services tax imposed on all types of goods a person buys and every service a person uses will not have any effect on the inflation rate. Interest rates will increase and this will affect home buyers, small businesses and farmers.More than one million retail outlets and service providers will have to shoulder an unfair burden of administration because they will be forced to become tax collectors. Therefore, higher prices, higher interest rates and higher administration costs will stifle enterprise, discourage small business production and discourage small business employment.Tax reform can be achieved, though, through other measures, measures which this government has failed to address in its first term and has also failed to address in this piece of legislation. These measures can include removing the anomalies in the present wholesale sales tax system, adjusting marginal tax rates to eliminate bracket creep, eliminat ing law provisions which enable the rorting of the tax system and effectively policing the tax system to stop tax evasion. As we have all heard, the introduction of a GST in other countries has shown that the initial rate at which it was introduced has increased in all but three countries.The countries where the GST has risen since it has been introduced are Denmark, Sweden, Finland, Luxembourg, United Kingdom, Japan, Italy, Germany, Mexico, Turkey, Netherlands, Thailand, Spain, Ireland, Austria, New Zealand, Iceland, Belgium, South Africa, Norway, Greece, Portugal, France, Canada, Switzerland and Singapore. These countries also show that the built-in compensation measures are soon eroded, leaving the most disadvantaged and vulnerable to the burden of continually increasing tax. Core services such as education and health, which are provided by our states at the moment, become so expensive that lower middle income families cannot afford them.The previous speaker, the member for Aston, spoke on the compensation measures which are provided in some of the 16 bills. Why would compensation measures be needed to be taken if the tax was not unfair or unjust? If it were a fair tax, there would be no need to provide compensation for anybody in the community.I turn to the question of a mandate. This government has been claiming since the 3 October election that it has a mandate to introduce the GST, the same as it claimed to have to privatise the rest of Telstra and to further attack workers' rights and conditions. I reiterate what I mentioned in my first speech, and that is that this government does not have a mandate to do any of these things. It has a mandate to govern and to govern well. It is a government which was elected with less than 49 per cent of the two-party preferred vote. Of the primary vote, less than 40 per cent of people cast a vote for the coalition in favour of the GST, which means that 60 per cent of the electorate voted against it.I call upon this government to show a bit of respect for democracy in this country and, if it talks about a mandate and talks about the will of the electorate, to hold off on this piece of legislation and not introduce it into the Senate until those senators who were elected on 3 October take their places on 1 July next year. Then we will see what the Australian people voted for, that is, a Senate composed in such a way as to knock out a GST, to knock out this unfair and regressive tax.The points that the member for Aston made on Labor's history of tax reform require a bit of correction. Labor had an excellent history on tax reform. Between 1983 and 1996, the Labor government achieved cuts in personal income tax, as well as providing extra assistance to families through the social security system. We did that without having to introduce a GST. The cuts to personal income tax achieved over 13 years of Labor included changes in the tax-free threshold from $4,595 in 1983 to $5,400 in 1996, decreases in the lowest tax bracket from 30 per cent to 20 per cent, decreases in the highest tax bracket from 60 per cent to 47 per cent and significantly reduced tax brackets in between to create fairness and equity in the tax system.The changes also addressed bracket creep, which not only is being ignored by this government but has even been used to create a budget surplus built on the backs of struggling families. If this government had addressed the issue of bracket creep, it would have had a $2.5 billion budget deficit this year, not a surplus. This means that the surplus was delivered to the government from low and middle income families whose wages increased with inflation and thus moved into higher tax brackets.In conclusion, the revenue provided by the GST is based on the government's forecast of 3.5 per cent growth in the economy. We have seen recently that the forecast growth is not going to be 3½ per cent but going to be two per cent or less. So all Australian families will get a 10 per cent GST but the government will not be able to afford the sweeteners. It will not be able to afford the income tax measures or the compensation measures. The states will have to increase the GST to be able to supply quality education, free hospital beds and affordable housing. For this reason and for all the other reasons that my col leagues have spoken about, the Labor Party is in total opposition to this unfair growth tax.19:58:001617Thomson, Andrew, MPMr ANDREW THOMSONFB6WentworthLP10—I rise to speak on the goods and services tax legislation with a great sense of anticipation. I think I am the only member of the House who has had the privilege of operating a business in a jurisdiction which has a VAT or a GST in place, that is, Great Britain where I built a golf course before entering this parliament.Mr Kerr interjecting—FB6Thomson, Andrew, MPMr ANDREW THOMSON—I believe it was also a part of Great Britain, that being Scotland, whence the honourable member for Denison—or was it his forebears?—came. I had the privilege of doing business there and I found the system of VAT, which is really what we are talking about in this bill tonight, to be very simple and efficient. I was very surprised at the end of the financial year to see my accountant in Edinburgh to tally up the books and find out what tax obligations our company owed. On being asked whether I had paid our liabilities for VAT every month, I said yes, we had and that I had been over to the tax office at Dundee with the cheque book—there were many hundreds of people sitting there in cardigans and neck ties—to pay my VAT every month. My accountant said, `That's it for the year, Mr Thomson. You owe no more tax.'Upon coming back to Australia I was surprised to find it was a struggle to carry out the same sort of enterprise—that is, constructing a golf course—in a jurisdiction with a very complicated system of tax, to say the least; and to say nothing of the industrial relations and other regulatory environments. At the time, John Hewson was proposing Fightback, and I felt that it was a very good idea. As time passed, ironically enough, I followed John Hewson as the member for Wentworth. With the further passage of time the government has set the bills before the parliament. We now have a mandate to introduce a GST and the opportunity to vote on it, and I look forward to doing that with great relish.I want to raise a few aspects of the environment in which we are introducing a new tax system—not simply the domestic environment, which is a very healthy one in an economic sense, certainly at the moment—but also the horizon beyond our borders. I want to examine the notion of a GST and what it means in terms of the political will or strength that we must summon to take our country forward into a future that will be a much less certain environment than the one we have experienced—certainly in the last 10 to 20 years.Tax reform has certainly been a long time coming. You might say it started with the Asprey report. Judge Asprey, a judge of the Supreme Court of New South Wales, was commissioned by Billy McMahon to inquire into Australia's tax system. It came about, of course, that he delivered his report to Prime Minister Whitlam. But in that report he recommended a change towards a value added tax such as to shift the burden from direct to indirect taxation on the basis that the Australian economy at that time had changed a lot since the 1930s when the system of wholesale sales tax was introduced. Of course the service component of the economy at that time was seen to be very large.We saw the then Treasurer, Paul Keating, try and fail to introduce what Judge Asprey proposed in 1974. He was followed by John Hewson, as I said, with the Fightback package in 1993. Now, finally, we have succeeded with a new tax system. Firstly, in an electoral sense, in the 1998 general election under John Howard. And now we are here debating our package in the House.Plainly, a new tax system—one that is adapted to changes in our economy—can really only be a matter of commonsense. No-one would propose climbing Mount Everest with Sir Edmund Hillary's equipment. This would be an act of lunacy. You would be described as, perhaps, having left your senses behind. Nor, of course, would you seek to engage in a solo voyage by yacht around the world using pre-World War II communications equipment; hardly so, you would have everything as modern as possible to ensure your safety. Nor, of course, would anyone propose equipping our armed forces with Lee Enfield rifles to take on whoever it was posing a threat to us. This, too, would be seen as an act of lunacy.And yet what we are proposing here is adapting our system of indirect taxation to deal with the huge changes in the economy since the 1930s. This is opposed by people who, according to those examples I gave, would be climbing Mount Everest with equipment from the 1950s, or going to war with Lee Enfield rifles—people would simply describe them as mad.Taxing consumption in a transparent and uniform fashion is just plain commonsense. That is illustrated simply by the large numbers of countries in the world who now use a system of value added taxation rather than the one that we are burdened with. We share that dubious distinction with the Solomon Islands, Swaziland and another country that escapes me for the time being.9V5PYNEMr Pyne—Ghana.FB6Thomson, Andrew, MPMr ANDREW THOMSON—Ghana, indeed. Who is a greater friend of the people of the Solomons, Ghana and Swaziland than, perhaps, the member for Sturt and me? But they are no models of economic rectitude; and we should make it quite clear that we do not propose to follow them any further down the track in the way that they see fit to tax their citizens indirectly. We are about removing the burden from business inputs. That recognises the fundamental role or importance of wealth creation in our society—of value adding and the effect that has on employment and the health of our society in general.More than that, of course, it gives our government a much more secure revenue base. For any person who is interested in maintaining a proper welfare safety net—one that has served Australia well in the past and I feel we will need, perhaps even more so, in a more troubled future—the certainty that a GST will bring about is invaluable. And yet, there are a lot of people who complain about nothing else than the supposed effect or burden of a GST on consumers. This is a misguided notion because, in discussing or debating the quantum of income people have, you should not be addressing that question via the tax system. That was the basis of what the early Marxists were about and it was quite evidently a failure.The better policy is to either transfer payments through the welfare system—albeit, of course, judiciously so as not to encourage mendicancy among those receiving them—or simply to concentrate on increasing people's incomes generally by other policy measures. But, sadly, opposition to this reflects an anti private enterprise culture that still flourishes in parts of Australia today.I saw an example in the newspaper this morning with Mr Grollo's proposal to build the world's tallest building in Melbourne. In essence, I think this is a very good idea—it would certainly attract a lot of people to Melbourne. It is perhaps a symbol—not necessarily of greed, but of simple aspiration. He is wanting to put his city more in people's minds. And yet, predictably perhaps, a Melbourne churchman stands up and attacks the idea as reflecting a culture that is insecure and shallow. I do not think the notion of aspiring to be the best is insecure or shallow. I do not think that feeding Australian families by creating construction jobs is particularly shallow either. I think that sort of criticism is, frankly, a code for a hatred of financial success. It is a sort of contempt for people who try their best and who succeed by putting more energy and intelligence into their work.Tax reform is really symbolic of a national aspiration to do a lot better. Too many people seem to say, `This is the high tide of reform. If we do this, if we get it through the parliament, that's it, we can relax a bit and there will be days of wine and roses ahead.' That is hardly the case. Tax reform has to go much further. We have to work towards repealing the capital gains tax regime that this country is saddled with. I regard that as a temporary tax, one that was introduced in 1985, and I would dearly like to see it removed. I would also like to see a continuing effort to lower the burden of personal income tax. That will only deliver more incentive to Australians and make ours a more favourable country in which to invest.I think the future, at least in the short or medium term, is going to be a reasonably troubled one. I do not think it is going to be an easy ride ahead, propelled by more and more changes or improvements in technology, especially information technology. There is an orthodoxy abroad now that a rapid increase in the pace of information technology somehow or other assures prosperity. If that were the case, one might ask why economies which have a large stake in that particular sector, such as Japan and Korea, are doing so badly.I think there is a good chance that there will be a reasonably savage bear market in equities and bonds. I say so because I have always had great regard for a financial commentary magazine called the Bank Credit Analyst, published from Montreal, and the current editor of that organ, Mr Martin Barnes—who was interviewed in the weekly investment newspaper Barron's this week—points out some very stark facts concerning the 16-year bull market in worldwide equities and bonds. He points out that the compound real return on equities over that 16-year period has been 16 per cent per annum which, compared to a historical average of only 6½ per cent in compound real return, is very high and points to an extreme overvaluation of those equity markets. Likewise, the compound real return on bonds over that period has been 11 per cent per annum compared to a historical average of only three per cent. The falling interest rates since the early eighties having delivered that, it does point out that you cannot have a permanent bull market.As disinflation is perhaps coming to an end, the great danger is that the deflation in economies in Asia could very easily spread to the United States and European economies. The valuations are high, so high as to make it a great risk. The prospective price earnings ratio for the S&P 500 Index is now 26 times earnings. Historically, it has always been around 14 to 15. That puts me in mind of the all-time high on the Japanese stock index, the Nikkei 225, in about 1988 of about 40,000. The prospective PE then was just over a hundred. That was certainly the zenith of that equity market, but it led to a very savage bear market that is indeed still under way almost 10 years later.You look at that valuation, you look at the corporate restructuring that has gone on in the last decade and at the megamergers that are going on now as the very largest of corporations struggle to improve their profit margins and you have to say that those corporate profit margins must be almost at the peak of their natural cycle. Those megamergers of oil companies and of some banks are evidence of that.There is other fairly gloomy news on the horizon. Gross domestic product in Japan is still falling. Indeed, government debt in Japan has just overtaken, for the first time, the total quantum of annual GDP. Wholesale prices are still falling. There is no political will evident to carry out any genuine restructuring. Across the China Sea, the condition of credit in the Chinese economy is almost fantastically rotten in places. Some of their largest investment vehicles have been shut down before they fail of themselves and lead to great runs.Right next door to us there are some very destabilising forces gathering in Indonesia, perhaps the most destabilising forces to gather since the Cultural Revolution in China in the late 1960s. Likewise, in Indonesia there is a huge debt still owing to the Japanese banks. In my mind, all of this points to the need not for some pause in reform but, if anything, for an acceleration of it to make sure that we are not simply fireproofed against any short-term troubles in our own region but ready perhaps for a long period of falling asset prices globally—equities, bonds and other such things.This is no time to relax. For that reason, and for the many others contained in the bills themselves, it is essential that this House and the other place pass these bills so that we have the opportunity to introduce a new taxation system as soon as possible.20:14:001619Macklin, Jenny, MPMs MACKLINPG6JagajagaALP00—This package of GST and health legislation represents not only one of the most dramatic changes to Australia's taxation system but also the most secretive and poorly explained package of reforms that any government has ever tried to sneak through the back door of a parliament, especially in the area of health. The government went to the last election promising that health products and services would be GST free—GST free, it said. It papered over its broad promises, saying that the exact definition of which health products and which health services would be free of tax would be subject to a thorough scientific examination after the election.But that was just another non-core promise—made to be broken. The so-called scientific examination has now been completed, and many Australians have a fair right to be more than disappointed. They have a right to be outraged at being misled. It was a 17-day inquiry—no scientific inquiry at all.Health care is an area that historically has been free of tax. Public hospital services, medicines and other products and services have been free of most taxes. For Australian families, this government's decision to impose a GST on many health services and their day-to-day health expenditure is really another attack on the living standards of those families. Whether it is bandaids, cough and cold medication or aspirin, the whole medicine cupboard full of life's necessities is about to be taxed. No family would deny their children treatment for their day-to-day ailments, and no pensioner who relies on non-prescription medicines should have to pay tax on those necessary medicines.As the National Vice President of the Pharmacy Guild said today, `I don't like to see medicines being taxed'—and Labor agrees. We do not like seeing medicines taxed because medicines are essential for many Australians' quality of life.Under the Sales Tax (Exemptions and Classifications) Act 1935, goods `used' in the prevention of human sickness and items marketed in preventing and curing or treating sickness or disease have been sales tax exempt. This includes goods used in compounding or preparing drugs or medicines. The ambit is broad because it has been long realised that such goods should not be taxed and made more expensive.On 12 August this year, just the day before the government announced its 10 per cent GST, an important taxation ruling was handed down which again confirmed this position. This ruling by Michael Carmody, the Taxation Commissioner, established detailed guidelines to determine sales tax exemption for drugs and medicinal products, making it clear that, if a product is marketed principally as a drug or for medicinal use, it is sales tax exempt.But this government wants to change all that. This government wants to put a 10 per cent GST on essential everyday medicines that people buy over the counter and many health services on which they rely.Since the release of the report of the Vos Tax Consultative Committee, not all problems have been solved. There is, in fact, much confusion about what will have a GST applied and what will not. Some goods and services have been identified as GST free; others not. We now know that much of household expenditure on health will incur a 10 per cent GST. As I have raised during the week in the House, many over-the-counter medicines and health products on which consumers rely will have a 10 per cent GST added to their cost. There will be minimal offsets.There can be no doubt that these medicines are a major part of people's spending on maintaining their health. The ABS national survey found that, in a two-week period, 4.3 million Australians used pain relievers, 1.3 million used medication for coughs and colds, 1.7 million used skin ointments and creams and 4.6 million used vitamins and supplements. And what do they have to look forward to? A 10 per cent GST. Those items that so many Australians take for granted—Panadol, that is a medicine, Codral, Mylanta, Canesten, Strepsils, vitamins, bandaids, bandages, skin creams, sunscreen, sanitary products and many other items—will all be hit with a 10 per cent GST.The definition which the government wants to use to differentiate GST from non-GST medicines is as follows: firstly, prescription medicines—that is, those listed on schedule 4 and schedule 8 as listed under the standard for the uniform scheduling of drugs and poisons; secondly, the Vos report has extended the exemption to include schedule 3 items, which can only be sold by a pharmacist personally. But all other over-the-counter medicines sold in pharmacies—that is, classed as S2—or those health products available in supermarkets and other stores will have a 10 per cent GST imposed.This will create a world of complexity for the pharmacists. The classification of medicines into the above categories depends on all sorts of considerations—the type of packaging, the concentration of the active ingredients and how the product is to be used.The exact wording of this legislation introduces even more complications, as some drugs can be obtained either on prescription or without a prescription; and there will be circumstances where the same product will attract a GST depending on how it is obtained. A number of commentators have already warned about the potentially high cost to government of people unnecessarily going to their doctors and getting prescriptions for items, which previously they did not need to do.Items like sunscreens will also be subject to a 10 per cent GST—and, of course, their use has risen greatly in Australia due to skin cancer awareness campaigns. The government should learn from its own economic rationale: to increase the price of a health product, such as sunscreen, will discourage people from buying it. It is fundamentally wrong to increase the price of products such as sunscreens which are so important for public health.While prescription drugs are GST-free, over-the-counter goods, medicines and other health products represent twice the amount families spend on prescriptions each year. Already the government has broken its commitment to keep all health services GST free. It has eliminated a category of drugs which represent two-thirds of the spending of ordinary Australians on medicines. This was backed up today by Peter Downing, Vice President of the Pharmacy Guild, who said:. . . it's going to be pretty confusing, I think . . . more importantly, it's going to lead to confusion in the minds of our patients and it could disadvantage some people who need these medicines.The problem that also arises out of the application of the GST to non-prescription medicines is the possible extra burden to be placed on our health system as a result. As I said, people wishing to get their medications cheaper will now look to getting a script from the doctor for anything that they might need. Those who simply cannot afford an extra 10 per cent on the cost of their medicine would understandably do such a thing. There will be the obvious problems of increased visits to general practitioners and increasing spending on Medicare.The mess about which medicines will be taxed is yet another example of the government's legislation failing the simplicity test. The complications of the GST on medicines and other health products will be a nightmare for the small community pharmacist and for the millions of consumers who buy these products every week.Another area that I want to touch on relates to the implications of the GST for good health. Of course, all of us should be concerned to make sure that any changes to tax arrangements encourage people to use healthy products, with an emphasis on healthy eating in particular. But what do we see this government doing? Under the current tax system, food items which none of us could say are much good for our health are the ones that have wholesale sales tax applied. The ones that are good for our health—basic fresh fruit and vegetables and other foods like bread and milk—do not have sales taxes applied.This government wants to impose a 10 per cent GST on the very products we should all be encouraging people to eat: fresh fruit and vegetables, bread and milk—all the basics of life that go to a healthy diet. How can it be in the interests of Australia to discourage healthy diets when there is clear evidence that good nutrition has a significant impact on the health of the community?The government's GST package stated that activities to be GST free include `virtually all health, education and child-care services'. The principal reason, and the policy uppermost in the committee's mind when the Vos committee considered what range of health goods and services should be GST free, not surprisingly from this government, was not a compassionate one, as we might have expected, but simply:Applying taxes to health care would place the private health sector with its heavier reliance on direct fees at a competitive disadvantage with the public health system. So there was nothing about good nutrition and encouraging good public health in our community; there was nothing about those medicines which people use every day, such as Panadol and all of those cough medicines that families rely on. Those things are going to have a GST on them. The government did not give any consideration to the impact that that would have. It is another example of the government not protecting the essential services that Australians so rely on.According to the government, there are two categories of medical services that will be GST free: those that attract a Medicare benefit or those that are commonly used health services listed by the government. This list has been initially taken to be those items which the Vos report recommended should be added to the original services included in the tax package.There are a number of qualifications that we need to look at. The concession for hospitals, for example, extends to drugs, dressings, meals and accommodation provided in hospitals and nursing homes but not to other items that are commonly used. There are various other groups that are providing natural health services who have given us various concerns about the impact of the GST. For example, the Association of Remedial Masseurs are concerned that they are excluded from the definition of `common medical services'. They argue that there is a category of `natural complementary medicine' which includes chiropractors, osteopaths and physiotherapists within the exemption but excludes them.The Australian Acupuncture and Chinese Medicine Association have also raised the same issue with respect to acupuncture and traditional Chinese medicine. If acupuncture is delivered by a doctor, it is a recognised Medicare service. However, if it is delivered by a trained and qualified acupuncturist, it will have a 10 per cent GST.The Australian Traditional Medicine Society is likewise concerned that its members' consultations and health remedies sold to patients will be subject to the new Howard tax. The Physical Disabilities Council raises the inequity of exempting health care costs such as accommodation, food, drugs and meals in hospitals, nursing homes and hostels, but not for people living at home. This will create economic pressure for people to remain in institutions.The legislation limits the exemption to `medical appliances' for people with `an illness or a disability, and is not widely used by people without an illness or a disability'. Again, what is and what is not exempt is yet to be clearly defined. The Vos committee noted that it was `too difficult in practice to define the terms "severe medical condition or disability"'.Thus it is not clear from the bill what is in and what is out. The bill states that the supply of certain medical appliances for use by people with medical conditions or disabilities will be GST free. However, there is nothing to protect people with disabilities who need specific services that will fall outside the list identified within the bill. If that is the case, where does it leave the many people who may need special equipment or items due to disability? Basically, if you do not manage to get on the list, you pay the GST. I refer, for example, to appliances used by people with temporary disabilities, and services and equipment used by people who are carers for people with disabilities.The Physical Disabilities Council is concerned that the GST will apply to alterations to enable disabled people to live in their own homes: for example, kitchen equipment, removal of steps, voice activated equipment, door openers and many other types of disabled aids. The Deaf Society of New South Wales is concerned about the probable increase in costs of various technologies to assist deaf people as well as the application of the GST to sign language interpreter services. Some of these services are provided within public hospital settings but, increasingly, they are being provided outside in the private market. What does this mean in terms of the GST? The society has been trying to get subsidies to enable sign language interpreters to be present for medical consultations. The government's response is to increase the cost with the GST.This legislation is not the simplification of the tax system that the government promised it would be. It is a tax that raises as many questions as it answers. If the government gets its way and the legislation gets through the parliament, we will be a very long way from finding out just how badly pharmacies, doctors, hospitals, the disabled and Australian families are affected. This tax does not deliver fairness; it does not provide opportunity for all Australians. Instead, it has the potential to hurt many people in our society who rely on health products and health services. Health is a long way from being GST free.The Labor Party opposes this legislation and its effect on health and other essential services. The greatest misnomer in modern Australian political history is that given to the government's tax package. It is called `Not a new tax, a new tax system'. It is in fact for many Australians who rely on medicines and previously tax-free health services every day a massive and unfair new tax. It is a new burden for those in Australia who can least afford it, those who take medicines and rely on health services and products on a regular basis, people with children, those with disabilities, those who care for the sick, those people who look after their parents, those people who suffer from any number of ailments and those who require daily treatment. It was a bad tax at the election and it remains a bad tax now.20:32:001623Pyne, Chris, MPMr PYNE9V5SturtLP10—I think the House would probably agree that the member for Jagajaga has disappointed tonight in her performance on A New Tax System (Goods and Services Tax) Bill 1998 and related bills. She is not interested in the truth; she has demonstrated that most clearly. She has maligned and misrepresented the government's legislation in three particular areas. Firstly, she neglected to mention that health is GST free, especially in the areas of S3, S4 and S8 pharmaceuticals. In her speech, she said that medicines and pharmaceuticals would attract the GST, but the truth is that any medicine that is available by prescription, which includes Panadol—and she actually specifically named Panadol as something that was not GST free—is GST free, as are all those pharmaceuticals that have been scheduled as S3, S4 and S8 pharmaceuticals. Secondly, she ignored in her attack on the government that this bill will ensure a significant increase in the disposable income of all Australians, either through increases in the pension or other compensation, or in the income tax cuts which she totally neglected in her description of the government's bill.Finally, she said that exemptions in the health area create a world of complexity. The Labor Party, which is proposing many exemptions and supporting the Democrat exemptions in the Senate, particularly in relation to food, comes into the House and demonstrates such double standards in saying that there would be a wealth of complexity created by exemptions in health. I would have thought that if that were the case then creating exemptions in food would create a wealth of complexities for all Australians which this government is trying to avoid by having as few exemptions as possible.In fact, the member for Jagajaga also neglected to talk about the current inequities and complexities in the system that we are trying to abolish, the 1930s tax system that the Labor Party introduced and the Labor Party supports, and which has myriad complexities for all small business people—and chemists are included as small business people..This parliament is faced with two clear choices tonight: a choice to implement a new, progressive tax plan which will generate economic growth and secure Australia's future or a choice to persevere with an outdated, irrelevant, economic growth stunting tax system that is a throwback to the Scullin government of the 1930s. The Labor Party consciously chooses to preserve the outmoded and outdated wholesale sales tax regime, which is not relevant to 21st century Australia. The Labor Party stands beside the wholesale sales tax systems of countries such as Ghana, Swaziland and the Solomon Islands.Just to give an example of the complexities of the current system, recently there were sales tax rulings in two areas which added to that complexity. Labor supports a tax system which gives tax exemptions for general purpose road vehicles if they go across a road from one property to another but does not give a tax exemption if the vehicle goes down a road from one property to another.Labor supports a tax system which provides that frozen yoghurt is an exemption from the ice-cream exemption for wholesale sales tax on food. And how do we determine whether the product in question is frozen yoghurt? The Taxation Office provides that scientific data needs to be produced which establishes that the primary constituent is yoghurt and that the final product must retain a pH level of approximately 4½. It is an exemption on an exemption on an exemption, and the Labor Party supports it. A tax system tied up in knots by red tape such as this has no place in 21st century Australia. The Australia of the future has no place for Labor's economic policy vacuum.The coalition government has repaired Australia's economy from the fiscal vandalisation of the Keating-Beazley years and the recession which they gave us and which Mr Keating said we had to have. The next step for Australia is to capitalise on these strong economic foundations by implementing structural tax reform. As a measure of the government's economic credentials, in the last week we have seen—and Labor could never boast it—the Reserve Bank announcing an interest rate cut, taking official rates to a 30-year low of 4.75 per cent, and the release of the national accounts which confirm that Australia is the economic strongman of the Asian region with an economic growth of five per cent. If only Labor could have boasted those figures.WU5O'CONNORMr O'Connor—Oh, but we did.9V5Pyne, Chris, MPMr PYNE—Oh, yes? You boasted interest rates of 4.75 per cent? Ha! The Labor Party are now claiming that they could boast an interest rate of 4.75 per cent when we all know that Labor had interest rates of 22 per cent, 17½ per cent, 19 per cent—certainly never close to 4.75 per cent. The new tax system is an extension of the solid economic foundations built by this government to date. This legislation sweeps away an outdated, inefficient tax system that does not serve the needs of modern Australia.The new tax system rewrites Commonwealth-state financial relations. The new tax system will give income tax relief to families and average wage earners. The new tax system will provide more benefits for pensioners and self-funded retirees. The new tax system will help our exporters, delivering more jobs and increasing our standard of living.If Australia is to have a dynamic and rapidly growing economy we need to remove regulatory and other barriers which reduce incentives to work, save and invest. The current wholesale sales tax system—Labor's tax system—is a major impediment to Australia's economic growth potential and the living standards of all Australians. The current tax system—the tax regime that Labor is still standing beside—imposes high marginal tax rates at relatively modest levels of income and reduces the incentive for many Australians to earn more.Labor wants to keep the tax system that will, soon after the year 2000, see a taxpayer on average weekly earnings paying the top marginal tax rate of 47 per cent. It surprises me that the member for Corio, who is in a relatively marginal seat, would be standing alongside a tax system that will put every Australian into the highest marginal tax rate bracket after the year 2000. A fairer and simpler tax system will make it easier for business to understand the taxation implications of investment proposals. It consequently improves our international competitiveness and our standing as a place to do business by making our tax system transparent and by removing tax induced distortions. I am sure the minister at the dispatch box is hugely in favour of this tax system because he has been charged with the role of making Australia a financial centre for Asia and the world. I am sure he is doing that.In presenting these bills to the House, the coalition government are saying to the Australian electorate, `We are seeking a better Australia for the 21st century.' By voting against these bills the Labor Party are saying to the Australian electorate that they oppose the government's mandate for tax reform for their own political expediency, irrespective of the social costs. By voting against these bills the Labor Party are saying that they oppose the government's plan to abolish the unfair wholesale sales tax system with seven different rates between zero and 45 per cent. Labor will be saying to the Australian people that they want to keep a system where televisions, video recorders and so on—domestic items in the household—attract a sales tax rate of 32 per cent.By voting against these bills Labor are thumbing their nose at Australian families who will be between $40 and $50 a week better off under the government's tax plan. By voting against these bills Labor are abandoning pensioners and self-funded retirees by denying them the opportunity to share in the financial benefits of a new tax system. Labor are turning their back on small business, which has been crippled by an avalanche of paperwork from Labor's wholesale sales taxes, and on the abolition of nine incentive destroying indirect taxes by the states.By voting against these bills Labor are favouring the wealthy who have the financial means to access sophisticated arrangements to legitimately minimise their taxation liabilities. They are turning a blind eye to the black economy. Labor are putting at risk the government's ability to provide a stable and equitable revenue source to fund essential government services for the community. Labor are snatching the benefits from those eligible for the First Home Owners Scheme of a lump sum payment $7,000 to assist in the costs of buying a home. And by voting against these bills they are striking a blow against improved and more productive Commonwealth-state financial relations and a secure revenue source for the states.Labor are also cruelly denying 4.7 million more Australians from having a top marginal tax rate of 30 per cent or less and from sharing in almost $13 billion in income tax cuts every year. I think they will hang their heads in shame at the next federal election when the Australian people have the chance to endorse our new tax system and say what they think of the Labor Party.The government's tax plan has been subjected to almost two months of rigorous public debate by political opponents, the media and most importantly the Australian electorate. The Labor Party resorted to their usual tactic of running an outrageous scare campaign specifically targeted at the elderly in an attempt to distract the Australian electorate from their lack of imagination and policy development. It is unprecedented in contemporary politics for a government to go to the polls with a new tax system and win. Clearly the coalition, on any measure, has a mandate for tax reform.The necessity for tax reform for Australia's future has been recognised by successive governments for nearly three decades and recently by Mr Stanley Fischer from the International Monetary Fund. Mr Fischer, the first deputy managing director of the IMF, has endorsed the government's management of the economy and its policy framework, including tax reform. Tax reform was publicly identified by the Hawke-Keating government as a priority. In 1985 the Hawke-Keating government held the taxation summit and the Treasurer, Mr Keating, knew that a broadly based taxation system was essential if Australia was to remain internationally competitive. That is why he and his friends in the Labor Party supported a 12½ per cent consumption tax. Despite cosmetic reforms to keep the average taxpayer's head just above the water, the former Labor government could never summon the strength or party unity to bring fairness to the taxation system in their 4,500 days in government. Rather than rolling up their sleeves and doing the hard yards Labor chose to ignore the problem and rack up national debt. In the last five years of the Labor government, Australians watched our national debt snowball $70 billion—$16 billion a year.By their treatment recently of the member for Werriwa, the Labor Party have demonstrated that they still cannot and will not deal with the realities of the tax system because it requires too much discipline and too many tough policy decisions. Having set the thought police onto the member for Werriwa by squeezing him from the front bench, Labor continues to stand by a broken, unfair, incentive destroying wholesale sales tax system.I implore the Labor colleagues of the member for Werriwa—including the member for Perth and the member for Corio—to read his book Civilising Global Capital: New Thinking for the Australian Labor Party. This body of work refers to the narrowness of the current indirect tax base which does not cover services, and refers to the advantages of taxing consumption over income. In the book, he writes:Even without the spread of globalisation the tax system would be in need of constant repair and reform. Notwithstanding the pitfalls of tax reform in the electoral arena, this process now seems unavoidable in Australia. The effectiveness of the taxation regime, both in its adequacy and equity, has become a first order issue for social democracy.The member for Werriwa is right, and the ALP should heed his advice. As shadow treasurer, Gareth Evans was the target of vilification by the Australian electorate because of Labor's policy vacuum. Since accepting the poisoned chalice that is the Labor Party shadow treasury, Simon Crean has demonstrated a propensity for parliamentary tricks rather than for making constructive contributions to the tax reform debate. Sadly, Simon Crean runs the real risk and the great indignity of being as irrelevant as Gareth Evans was as shadow treasurer.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hawker)—Order! The honourable member will refer to other members by their seats.9V5Pyne, Chris, MPMr PYNE—Certainly, Mr Deputy Speaker. The dilemma of the member for Hotham is that, following the experiment of the member for Werriwa, it is quite clear that there is no room for an economic thinker on the front bench of the modern Labor Party.In stark contrast to Labor's policy paralysis, the package of legislation currently before the House represents fundamental economic reform which capitalises on the government's economic achievements to date. An affordable private health system, a tertiary education system accessible to any young Australian, a compassionate and pragmatic social justice program and an economy which gives industry an incentive to grow and export can only be achieved through tax reform. A better Australia needs a better tax system.Perhaps the final word on the necessity for tax reform belongs to the previously men tioned Mr Fischer from the IMF. When asked whether the timing was right for tax reform in Australia, he responded:I don't know what the right time is, but when politicians campaign, say they are going to do something like that which could be unpopular, I think they get a mandate to do it.I implore members of the Labor Party to reach deeply into their souls and recognise the damage they are doing to the Australian economy by not supporting a reformist tax system. I urge the Democrats in the Senate, Senator Brian Harradine and Senator Colston to do likewise—to support what is essential for Australia's future and growth.20:47:001626O'Connor, Gavan, MPMr O'CONNORWU5CorioALP00—I rise to support my colleagues in opposing the A New Tax System (Goods and Services Tax) Bill 1998 and cognate bills, which give effect to the introduction of the government's GST. Listening to what was said by members opposite, one wonders whether we are talking about the same country. When they refer to a `ramshackle taxation system'—a `"We'll all be rooned," said Hanrahan' type taxation system—I wonder whether we are talking about the same country. Is this the Australia that under Labor delivered four years of four per cent growth? Is this the taxation system that the coalition now says has delivered a five per cent growth rate?If it were a ramshackle taxation system, one that was in need of urgent repair, and if there were some direct link—as coalition members portray—between the taxation system and the level of growth, we should have a minus five per cent growth rate, not the five per cent growth rate which the coalition claims. It has taken a long time for you to catch up with Labor, hasn't it? You drove the economy through the floor for 2½ years and, now, when you get a good set of numbers like the ones Labor left you with, you claim that the sun has risen on the Australian economic landscape. We hope you bask in the warmth of the growth rate as you see it at this point in time, because you have just caught up to Labor!DK6HOCKEYMr Hockey—Oh!WU5O'Connor, Gavan, MPMr O'CONNOR—The honourable member sitting at the dispatch box does not like hearing this. Let me go through some of the points which the honourable member for Sturt raised in debate. He talked about the fiscal vandalism left to the coalition by Labor. How would he have coped with the $25 billion deficit left by his Prime Minister to Labor, with an unemployment rate of 10 per cent and an inflation rate of eleven per cent?DK6HOCKEYMr Hockey—Rubbish!WU5O'Connor, Gavan, MPMr O'CONNOR—Do you want me to go on? Do you want me to keep belting you about your economically brainless approach to this sort of situation? The former speaker spoke about the black economy. He must believe in fairies at the bottom of the garden if he really thinks that the introduction of a GST is going to overcome the black economy. As we all know, the experience in countries where this form of taxation has been introduced is that it is a carte blanche for an expansion of the black economy.The honourable member for Sturt and the honourable member sitting at the dispatch box take great pride in turning small businesses in Australia into tax collectors—1.3 million tax collectors compliments of the coalition. They come here saying they are proud of that. I have heard some slippery attempts to define a political mandate, but the one we just heard from the member for Sturt defies imagination.The coalition could not muster a majority of the popular vote on a two-party preferred basis. In the Senate—the house that will shortly review the GST legislation and, if not defeat it, turn it into something that is recognisably decent—60 per cent of its members are opposed to the legislation you are introducing. I think you should have a look at the political and economic realities you are facing when you introduce this. I am intrigued by the argument being advanced by coalition members about the wonderful economy they have presided over—the great inflation rate that Australia now enjoys.I remind you of the fact that the Liberal Party left the Labor Party with an 11 per cent—10 plus one per cent—inflation rate. We got it down to two per cent. That, if your mathematics are in any way acute, is a nine per cent drop in the inflation rate. Yet your Treasurer comes in here when you get infla tion down one per cent and you really think you have done Australia wonders. Where do you lot get off on this? Of course, we have had an increase of Liberal debt in this country. Liberal debt has increased for every year that this coalition has been in power. These are things I know you do not want to hear.When we talk about growth, I really feel sad for you. You are now beating the drum about five per cent. For goodness sake, we used to do that year after year. We left you with an economy that for four years was travelling at four per cent growth, and you could not even match it. You could not even match the record that we left you with over a period of four years. So don't come into this House telling us about economic management. Don't come into this House telling us about getting the inflation rate down. You have got it down one per cent. We got it down nine per cent. We broke the back of it. On growth, we got four years of four per cent growth, and you could not even match that. Go to debt or go to any of these economic indicators and you will see that the economy that we left you with you could not really stuff up, if I could use that terminology.10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Hawker)—I would ask you to choose your words a little more carefully.WU5O'Connor, Gavan, MPMr O'CONNOR—I withdraw that statement. The hoax of this GST legislation lies in its impact on the rural sector. We have members coming into this House day in, day out telling us what great benefit a new tax will be to the rural sector. It really escapes many in the coalition, who obviously come from urban electorates—these are the lawyers and the stockbrokers from Melbourne, Sydney and Brisbane who really run the Liberal Party—that out there in rural Australia many farmers do not earn an income; their businesses run at negative incomes. That is for a variety of reasons. It could be a downturn in commodity prices or it could well be drought—there are many factors that have led to negative incomes for farmers in the rural sector. You are proposing to introduce a taxation package to compensate farmers who do not earn an income and who are now going to have to pay 10 per cent on everything that they consume. I cannot believe the logic of that. On the one hand they earn negative incomes. On the other hand you are saying, `Well, we are going to compensate for the fact that they don't earn income and then we are going to put 10 per cent on everything that they purchase.'We all know that the compensation arrangements in this package are flawed and grossly inadequate. But it is in the macro areas, when you turn the analysis on this GST package, that you see what a devastating impact it is going to have on the rural sector. Most economic commentators will agree with this one simple fact: that the introduction of this GST will see a lifting of the exchange rate. If there is one thing, in the face of the Asian economic downturn and the slump in commodity prices, that has really assisted the rural sector in some way, it has been the devaluation of our currency and the way in which this has enabled our rural exports to compete more on international markets. What the coalition is proposing to do is to jack up that exchange rate through the introduction of a GST and at the same time lift inflation, the enemy of the farm sector. As we all know, inflation will not be 1.9 per cent; it will be about four per cent. This will add billions to farm costs in Australia.Labor broke the back of Liberal inflation at 11 per cent and brought it down to Labor levels of two per cent. We broke the back of it for the rural sector in this country. We put farmers in Australia in a very competitive position. What have we got? A new tax that is going to drive inflation up and drive interest rates up. This is what the coalition do not want to hear. They do not want to hear that they are introducing a policy that is going to drive up inflation and drive up interest rates to farmers so that at the end of the day they are going to be worse off.There is one thing that farmers do not like. They do not like interfering governments that, first, turn their businesses into tax collection agencies and, secondly, make them deal in their farm businesses with extremely complex taxation legislation. Here is what John Hewson, your architect—he is not a Labor man—had to say in the Financial Review of 4 December 1998:On the negative side, I guess that most people will be staggered at the complexity of what has been done.He continued:Even though simplicity is claimed by the Government, it isn't delivered.He also said:It's great for the accountants and lawyers, but the punters hate it.It is great stuff for the Liberal accountants and Liberal lawyers, but the farmers will hate it.Mr Hockey interjecting—WU5O'Connor, Gavan, MPMr O'CONNOR—I say to the Minister for Financial Services and Regulation, who is at the box, that this is not a Labor man; he is one of yours. He was the architect of your great Fightback plan which laid this out for you back in 1993. This is not a Labor man speaking. You are going to impose on the farm sector of this community a new tax, a tax on vital rural commodities that are sold in the marketplace, and there has been no real analysis done on the demand side of rural production about how a new 10 per cent tax is going to affect the products that are produced by farmers. Leaving that aside, here we have John Hewson saying that it is going to be great for the accountants and lawyers but the punters, meaning the farmers, will hate it.I would like to spend a lot more time than I have in this debate exposing the adverse impacts that this will have on the rural sector. The National Farmers Federation in their bulletin Reform documents a lexicon of problems in the tax package that relates to farmers. But I will leave my comments there. A new tax complex will drive up inflation, drive up interest rates and leave farmers worse off than when they started.21:00:001628Prosser, Geoff, MPMr PROSSERRI4ForrestLP10—During the last election, our government outlined a vision for Australia and a plan for the economy. Central to this plan was the need for taxation reform, including the introduction of a broad based GST. We identified the problem with the current tax system, we sought a mandate and the people said yes.Australia has a modern, dynamic economy with an antiquated taxation system. When our taxation system was formed, Australia consumed a smaller percentage of services than we do today. Accordingly, taxing services was not a priority. It was not a significant tax base from which to gain revenue. Since then, our economy has modernised and we now find ourselves consuming fewer goods and proportionately more services—services that are currently untaxed.The math is pretty simple: to maintain a consistent revenue base without taxing services, we need to either increase indirect taxes such as the wholesale sales tax or increase the tax on income. Both these outcomes have occurred. When the wholesale sales tax was introduced in the 1930s, the rate was 2.5 per cent. Now, the general rate is 22 per cent, with multiple rates ranging from 12 per cent to 47 per cent. It has risen by stealth and no mechanism exists to check its rise. In fact, most people would have no idea as to the rates of wholesale sales tax they currently pay on everyday items.These indirect taxes cascade through the production process and penalise Australian exports, reducing our international competitiveness and holding back job growth. At the same time, income tax rates have risen and bracket creep has pushed up the majority of Australians into the top tax brackets. Clearly, we need to address this problem. We need to reform this taxation system to restore the balance between taxation on income and taxation on expenditure. We need to reform the taxation system to make taxes more visible.These bills before the House do just that. They reduce business costs and they deliver lower taxes and fewer taxes. They also provide more incentives to work, save, invest and compete. These bills are part of a package of reforms embarked upon by this government after the disaster of Labor. Tax reform was a tough decision. To take a new taxation system to the people during an election had never been tried before in Australia. We let the Australian public judge us on our achievements rather than on our promises. We let them judge us on the $2.7 billion budget surplus we delivered, the $31 billion of Labor's debt we have repaid, the record low interest rates we have achieved, the low inflation we have delivered and the 350,000 new jobs we have created.Australia now has an economy in good shape, with five per cent growth this year. We have a well-trained, well-educated work force, a good legal system and a culture that lends itself to technology. We now need to ensure that we emerge as leaders in the new millennium rather than followers. To achieve this, we have outlined a plan for taxation reform, and although it is tough—and tough decisions are often unpopular—it is the right decision economically.We have pursued these reforms because we believe governments have a priority to get the economic fundamentals right. This means ensuring that the nation's gains are not consumed by inflation, that the citizens are not burdened by excessive government debt and that the dream of owning a home is not shattered by high interest rates. We believe that having a taxation system so heavily dependent on taxation of income is regressive, and we have outlined a plan to relieve this burden. Under our plan, the top marginal rate paid by 81 per cent of Australian taxpayers will be 30 cents in the dollar or less. But it is more than just relieving the pressures of bracket creep: this package of bills makes businesses and exports more competitive by removing embedded sales taxes.There are many other governments around the world that have failed to take the tough political decisions demanded by reform, and these countries are now paying the price. Look at Japan, for instance; the economy that was once the envy of the world is now in recession. Why? Because they have lacked the political will to reform their economy, they have failed to reform their banking sector and they have failed to free up their labour market. In short, Japan has failed to meet their country's challenge of opening their economy and now they are paying the price.Even Labor have acknowledged the need for tax reform, particularly the movement towards the adoption of a broad based con sumption tax. Back in 1985, Kim Beazley said:There are very few such societies which operate with a taxation system so heavily dependent on income tax as we do and very few which don't have a substantial component of their tax system reliant on broadly based consumption tax.Or there are Paul Keating's comments on the three main advantages of a consumption tax, which he made on 9 June 1985. He said:First, it will allow a more rational indirect tax system than the current anomaly-ridden wholesale sales tax, which has multiple rates, numerous exemptions, and fails to tax the services sector. Second, it will enable us to generate tax revenues to provide for a major reduction in the marginal rates of income tax. No other tax has the same potential for this purpose. Third, it generates tax from those who will continue to evade or avoid income tax . . . Yet Labor opposes tax reform. I would imagine that one would be hard-pressed to find any financial authority in the world that would not welcome the reforms we are proposing. The IMF, one of the world's most influential financial organisations, has put its full weight behind our proposed tax reform, in particular the introduction of a GST. Stanley Fischer, the IMF's First Deputy Managing Director, said that the coalition's tax reforms were:A change toward the efficiency of a tax system: it is a good reform. Economically, it is a fine time to do it. But economically it would have been a fine time to do it five years ago as well. It would be an improvement to the tax system.At present, many businesses have cash tied up in sales tax paid stock. These bills will enable businesses to receive their sales tax paid back because the GST is refundable to business; their stock will effectively be tax free. It is important, because business is all about a return on capital invested. If we can lower the costs to business by removing these taxes on business, it becomes easier to achieve a return on capital invested. If business can be relieved of the burden of having that tax paid up in stock, they can of course reinvest that back into their business, employ more people and run their business more efficiently.These bills remove the tax on doing business and provide Australia with the foundation for a modern, fair taxation system. These measures will improve the balance between the tax on income and expenditure. This way, when people have the opportunity to work longer and harder, to afford a new family home, or to fit out a bedroom for an upcoming new family member, they will be able to do it without being penalised. This tax system restores the incentive to earn and save.Taxation reform is just one part of a broader package of economic reforms put forward by this government. These reforms are vital to Australia's future. They address the challenge of globalisation and prepare Australia for the increasingly competitive business environment in the 21st century.Competition is already profoundly changing the Australian economy by lowering business costs, enhancing competitiveness and providing the conditions for more sustainable economic and employment growth. Governments have an important role in providing the legislative and institutional framework to aid this competition. Governments fulfil this role because they are referees, not players. Central to this environment is the need to increase the competitiveness of Australia's exports. These reforms will slash some $4.5 billion off the cost of our exports, enhancing our competitiveness and boosting our economy.Part of our tax reform package will involve the states removing stamp duties from loan mortgage securities. The government's role in a dynamic economy should be the removal of these barriers to competition and efficiency. In no area is this more important than banking reform. In a speech on reform of the financial system in May, I briefly mentioned the need to implement the remainder of the Wallis report's recommendations, namely, the abolition of the four pillars policy. We now need to examine the four pillars policy to ensure that our safety net does not become a straitjacket in our banking sector.It is important that we allow any possible transition towards a merger between the big four to occur smoothly, to ensure that labour market shifts occur gradually. Many of the reforms we have brought about in government have involved a shift in employment from one sector of the economy to another. Look at waterfront reform: the problem was an over supply of labour, resulting in inefficiencies. The same story applied to rail reform and the Public Service. These sectors possessed an excess of labour that had to be taken from one sector to be deployed in another. The resulting increase in labour efficiencies and lower costs helped create employment in other sectors of the economy.Our government's reforms are aimed at creating a more efficient economy. Tax reform lowers the cost of doing business by removing the embedded and cascading existing sales taxes. If you can lower the costs of doing business, you stimulate demand through lower prices and you can generate new jobs. These are the best jobs governments can help create—jobs arising from increased demand, greater competitiveness and greater efficiencies in the economy.We cannot take a snapshot view of labour market restructuring and quarantine industries from reform because we fear employment dislocations. Employment is constantly evolving. The argument should not be about ensuring there are no job losses; it should be about creating employment through greater efficiencies, and this should be the crux of government reforms.Our government is committed to financial reform. We instigated the financial systems inquiry in 1996 and have since implemented many of the report's recommendations. We have allowed building societies to issue cheques; we have granted banking licences to building societies and insurance companies; we have established the Australian Prudential Regulation Authority, and we have achieved it without too much drama. Now we need to abolish the four pillars policy. If we are confident about our prudential regulation and supervision, the level of competition in the banking sector, and the power of the ACCC, then a merger between the four big banks should not be resisted.Critics argue that any proposed banking merger between the big four would consolidate the power of the largest banks and reduce competition. I disagree. Australia's superannuation savings have reached $359.4 billion and are growing at a faster rate than bank deposits. This injection of funds into the financial services sector has given rise to new mortgage originators that offer enormous competition to the big four, particularly in the area of home loans. Banks have responded to this competition by lowering their margins. It is important to remember that, while bank fees are a relatively new phenomenon in Australia, we are not really paying more for banking services—in some cases quite the opposite. The transparency in bank fees merely signals an end to the cross-subsidy of expensive transactions through higher bank margins—and it is a transparency that should be welcomed because it enables banks to direct customers towards more efficient technologies. Basically, business and banks are partners.Australia must rid itself of the `nanny state' mentality. We seem to enjoy protection from everything—including information. Would we prefer our bank to conceal their fees behind higher margins? I do not think so, because greater transparency enables us to make better choices. Better information provides us with the flexibility and freedom to move to the most competitive financial service provider. And this is something our government has helped create with the proposed scrapping of stamp duties on mortgage securities. This will enhance competition, because it enables borrowers to switch to more competitive banks without having to pay stamp duty on the same loan security.Abolishing the four pillars policy will pave the way for the creation of a world-size bank capable of competing in the international marketplace. This would enable Australia to be recognised in the international marketplace. Our reforms of the tax system, our reforms of business, will make Australian business more competitive, create more jobs and bring about a more dynamic economy.21:13:001631Cox, David, MPMr COX83UKingstonALP00—It is a relatively simple matter to design a new tax system and theorise that it is superior to the existing one. However, achieving real reform is an entirely different matter. Making any significant change to the tax system involves, of necessity, a substantial redistribution of income. In this case, the government has, as its objective, pushing a larger share of the tax burden down onto low and middle income families while at the same time giving massive tax cuts to people on the highest incomes. Because that is so fundamentally unfair, Labor opposes the government's tax package. I have already dealt with the issue of fairness at some length in a previous debate and will not revisit it now. The Howard government have spent more than 18 months designing a tax package they claim is vital to Australia's economic future. Yet what they have produced will offer only small benefits and do great damage.While it was being developed, the Prime Minister and the Treasurer used the prospect of this tax package to deflect serious questions about the government's economic management. Whatever the problem, the government has implied that the GST will fix it: lack of competitiveness of our exports—the GST will fix it; complexity of the existing tax system—the GST will fix it; tax evasion—the GST will fix it; low national savings and the current account deficit—the GST will fix it; unemployment—the GST will fix it; and state-federal financial relations—the GST will fix it.The GST will not fix it. The main benefit claimed is that the GST offers the opportunity to remove the wholesale sales tax which is embedded in our exports and so improve Australia's international competitiveness. I was involved in the last GST debate when Fightback was launched in 1991. One of my memories is the exaggerated claim of cascading wholesale sales taxes adding billions of dollars to the cost of Australia's export industries. But when Treasury did the modelling using PRISMOD—the same model they are using now—they found that the wholesale sales tax embedded in Australian exports totalled only $800 million.Reducing the cost of Australian exports is a worthwhile objective, but on analysis of the costs and benefits of this tax package I think you would look to other remedies. The government was, until last Wednesday, very silent on the costs to business of complying with the GST. They will be substantial. The number of taxing points for the current wholesale sales tax is around 75,000, and the government now admits that will increase to 1.4 million with the GST.The government admits in its regulation impact statement that the total gross cost to business of complying with the GST will be $1.9 billion a year. In itself, that is a compelling reason to reject the GST. That is based on an annual average compliance cost of $1,195 per firm, which is somewhat less than implied by the estimates put out by various peak accounting bodies. However, the Treasury argues that, after the removal of other taxes such as wholesale sales tax, state taxes and cash flow benefits from the remission of GST and amounts recouped by business through tax deductions, the net cost will be only $130 per firm. That, they argue, reduces the total burden to $210 million.The real comparison is not the dubious estimates for reduction in compliance costs resulting from the elimination of a number of state taxes, because the burden of complying with them is trivial on all but a very small number of businesses; the real comparison is the costs of compliance of the GST versus the wholesale sales tax. That comparison, if you uncritically accept the figures contained in the government's regulatory impact statement, is: GST, $1.91 billion per year; wholesale sales tax, only $830 million.If I am interpreting the comparison table accurately, the government is arguing that $420 million of the gross compliance costs for the GST are tax deductible, so the compliance cost of the GST to business is that much less. The comparison then is $1.49 billion for the GST and $830 million for wholesale sales tax. That is a $660 million increase in compliance costs to be borne by Australian businesses as a result of the GST. Irrespective of whether a significant part of the compliance costs for the GST is borne by taxpayers through a tax deduction, the fact remains that the GST implies a $1.9 billion administrative burden on the Australian economy.Then there are the Australian Taxation Office's costs to administer the GST. According to the government's regulation impact statement, these will total about $1.3 billion over the four financial years to 2002-03 when the ongoing cost is expected to be over $290 million. That means the total administrative burden associated with the GST—on the government's own figures—will exceed $2.2 billion a year. Prime Minister Howard was right on 12 March 1981 when, as Treasurer, he told the House:A multi-stage VAT was rejected fairly quickly because it would have imposed an enormous paper work burden on both taxpayers and collecting authorities.Now he has changed his mind and wants to put a $2.2 billion deadweight on the Australian economy. That will far outweigh any modest benefits to our international competitiveness as a result of removing the wholesale sales tax embedded in exports.When the government introduced 16 bills to implement the tax package the pretence that the GST was simple and would not produce anomalies was finally shattered. Already anomalies are appearing in areas as diverse as the GST liability on marriage services, medicines and private tuition for school children. That is the inevitable price of exemptions. Inevitably, the burdens of paperwork rulings and judgments will grow with the GST as they will with any other part of the tax system.The tax office has no choice but to try and protect the revenue base that the parliament gives it. The GST will be no different from any other tax. It will be constantly under attack from those with access to the expertise and resources to try and avoid it. On 4 December this year in the Financial Review, John Hewson condemned the government's failure to achieve its own simplification objective. He said:The New Tax System for a new century has been treated as an adjunct to the existing enormous, inefficient body of tax legislation, rather than what the punter might have expected as a simplified tax act. It's great for accountants and lawyers, but the punters hate it.I would not agree with Hewson's ideas about what is good tax policy now any more than I did in 1991, but he has certainly belled the cat in that this tax package has failed the simplification objective.That a GST would end tax evasion is the most spurious claim made by this govern ment. The argument that evasion will be reduced is based on the assumption that the unscrupulous will be obsessed by the opportunity to claim a GST rebate on their inputs. That the unscrupulous will be moved to behave in this way is unlikely given that, unless their activities are inherently unprofitable, paying the GST will cost them more than the rebate they will receive on their inputs. The Prime Minister, Mr Howard, put it clearly himself in this place on 25 February 1981 when, as Treasurer, he said:A value added tax is applied widely in Europe but is very cumbersome and costly and may not be as self-policing as many protagonists argue. In reality, a value added tax was never a serious option before the Government.As overseas experience demonstrates, the evasion of a GST becomes a national sport. There is a double incentive to evade GST, and that is the opportunity at the same time to also evade income tax. The government is buying support for its tax package with large tax cuts for high income earners and in so doing proposes to substantially loosen fiscal policy.The surplus that the Prime Minister said was so important in his first two budgets that he had to cut funding for public hospitals, pensioner dental care, state schools and higher education is now being squandered to pay for tax cuts to the affluent. That translates into lower national savings, more pressure on the current account deficit and consequently a reduced capacity to sustain employment growth. The financial markets have so far been prepared to tolerate this fiscal loosening. As one senior market economist put to me last week, they see it as a down payment on getting the kind of tax system that the financial institutions want. What he did not say was that, if that fiscal loosening helps make an already precarious current account deficit unstable, tolerance today will not moderate a sell down of our dollar tomorrow.In terms of international experience, the expectations for revenue generated from a GST have often been overstated because of two factors—evasion and the tendency for consumers to switch their spending to exempt goods. The tax package throws light on the lack of priority this government places on employment. If payroll tax was ever an issue for this government in terms of its detrimental effect on employment, that has been given a lower priority than wiping out other state taxes like FID, BAD and stamp duty which have far smaller implications for jobs growth. Of course to fix things like payroll tax would have required a much higher GST than the Prime Minister was prepared to contemplate.Since a GST is a tax on added value and most added value is the product of labour, this country will, with the GST, now have two taxes on jobs. No wonder John Hewson feels that the Howard proposals are not up to the mark that his Fightback package set in 1991. He had proposed the abolition of payroll tax but that required a 15 per cent GST.The tax package takes state-federal financial relations in the wrong direction. The states have frequently said they are concerned about vertical fiscal imbalance. I believe it is more the case that they have latched onto this as a convenient argument to claim a right to access a Commonwealth revenue stream which provides real growth. In the past their objective has been a fixed share of income tax revenues. Now the Prime Minister is handing them the money raised from the GST in exchange for their financial assistance grants. He is also handing them the keys to increased GST rates. The states have been offered a weak transition arrangement stating only that the Commonwealth has no intention of decreasing specific purpose payments. In reality that will be the next phase in this transformation of state-federal financial relations.21:25:001634Charles, Bob, MPMr CHARLESOT4LaTrobeLP10—I am delighted to talk tonight on the government's tax reform package. May I say to the House assembled that these are measures that I have supported for a very long time. In 1993, when we tried to take a tax reform package, including a broad based consumption tax—a GST—to the electorate. the electors of La Trobe said yes. In fact, my primary vote increased; so did my absolute majority increase after distribution of preferences. That was in 1993 when the Labor Party took an unfair, untruthful scare campaign to the electorate, and they did not like it much in my patch, I can tell you. But the Labor Party dishonestly stayed in government in 1993 and we wore—the Australian public wore, my electors wore—the lies, the deceits and the cheating of Paul Keating's l-a-w tax cuts that we never got. We never got the lower tax scales. So let us just continue to bleed the public and all of us pay higher and higher marginal rates on the incomes that we earn, taking away discretional spending from us.In 1998, once again I took tax reform to the electors in my electorate. I gave it to them honestly and told them the program that the government had set out and which it wanted to put in place. They said, `Yes please, we'll have that.' They said, `We'd like you to come here and argue for it.' They did not tell the Labor Party to come in and obstruct. They did not tell the Labor Party, `We're going to vote against everything you want to do.' They said, `We want tax reform.' I will tell you some of the reasons why my people support it.Before the election, I went to see 700 small businesses in the electorate of La Trobe. I knocked on 700 doors and gave them information about what the government was ultimately going to take to an election and what the government was proposing for the Australian public. I have to say to you honestly that out of those 700, two individuals in two shops said, `I hope you lose.' The majority said, `Thank you very much for the information. We are hungry for information. We want to know what the government plans to do to fix up the tax mess that we have.'Of those who wanted to talk, the majority had a simple, single clear message. They said, `Bob, the tax system is broke. We've got to fix it. I may not like everything you are planning to do, but please get on with it.' That is what we are debating tonight and will be debating again tomorrow—getting on with what the government took to the people and was elected to implement. All this talk of the Senate obstructing and the Labor Party voting against it is all a heck of a lot of nonsense. We went to the people and the people decided. Our wholesale sales tax is so outdated and so antiquated that all of us know that it cannot survive into the next century, regardless of the Botswanas and Swazilands and all that emotional stuff. The fact is that our tax base on consumption is shrinking. That is because we have a 1930s style tax on consumption.I think it was in 1936 that the wholesale sales tax was introduced at two per cent. It was to raise some funds. It has now got to the ridiculous point where there are about seven different rates of up to 45 per cent, depending on the goods supplied. Do you know that if you go into a shop to buy a laptop computer the proprietor cannot tell you what the wholesale sales tax rate is or how many dollars it will be until you tell him what programs you want loaded into the computer? That is a fact. Some software programs are free and some are at a very low percentage. It depends on the value of software that you have loaded into your computer as to how much wholesale sales tax you will pay and the overall rate that you will pay.I have never understood why the Labor Party wanted to tax toothpaste but not toothbrushes—you buy the toothbrush and it is tax free, but if you buy the toothpaste you pay 22 per cent. Likewise, I never understood the logic behind caviar being tax free but champagne to go with it being taxed. It did not seem very logical to me. The whole basis of the system was that some things were luxury items and other things were not. As it has turned out, things such as orange juice and most of the things that we buy in a supermarket, except for fresh fruit, vegetables, plain milk and meat, are in one way or another taxed—and some of them at fairly high rates. The base is far too small to allow us to have reasonable income tax rates. The wholesale sales tax discriminates between various items of goods and leaves services untaxed—discriminating in favour of services, hurting the manufacturing industry and hurting exports.Because the wholesale sales tax feeds into the cost of production—and there is no way to isolate many of the items that are taxed from your general business expenses—those costs get fed into your business costs and wind up in the costs of products that we try to export to other countries. Treasury has estimated that there is about $4.5 billion worth of benefit to business by being able to shift from a wholesale sales tax system to a broad based consumption tax, which will effectively exempt exports. It will zero rate exports. It will make them GST free, and that is good for business. If it is good for business, it is good for jobs, it is good for the Australian economy and it is very good for Australian people. We want more people in more jobs, expanding the tax base, paying a lower rate of tax and being able to exercise their own discretion with the use of their income for themselves and for their families.Many times in this place I have heard the Australian Labor Party talk about the GST being an unfair tax. What is unfair about it? Almost every nation on the earth—in any decent sized economy—including almost all of Asia, has a broad based consumption tax regime. Why? Because it is fair and because people can make decisions for themselves. If people have disposable income, they can decide whether or not they will pay tax, rather than everyone being taxed at various and discriminatory rates depending on what level of theoretical income one has. There are varying rates between individuals, between partnerships, between companies and between trusts depending on the legal identity of a taxpaying individual or institution.I maintain that a GST is fair. It has a broad base and it will help give us revenue to run this country and to pay for the services that we need—for the hospitals, for the schools, for the roads, for the transport, for all the government services that we will need into the next century and for more aged care for Australians that we as a society aid. The uniform rate makes it easy. As I explained to my businesses, it is simple for small business. One simply says, `My expenses for the last three months were X dollars. If I divide that by 11, that tells me how much tax I paid on everything I bought and all the services that my company consumed. Then I take my total sales for that same three months and I divide that by 11, which tells me what my total sales were. It tells me how much GST I collected on my total sales. I then subtract the first figure from the second figure and send the government the difference. If I built for stock during that period, and if I were a farmer and all I grow is wheat and I get only one cheque a year, then three times a year I will get a rebate from the government for the tax that I paid on my inputs. Once a year I will pay the difference between what I spent in tax and what I collected on the government's behalf.'User choice is important. If we allow individuals to decide whether or not they spend, then they decide whether they pay tax. If they decide not to pay tax by not spending, then they become savers. Is there anyone in this House or anyone in the gallery who wants to tell me today that we do not need to do something to improve Australia's propensity to save—or lack thereof? If so, they would be wrong—we need to do more to encourage Australians to save. We have become a consumption society and we need to increase our savings rate if we want to help address our debt problems with the rest of the world. If we want to be able to finance our own businesses and our own industries, we need to increase our savings. Reducing income tax rates, scrapping 10 taxes altogether, providing more than adequate compensation for those in society who might temporarily be disadvantaged by the shift in consumption tax from goods to goods and services and increasing family assistance are all positive issues. Consolidated and simplified business reporting and repayments will help business and give us more jobs. I support the package of bills.21:37:001636Bevis, Arch, MPMr BEVISET4BrisbaneALP00—We have 16 tax bills before us, about 20 hours for debate and a lot of members who want to speak but who are not on the speaking list. Those of us who are on the list have had their time confined. This is an unfortunate set of circumstances for what is undoubtedly one of the most important packages of legislation that this parliament will deal with in the life of the 39th Parliament.The government has adopted the tactic not just of arguing the issue—which I will come to in a minute—but of claiming a mandate for this legislation. The Treasurer, both in the parliament and outside it, has said, `Hold us to our promise. We said we were going to do this. Keep us to our word.' The Treasurer and other members of the government, including the Prime Minister, regularly refer to their mandate to push this matter through. They rail at the suggestion that members in this House should have more than 20 hours to talk about 16 separate bills or at the suggestion that the Senate might want to have a closer look at it and come up with a different view from that which the Liberal Party caucus room wants them to have.I want to say something at the outset about this `mandate' approach to politics. The Prime Minister and, for that matter, the Leader of the House are quite clearly on the record in making their views known about a mandate. On 15 September 1987, Hansard records John Howard, the present Prime Minister, as saying:The mandate theory of politics from the point of view of proper analysis has always been absolutely phoney.At that stage the question before the parliament was the identity card, which the then Labor government was seeking to introduce. He went on:We are saying to the Government: put aside all this phoney nonsense about mandates. If the Government really believes, as the Prime Minister (Mr Hawke) keeps telling us, that the great majority of the Australian people want an identity card, if it really believes that it is in the interests of the Australian public to have an ID card and if it really believes that it will collect $1,000m of evaded tax by introducing an ID card, why does it not have a referendum?Why do we not go to the Australian public and have a clear, unvarnished vote?The simple fact of life is that the Prime Minister in 1987 had one view about the role of the parliament when in opposition. He clearly has a different view of the role of the parliament now he is in government. But he did make an observation which I am sure members on this side of the House would now endorse with some fervour. In 1984, when dealing with a tax bill, he said:This Government has no mandate from the Australian people or anybody else to enact unjust taxation legislation.He was right, I guess, but it is a view that he does not want to be reminded of now. Just for completeness, I should add the comments of the now Leader of the House, Mr Peter Reith, on the powers of the Senate. In 1985, he said:When the founding fathers established the terms of both Houses they did so on the basis of a mandate at different points in time for both chambers.He then went on to laud the split term system. In 1988, he said:It is a system designed to discourage hasty decisions. This is a fundamental aspect of our system, and it is a sensible system. It has worked well.From the start, we should dismiss the debate about whether the government should have its way on this simply because it claims to have a mandate. If there is such a thing as a mandate, it applies to each of us who stood for office, depending on the success we had in our constituencies, based on the policies and platforms we took to our constituents. It certainly does not rest with a government that was elected on the popular vote of well under half the population—one of the smallest popular votes of any government in the history of this parliament. The other thing which has mystified me about the mandate theory is that the Prime Minister is keen to claim a mandate—as have many government speakers in this debate—by referring to the fact that they took this issue to the people and that the people knew what they were voting for and returned them to government; therefore, they should be allowed to exercise the will of the people as determined by the 1998 election. They might like to think that through.If they are so keen to let the will of the people prevail—as evidenced in the October 1998 election—then they should wait for the senators who were elected in October to take up their seats. The government are not doing that; they want to rush this through before those senators get here. Government members in the House of Representatives are claiming that the 1998 election is a fair assessment of the popular view; but they sure as hell do not want the senators who were elected to be able to take up their positions in the Senate. So the mandate argument that has been advanced in this debate has been totally misleading—deliberately so—certainly by the Prime Minister and the Treasurer, who are clearly on the record as having held different views in the past.This goods and services tax is, beyond any doubt, a socially unjust and unfair tax which places the burden most heavily on low and middle income families, especially those on fixed income. This fact is beyond dispute. The government acknowledges this hardship by saying, `We will put in place compensation for them.' There is no denial that this is a harsh and unfair tax, that it will hurt many people on low and middle incomes, and that it will hurt all the people on fixed incomes; that much is conceded. The government then says, `We can fix that for you. Trust me, I am from the government. I am going to give you some money this year. Don't worry: for the rest of your life, you and all those who follow in your footsteps will be protected by me, because I am from the government and we want to look after you.' The fact that the GST will continue to apply in the future is beyond doubt. Whether those compensation packages are going to apply in the future is very much in doubt.It would be very easy for me to go well over my time speaking about the social inequities associated with this tax. I want to talk about some other matters because I think that matter has been widely canvassed in other speeches. Before doing so, I want to quickly mention the impact the GST will have on services.People on low incomes and ordinary families face a very heavy impost from this GST on essential services which are currently without any direct component of tax. You can talk about the fact that there is fuel excise or some sales tax on a truck, but if we are talking about what percentage of the final good is subject to tax, things such as phones, trains, electricity, gas, entertainment, taking the kids to the football and going to the picture show are all basically without tax now. All the things that families do as a matter of course, that people do in order to live, will now be subject to an increase in cost.There are but three things you can do with money: you can spend it, you can save it or you can invest it. The great bulk of my constituents spend just about all of it. They spend just about all of it not on luxury items but on basic necessities of life—to put a roof over their head; to put food on the table; to clothe themselves and their family; and to try to give their children, through education and other means, a better opportunity in life. At the moment the great bulk of that expenditure is not subject to any form of direct tax through the system of wholesale sales tax or any other. It is not subject to those imposts—but it will be subject to a GST.Those people at the top end of town—those who, each month or quarter or week when they get their dividends or salary, are able to sit down and decide how much they want to plan for their investments, how much they want to plan for their savings and what their discretionary income will be—are the winners out of this, as are those industries that are capital intensive. The simple inescapable fact of this tax is that it is socially inequitable.In the few moments remaining, I want to say something about the wholesale sales tax system because it has been widely pilloried, and I am quite happy to stand here and defend the wholesale sales tax system as both efficient and just. At the moment there are some 70,000 collection points for the wholesale sales tax system. The government's solution to those 70,000 collection points is to introduce a point of retail sales tax that will see that figure balloon out to about 1.3 million collection points—and we are told this is a simpler, easier way of generating about the same amount of revenue; that this package is supposed to be roughly revenue neutral. So we take 70,000 collection points, turn them into 1.3 million and regard that as good economic reform.The wholesale sales tax system does have anomalies in it, and there is no doubt about that. We are well versed in the good lines about it, whether about the plain milk that is put on your cornflakes in the morning not having a wholesale sales tax imposed on it but that it is put on the flavoured milk you buy; with biscuits, argument about what sort they are as to whether they are food or confectionary; put the litmus paper into the yogurt. All these things are good banter.But what is the government's solution to those sorts of anomalies? The government's solution is to say, `Well, okay, strawberry flavoured milk is taxed but plain milk is not, so what we'll do is tax the plain milk for you; we'll put a tax on the milk that you put on your cornflakes as well as on the chocolate or strawberry flavoured milk you buy for drinking purposes from the corner shop.' The government has actually said, `There's a range of anomalies here, and our solution to it is that we'll tax the lot.' The member for La Trobe, who was here, said that he could never understand why you taxed toothpaste but not toothbrushes. His answer: tax the toothbrush as well. That is an incredibly regressive response and, having been continually raised throughout this debate by members of the government, it is one which has amazed me.The wholesale sales tax system has some very important inherent values. One I have already mentioned, which is the efficiency of collection points. But the other is that it actually allows society to discriminate, to positively discriminate, for good social policy reasons. For example, you can consciously decide that you will not directly tax bread, milk, electricity, bus fares and a whole host of other things that people need as basic necessities of life. I regard the fact that that occurs as a strength of the system. I regard it as a strength of the system that recycled paper is taxed at a lower rate than virgin paper. That is, you can discriminate for socially desirable things, such as environmentally friendly products—and why shouldn't we?These are things that governments are elected to do. It is the difference between having a government that sees itself as a group of bookkeepers or a government that sees itself as having some sort of social and moral obligation to the people of the nation. If what we are about is simply trying to adopt a means of generating a fixed amount of money in the most efficient collection method, then let's not bother with elections in this country; let's forget about elections altogether. Let's just go to tender and get a large accountancy firm to run the books for us. If you want to extract out of it the social-moral judgements—which is what the GST does—then go ahead and do that and forget about having a parliament. Get KPMG in here and they will frame the budget for us.The reason we have a parliament, the reason we have governments, is to make those sorts of decisions—and a wholesale sales tax system allows you to do that. Imperfect as it is, it has those benefits.Rather than sort the problems out in the wholesale sales tax system, the Liberal Party have opted for a tax which is regressive and which is harmful to the great bulk of Australians. This is a tax which has not been supported by ordinary Australians—and evidence of that was the vote at the last election—but it is a tax that has been supported by the top end of town. I thought it interesting the comment made earlier this year by Stan Wallis, President of the Business Council of Australia. He said:. . . the GST holds out the prospect of significant reductions in the indirect tax burden currently borne by business.Well, bully for them. I do not think the Business Council of Australia, the organisation that represents the top 100 companies in this land, was out there paying money to argue that we should have a goods and services tax.Mr Hockey interjecting—ET4Bevis, Arch, MPMr BEVIS—The Business Council was not out there arguing for this goods and services tax because it wants its members to pay more. It was not saying to the people of Australia, `Well, big business thinks we're not paying enough, we're not pulling our weight in this country; we want a GST because we think we should pay more to support the nation.' Stan Wallis let the cat out of the bag when he said, `This offers the opportunity for us to pay less, fellas.' `Like, we're paying too much already, we want to pay less, and the GST is the way through it,' says the big end of town. And this government has supported it; those opposite have in fact been the puppets of that debate.One of the other furphies in this has been to say that the black economy is going to be reduced; we will catch the cheats. I have had people say to me, `Well, at least Kerry Packer will have to pay the GST when he goes and he gets his Weeties or whatever,' and I suppose he will. But, if you want to talk seriously about the black economy, you need look no further than the place that is held out by this government as the model for what we are now embarking upon—the European Union.Only this year the European Union made public a report it commissioned into the state of its tax raising mechanisms. It had an assessment of the black economy in the European Union in a report this year that said that the black economy in Europe is now 16 per cent—16 per cent of the GDP in Europe is now black economy—and growing. The reason behind it is the GST. The GST itself promotes the black economy. That is the experience in Europe, that is the experience in New Zealand, and the European Union has been able to identify that this year in a formal report.This is a bad law. My final comment relates to national savings, which was mentioned by the member for La Trobe; I am sorry that he is not here. I want to make one point about it because it is very important: the government is making a terrible mess of superannuation, which was one of the real answers to national savings. Now you are making a real mess of it in the tax system. This is what Ted Evans, the Secretary to the Treasury, said:Every economic text that I know of will tell you in principle that shifting the tax burden towards further reliance on indirect taxes will significantly aid national savings. . . So far, so good for you guys. You say, `Right, we're on the right track.' But listen to this. He then went on to say:. . . you won't find that convincingly demonstrated in studies of international tax reform experience.What he said was, `Yes, the pointy heads will tell you that it works and that it improves savings, but do you know what? Look around the world and you will see that it does not.' This is a bad tax and it should be defeated.Honourable members interjecting—10000DEPUTY SPEAKERMadam DEPUTY SPEAKER (Hon. J.A. Crosio)—I call the honourable member for Parramatta. I advise both the Minister for Financial Services and Regulation and the member for Banks, who are at the table, that if they wish to participate in the debate they can do so. The member for Parramatta has the call.21:53:001640Cameron, Ross, MPMr ROSS CAMERON3K6ParramattaLP10—What I propose to do over the next 10 minutes is to return to first principles and seek to explain, in simple language that any of my constituents in Parramatta could understand, why we need a new tax system. I found that fair-minded Australians, when faced with the facts, minus the political jargon, the rhetoric, are very sympathetic and responsive to the need for a major reform of our tax system.If we go back to first principles, the question we must ask is: what is the purpose of a tax system? What is the job that it is called upon to discharge? The success or failure of a tax system must be gauged against the ability of the system to discharge the job that it has been called upon to do. I would suggest three things that a tax system must do in order to be regarded as successful. The first is that it has got to be capable of generating the revenue required to fund the legitimate provision of public goods and services over the long run. That long run view is particularly important. It is not enough if it can do the job today or if it could do the job 10 years ago. We have to ask ourselves: will it be able to do the job in a decade or a generation from today?The second thing it must do is achieve its first objective, just stated, with the minimum impact on the positive behaviours we need to encourage, such as the desire to work, save and invest, while at the same time it ought to discourage those behaviours which, from a policy standpoint, we need as a nation to discourage. I would suggest that principal among those is the desire to spend and consume, particularly in view of Australia's great deficit of national savings, both public and private. I will return to that point a little later.The third thing it must do is that it must be adapted to the actual circumstances of the community which it serves, particularly the patterns of economic activity and the demographic changes which will determine what services people will require from government both today and over the decades ahead.That is what the tax system has got to do if we are going to regard it as successful. That is what it has got to do if we are going to stand up in this place and either defend it or provide a critique of it. It is against that background that I want to outline over the next few minutes what is wrong with the current tax system, why it needs to be reformed and why the new system will achieve the three objectives I have just outlined.The first point to understand is that every tax has an influence on people's behaviour. Tax is not somehow neutral. Every time you introduce a tax it changes the way people behave. For example, let us take smoking. If you wish to discourage people from smoking, you raise the tax on cigarettes and there is a point at which people's demand for cigarettes is reduced because they recognise they have to pay so much to buy a packet. In the same way, if you look at the consumption of petrol, the fact that we tax petrol highly discourages people from driving and that may have positive environmental consequences. By the same token, if you leave a good, service or activity untaxed, it acts as a licence to participate more fully in that good, service or activity.The difficulty with our current system is that it does two things: it taxes primarily goods and it taxes work or income. It leaves untaxed consumption. The question is: why is that a problem? I come to the second point, which is that the tax system must be adapted to the actual circumstances in which we find ourselves as a nation. So people are entitled to ask: what are those circumstances that are driving the desire for change in this government which is looking forward to the next generation?Those circumstances are, firstly, a rapid demographic change. That demographic change is influenced by two key factors: the birth rate and life expectancy. In Australia today, we are following a pattern which is consistent with developed nations around the world, that is, we are having fewer and fewer children. At the turn of the century, the average Australian family was producing six children. Today, the average Australian family is made up of mum, dad and 1.8 children. That ratio is declining; by 2010, the figure will be 1.7. So we have fewer and fewer children and, from a clinical standpoint, that means that over the long run we have fewer and fewer taxpayers. We have fewer and fewer people who are generating the revenue which is required to resource the provision of public services.At the same time, we are living much longer. At the beginning of this century, the average Australian was living to the age of 60; today, the average Australian is living to the age of 80. Actuaries and geneticists tell us that that figure will continue to rise and that the actual life expectancy of an Australian will rise by another 10 to 15 years over the course of the next century.Mr Deputy Speaker, it may surprise you to know that one woman in three born in Australia today will live to the age of 100. By the end of the next century, it will be fairly routine for long livers to live to the age of 110. The average life expectancy will be over 90. What it will mean, in terms of the consumption of that tax dollar, is that we will spend 20 years in youth, adolescence and education; from 20 to 55—35 years—in the work force generating tax revenue; and then we can look forward to 35 years of retirement. So what that means is 35 years in the work force generating tax dollars and 55 years consuming the tax dollar. That tells us that we have a huge challenge in terms of how we fund retirement income in this country over the next century. That is the challenge of the tax system. That is why national savings is so critical, why we have to lift the rate of national savings. We know, beyond a shadow of a doubt, that the demand on tax dollars will continue to rise.So the question is: how does the current system respond to those challenges? The non-demographic factor I want to refer to is the rapid growth in the size of services as a proportion of the total economy. Until the middle of this century, we were an economy that focused primarily on the production and exchange of goods. The wholesale sales tax system is premised on an economy which is focused around the production and sale of goods. But what we have seen is the rapid increase in the provision and purchase of services. That sector is growing at a rapid rate and at the moment it is left entirely untaxed. So when we revisit the question of how we provide this much needed revenue to fund, in particular, retirement income but also the health costs of an ageing population, we recognise the fact that there is this vast area of the Australian economy which exists at the moment in an entirely untaxed state.The other reason why this is important is that as we seek to lift national savings, what we have to do is change the signals in the structure of the economy which affect people's behaviour. That means we have to change taxes. For example, there is a point at which, if you continue to tax income at ever increasing levels, up to, say, 50c in the dollar, you wind up discouraging people from working. Every member of this House will have had constituents come to them and say, `Why should I work Thursday nights or Saturdays? Why should I work overtime? Why should I put in the extra effort if I know that I have to give 50c in every dollar to Peter Costello?' That is a powerful disincentive for Australians to earn income. The very thing we have to be encouraging Australians to do is to earn income and to save, which is the one thing that our current system discourages them from doing. So we have got to change the signals.What our new tax system will do is reduce the level of tax on income, thereby providing incentive to work. By then introducing a 10 per cent across-the-board tax on the consumption of services, we also provide a disincentive for people to spend and to consume. Those two things operating side by side will send a powerful message to the Australian people which is consistent with the needs and the challenges that we know we will have over the next century.The previous speaker got up and ridiculed this system on the basis that it lacked compassion, that it was really the product of KPMG. I support this new tax system on compassion ate, humanitarian grounds, because my argument is—and I think the vast bulk of fair-minded Australians will understand it—if we leave this system unchanged, the only available alternative is to consistently raise the level of income tax. If we do that, we will kill the goose which lays the golden egg; we will bring the Australian economy to a grinding halt. If we have locked in the current entitlement to a pension at 25 per cent of average weekly male earnings and we just project out the demographic changes which we know are going to take place over the next century, we would have to raise personal income tax rates to over 60 per cent on average weekly earnings by the middle of next century in order to fund retirement income.That is simply intolerable. The people who will hurt the most if we leave this system unchanged are the poor. The people who will hurt the most are those currently on fixed incomes in retirement because the funds will simply not be there to meet their requirements over the course of the next generation and the next century. So I am appealing to all of those who are fair minded, I am appealing to those who are concerned about this country's future, I am appealing to those who recognise the actual circumstances we face, rather than the ongoing stream of rhetoric which is pouring forth from the opposition. I am urging all honourable members to get behind what is a far-reaching, compassionate and humanitarian reform which provides a foundation for this country to thrive into the next century.Distinguished Visitors16421642Hockey, Joe, MPMr HOCKEYDK6North SydneyLPFinancial Services and Regulation10—On indulgence, Mr Deputy Speaker, I would like to welcome to the chamber Bob and Phyl Ellis, who have come from Crescent Head in Cowper. Bob is 84, Phyl is 75 and they were married last Saturday. I would like to welcome them to the House of Representatives. Welcome to the parliament and congratulations. They are here in Canberra on their honeymoon, so welcome aboard.Bills1643r703Billsr658Billsr667Billsr666Billsr702Billsr699Billsr698Billsr657Billsr697Billsr665Billsr701Billsr663Billsr659Billsr700Billsr664BillsBillsBillsBillsBillsBillsBillsBillsBillsBillsBillsBillsBillsBillsBills1643r6601643Debate resumed.22:06:001643Hall, Jill, MPMs HALL83NShortlandALP00—The member for Parramatta lives in a very different world from the world I live in. He lives in an economy; I live in a community. I live in a community with real people that have real problems and have said that, no, they do not want a GST. The government introduced A New Tax System (Goods and Services Tax) Bill 1998 and associated bills into this House last week, a proposal that will radically change our tax system—or, as the Treasurer put it, the legislation creates a new tax system. It is a tax system that will make second-hand cars taxable for the first time and make new cars cheaper. It is a tax system that taxes sheltered workshops and children's sport. It is a tax system that taxes ordinary Australians disproportionately. And this new tax system is to be rushed through the House with indecent haste and with only 20 hours of debate.The question I would like to ask is: why? Is it because the legislation will not stand up to scrutiny? If the government is so convinced that a GST will benefit Australians, then it should be committed to maximum consultation and extensive debate. The government should welcome debate, because if the GST is going to be so effective and beneficial to everyone in Australia it would be proven in debate. Obviously the government knows that debate will only weaken the standing of the GST and show just how inequitable it is. There is no group, no person, no section of the community and no business that will not feel the effect of a GST.One of the best descriptions I have read of the GST was sent to me by an accountant, who defined the GST as, `A tax that is payable by all, collected by small business and redistributed to the rich.' It is a tax that is paid at the same level by all people. No thought is given to a person's ability to pay. It does not matter whether you earn $100,000 a year or $10,000 a year, you will still have to pay the GST on your milk, fruit, vegetables, meat and electricity.Members on the other side of the House may think that it is fair to impose this tax on the necessities of life, increasing their prices whilst at the same time reducing the price of luxury goods, but I do not. This is a harsh tax that falls disproportionately on those people who can least afford to pay it. It hurts low and middle income households, especially those with children. The compensation package has no compensation for dependent children over the age of 17 years. At the same time, the Howard government's changes to the youth allowance have forced young people back into the care of their parents. So they just keep on taking and taking.The package is based on all the wrong assumptions. It assumes that all people have the same spending patterns and the same ability to maintain those spending patterns. The package does not take into account those differences. It is a long established fact that the proportion of household income spent on the basics of life—things like food, housing, electricity and clothing—decreases as the household's income increases. The household that has an income of $100,000 a year, as compared with the household that has an income of $10,000 a year, will spend a substantially lower proportion of its disposable income on fresh food, housing, electricity and clothing. It will not consume the total amount of its income as a lower income family will.For the household earning $10,000 a year the GST is a disaster. It means that these households will have less money to spend and will be penalised because they have less money. If you are wealthy you will be rewarded. But, if you are an average Australian family, a pensioner or a person who is unemployed through no fault of your own, you will be punished and life will be made much harder if a GST is introduced. The GST is a regressive tax. It is a tax which hits the most vulnerable in the community hardest. It is an unfair tax; a tax that must be opposed.This government has argued that the tax system in Australia is outdated and unworkable. It is really hard to support this conten tion when Australia currently has a five per cent growth rate in gross domestic product, low inflation and low interest rates. We have a tax system that is fair, a tax system that works. It is a tax system that has contributed to Australia's continued economic growth and stability. It is not a tax system that is haemorrhaging or a tax system that is placing a disproportionate burden on average Australian families or on the most vulnerable people in our society.This government has waged an attack on wholesale tax, portraying it as the worst kind of tax and the most unfair tax imaginable. In actual fact, wholesale tax is fairer and easier to administer than a GST. Most importantly, a wholesale tax is paid by a wholesaler, not at the point of retail, as a GST will be. This means that the tax is not paid on the retailer's profit and small businesses are not required to administer the scheme.Currently retailers are not involved in the administration of wholesale tax. It does not impact on the retailers as they do not impose the tax. They do not collect the tax and they do not have dealings with the Australian Taxation Office. It will be a very different situation with the GST. All the complexities of the transitional provisions, the classification anomalies and the need to understand and administer the GST fall on all businesses. The greatest impact is on small businesses—small businesses that those on the other side of the House say they are here to protect. It will increase the accounting and administration costs of all small businesses and they will become the government's tax collectors.By making the GST payable at the point of retail the government is increasing its tax base. The GST will be imposed on the retailer's profit and not on the actual goods that a person purchases. The argument that the GST will decrease the price of some goods currently attracting a wholesale tax is very misleading. Simply removing the wholesale tax from an item does not guarantee that the item will cost less. This is because the retailer's profit is added to the price of the item before the GST is imposed, thereby increasing its price.Therefore, by arguing that a GST will reduce the cost of all goods attracting a wholesale sales tax, the government is misleading Australians. It is not telling the truth. The government has assured us that its 10 per cent GST can be increased only if all the states agree to an increase and that this is enshrined in the legislation. Once again, the government is misleading us. All it takes to change the rate of the GST is an amendment to the legislation.It is interesting to note that, of the 26 countries that had a GST as at May 1998, all but three have increased the rate of their GST. The increases have ranged from 150 per cent in Denmark, which had a rate of 10 per cent—the same rate that Australia is looking at imposing—and that rate has now increased to 25 per cent. France is at the other end of the scale with a three per cent increase in the rate of its GST, increasing from 20 per cent to 20.6 per cent. It appears that the countries that start with the lowest rate of GST have increased their GST by the greatest percentage.This government argues that the GST will stop the black market. How I do not know. Experience in the European Union has shown that the black economy has grown by about 16 per cent of the gross domestic product. Wealthy members of the community do not pay the tax because they can afford to pay cash for their goods and services. In Britain, it has been estimated that the black market is about 10 per cent of GDP. That denies the Treasury of about $A60 billion per year—money that could be spent on schools, hospitals and basic government infrastructure.This is the tax that this government wants to impose on all Australians. It is an unfair tax. It is a tax that you can avoid if you have money. It is a tax that affects middle and low income earners to a much greater extent than the wealthy. The GST is a bad tax and a tax that we do not want in Australia.22:17:001644Lawler, Tony, MPMr LAWLER834ParkesNP10—I rise to speak on the A New Tax System (Goods and Services Tax) Bill 1998 and cognate bills. I am new to this chamber and I have listened to speaker after speaker on this tax legislation. I am amazed that the ALP is whingeing about having only 20 hours to debate this issue. I have listened to the same old tired arguments time after time, which are thrown back and forth by speakers on both sides of the House with the mission in life of speaking for all of their allotted time, regardless of the content or the level of new argument.Pardon me for expecting lively debate, with the opposition throwing up legitimate problems and being quickly and concisely rebutted by members on our side. The arguments going back and forth are the same ones which were thrown up day after day in the election campaign. They are the same questions. How can the Labor Party possibly argue for more than 20 hours of debate when we are going over the same old ground? They say that the black economy will be worse; we say it will be better. They say that the tax taken off fuel will not be passed on; we say it will—and they obviously do not know the cutthroat truckies that I know!Some of the old ground they are not going over is their big challenge to the 1.9 per cent one-off inflation figure which was in the Treasury figures that were mentioned earlier. Over and over they have called for that to be recalculated in different ways. Lo and behold, when the figure was calculated in different ways, it was basically the same—it is largely correct, and so we have not heard much on this ever since. They talk about the GST being an evil hidden tax. It is not hidden at all in the way that wholesale sales tax is hidden. It is clear because it is consistent from one product to another and from one business to another.The tax legislation is all inquired out. No number of new reports or examinations by economists is going to uncover all the intricacies of such wide-ranging reform. It has been on public display for months now, and no group has shot any serious holes in it. In fact, the welfare groups all recognise that tax reform is necessary. It is the only way that we can guarantee that the workers of this country will be able to support our ageing population in years to come. We must encourage savings.It is widely recognised that the Australian economy will not fall over tomorrow if we do not fix the 1930s tax system, but it will fall over soon if we continue to ignore the area of taxation which the current system ignores—that is, the tax on services. The tax on services must not be ignored because that is the tax that is not being paid by the wealthy. The wealthy spend more on services than the financially disadvantaged. It was fine to pick up indirect taxes on goods only when goods were responsible for about 80 per cent of our economic output. It is not fine to continue this practice today when 80 per cent of our output is services. Not only that but, as I said, the rich are the biggest users of services.The Labor Party is very good at picking up small areas in the package and ignoring the parts which offset the disadvantages it points out. It is like walking into a pristine park and condemning the park because there are half-a-dozen pieces of trash lying on the ground. The member for Hotham actually said in the chamber on Monday that Labor supports tax reform. I can only guess that the reform he is talking about is the grabbing of the assets of our elderly via their pre-1985 capital gains tax or that huge revenue raiser—a tax on caviar.The Labor Party says it is worried about small businesses. Small businesses, by and large, welcome tax reform. They can see that they will have to implement changes to their businesses, but they can also see that, by getting rid of provisional tax, they will be much better off and that, by reducing their tax rate to 30 cents in the dollar, they will save huge amounts.It is absolutely crazy to tax when we earn instead of taxing when we spend. In my pharmacy, my team work very hard. They are honest and dedicated. If they are working about a 35-hour week and someone rings in sick and I have to ask them to work an extra day, by and large they do that. But they will work that extra day for the grand sum of about $20 in their pocket. Why? Because they go into the next tax bracket and lose most of it in tax. Is this a sensible tax system, one that discourages people to work harder?I know a gentleman who also was a hard worker. He worked two jobs. He was a butcher by day and a waiter by night. One day he came into my pharmacy with a health care card. I was quite worried and I went out and had a yarn to him. He told me that, after working two jobs for two years, he ran into a bloke who told him he was mad, that he was much better off quitting his second job and getting more family allowance and going on to a health care card. Is this a sensible tax system, one that actually encourages someone not to work to support themselves because someone else will?We have developed a very strange culture that encourages us to blame others for our mistakes and to find someone else to pay for our needs. We need to turn this around, and we have to have reward for our effort. Profit is not a dirty word. We need people to make a profit. We need people to get off their backsides and be rewarded for it. The tax system we have does not do this. It discourages enterprise and rewards mediocrity. This is not the foundation that Australia was built on.Much is made of pharmacy problems. Yes, it is a bit of an imposition, but most of us look at the big picture, and we cannot have the gain without the pain. The member for Jagajaga constantly talks about Panadol for pain. Most disadvantaged people get their pain relief medication on scripts, and scripts are GST free. Others who are not particularly disadvantaged occasionally buy a 24-pack of Panadol. The 10 per cent GST on this pack is about 20c. Calculate that over the year on an ordinary person's spending on Panadol. The member for Jagajaga also says that people use cough and cold medications and Panadol every day. I can tell you, Mr Deputy Speaker, that the only ones who need to Panadol every day are the ones who sit on this side of the chamber and have to listen to the prattlings that go on on that side of the chamber. Sometimes a bit of cough medicine might help us get to sleep at night.We need to change the tax system. We need to remain a vital economy, one that can look after our elderly and our disabled. Let us look at the big picture, the one that admits a 1.9 per cent one-off inflation rate but also sees that 80 per cent of Australians will be paying less than 30 cents in the dollar tax and one that encourages effort and rewards savings. When we have done that, we will be able to look forward to facing the next millennium.Debate (on motion by Mr Melham) adjourned.Adjournment1646Motion (by Mr Hockey) proposed:That the House do now adjourn.164622:25:001646Swan, Wayne, MPMr SWAN2V5LilleyALP00—It is about time the banks got the message that Australians will not cop mergers between the big four banks. Today, yet again, the National Australian Bank is telling the Howard government to do as they are told. Given its close relationship with the government, it must be optimistic of succeeding.What Australians have seen from the banks in recent years is savage increases in fees and charges. The announcement last week of the Commonwealth Bank to slug its customers with another round of increased fees and charges hurts those in our community who can least afford it. This announcement, coupled with the drop in official interest rates, will most certainly spark a new round of fee hikes by the major banks as they seek to bolster their profit margins on the backs of those who can least afford it. The prime targets are Australia's families and senior citizens.The electorate of Lilley, which I represent, has one of the highest proportions of people over 65 in Australia. It is these people, our senior citizens, who stand out as being the biggest losers from the seemingly endless waves of fee increases and bank closures. In my local area, the last 12 months alone has seen closures in the suburbs of Zillmere, Kedron, Stafford, Geebung and Chermside—seven branches in total. The residents of these communities have rallied, petitioned and protested. The banks, however, have chosen not to listen to their loyal customers—people like Bill Vowles from Kedron, Jim Frielich from Zillmere, Helena Owlles and Jo Boquet from Kedron State School and Steve Avient from Zillmere.By any objective analysis, the fee structures of the big banks are targeted at those who are on low incomes, or those who have no choice but to outlay all their money payday to payday. Minimum balance fees hurt struggling families and pensioners month after month, and outrageous over-the-counter transaction fees—up to $6 per withdrawal—directly target the elderly who have difficulty in dealing with high technology ATMs and EFTPOS. Clearly the banks' policies are discriminatory. The banks' principle is the lower your income the higher your fees; the higher the income the lower your fees. The banks have totally lost touch with the needs of the community. It is a matter of balance, and at the moment the banks are way out of wack. The banks have all but lost that sense of community and mutual obligation that pervades a decent and caring society.The banks talk about the importance of customer service and members of the government mindlessly chant the benefits of `red hot competition' and market forces, but the reality is that it all comes to naught unless you are big business or have large amounts of personal wealth. The public believe that being competitive is about bringing charges down, not clubbing customers over the head. The average banking customer is being treated like they don't matter. Perhaps that is good enough for the coalition government, as its action—or rather inaction—over its last term demonstrates. The Prime Minister and Treasurer have allowed the banks absolute freedom to raise billions of dollars in fees and charges by raiding the savings of Australia's families and elderly. They have sat on their hands as the banks close hundreds of branches and put our nation's elderly on the rack, stretching their budgets to the limit under the weight of unfair fees and charges. The government has allowed this to happen though its inaction and absolute belief in the market's ability to find just outcomes for all. This government's blind ideology has failed Australia's elderly and families miserably.If it were concerned about unfair fees and charges, the government would work with the banks, as the last Labor government did, to establish basic banking accounts—accounts with at least one fee—free over-the-counter transaction per week, no minimum balance charges and no account keeping fees. It would also direct the ACCC to formally monitor bank fees and charges and report regularly in consumers' interests. Finally, the government should not hesitate to intervene if the banks continue to act unreasonably. I urge customers who are upset by the actions of their bank not to take out their frustration on the staff. Australia does need a competitive banking industry. It needs an industry which is not highly concentrated, one that is competitive and one that works in the interests of all consumers.Unfortunately, I feel this government does not have the spine to act in the best interests of the wider community, so the community must stand up and tell this government not to allow the NAB to call in its debt and for the government to allow the mergers to proceed. We need a government that is interested in outcomes for people, not in blind ideology. I urge this House to support action to stop the banks from merging and to tell the banks to come into line with community expectations.164722:30:001647Gallus, Christine, MPMrs GALLUSCU4HindmarshLP10—Last night in this place the member for Prospect made a personal attack on me. As part of that personal attack she talked about the 1998 election just past. As the member for Prospect has raised this issue, I will mention what happened in the 1998 election, including the type of campaigning that went on from the Labor team of Tom Koutsantonis, who was the manager of the team, and Steven Georganas, who was the candidate.First of all, let me say that Hindmarsh, the seat I now occupy, was known as the jewel in the crown of the Labor Party. It was a Federation seat, a seat that they believed was theirs by right. It was an extreme upset for the Labor Party when I took Hindmarsh. It has burnt them ever since that I have held onto it. One of the Labor members in my state said to me, `The trouble is, Chris, you've got such a good hold on the seat because you have such a good reputation. Because you look after the people in the electorate so well, we will have a hard time ever getting you out of that seat.'However, it seemed that Mr Georganas and Mr Koutsantonis thought they would at least have a try. The way they tried was to see what they could do in that seat to destroy my reputation.Mr Melham interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—The member for Banks!CU4Gallus, Christine, MPMrs GALLUS—Last night the member for Prospect read a letter from Mr Thomas. It was not the only letter that went through the electorate bagging me. It was one of several letters. Some of them were hard to trace as at least one, I know, came from somebody who was not registered to vote in the electorate. It was hard to identify as the address that was given was a large block of flats. However, the deed was done and the letters were circulated suggesting I had not helped people and was a bad member.I was informed by residents of the Housing Trust homes that within the Housing Trust the Labor Party had seeded people to tell Housing Trust tenants not to vote for me because I would not see them in my office as I was a Liberal and did not look after Housing Trust tenants. As many of the tenants I look after are Housing Trust tenants, this was a falsehood and it was a particularly base thing to say. There was also a letter on euthanasia that went out. I have one that was sent to the electorate of Ms Jeanes. The one that was sent into my electorate by Mr Koutsantonis and Mr Georganas was similar.Mr Melham interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—The member for Banks is not helping the House.CU4Gallus, Christine, MPMrs GALLUS—I will quote from the letter about Ms Jeanes. It said:Your MP, Ms Susan Jeanes, is an active supporter of euthanasia.. . . . . . . . .The Netherlands has had informal euthanasia for 10 years. In a United States Congressional Report published 12 months ago, Dutch cardiologist Dr Richard Fenigsen tells of a Dutch three-year-old who had spina bifida but was otherwise in a "fair general condition." For two days he did not feel well. His parents asked for euthanasia. A nurse was appalled by this and she and her husband offered to adopt the three year old. The offer was refused and the boy was killed with drugs administered by intravenous drip . . . Don't make Kingston—in my letter it is `Don't make Hindmarsh'—a place where an opponent of euthanasia was defeated by a supporter of the lethal jab.. . . . . . . . .PS. How would you feel to wake up the Sunday after the election to find that your vote had elected Ms Susan Jeanes—or in my case Mrs Gallus—as a pro-euthanasia majority in Federal Parliament?Mr Melham interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—The member for Banks!CU4Gallus, Christine, MPMrs GALLUS—The South Australian Voluntary Euthanasia Society followed this up and wrote to Mr Atkinson, a state member, asking him to give the source of the statement. They telephoned, I believe, four times and were finally assured that Mr Atkinson would reply soon. Meanwhile, they faxed a letter to the Netherlands. I will read the reply from the Netherlands, from Robert A. Hall, President of the Paediatric Association of the Netherlands:Dear Mrs Gallnor,Thank you for your fax about the three year old boy, who was supposedly killed as an act of euthanasia. I can assure you that nothing like that happened in the Netherlands.. . . . . . . . .If something, like you mentioned in your letter, would happen in this country, certainly there would be a lot of protest.So not only was it suggested in a letter that I supported the murder of a three-year-old with spina bifida, but information that such an occurrence had happened in the Netherlands appears to be a fabrication. This was only one part of a grubby campaign run by the Labor Party. (Time expired)164822:35:001648Hall, Jill, MPMs HALL83NShortlandALP00—During the debate on the private health incentive scheme, I expressed my concern at the government's failure to reintroduce the Commonwealth Dental Program. This is a program that has helped thousands of Australians. It was a program that achieved its objectives and was cost effective. The pro gram cost a measly $100 million a year, and the government axed it. It axed a program that was effective, a program that worked. It is now committed to paying $200 million to those people who could afford to have private health insurance, ancillary insurance, at the expense of the people that were reliant on the government's Commonwealth Dental Program.So, on the one hand, we have a government that is refusing to provide essential dental services to pensioners, war veterans, the unemployed and those people in greatest need in the community. On the other hand, it is subsidising those people that can afford health insurance. It is a government that is condemning people who cannot afford dental health care to a life of misery, pain and illness.Recently a number of constituents have spoken to me about problems they are having in getting their teeth fixed. One man has been told that there is an 18-month wait to have his teeth examined and assessed. This man has just moved from Tamworth. He is suffering extreme discomfort and extreme pain.Mr Pyne interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—The member for Sturt! You are not assisting.83NHall, Jill, MPMs HALL—He has been most reluctant to get emergency dental work at the local dental service because he feels that he would be disadvantaging someone else. Can anyone in this House understand how much pain this man is in?Mr Pyne interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER—I hope the member for Sturt is not expecting the call.83NHall, Jill, MPMs HALL—The members on the other side are showing their total lack of compassion. They are supporting a scheme that will give medical insurance to people who can afford it at the expense of those people in our community who cannot afford it.Another man lost his dentures when he was on a ferry. He contacted a dental clinic and was told, `You have to wait seven years between your dentures,' and in this man's case it means waiting three years. The only way he is able to get new dentures is to make an agreement with his local dentist or go to Centrelink and get a loan. That is not good enough. These problems could easily be resolved if the Commonwealth dental program were in place.IK6LLOYDMr Lloyd—By the state government.83NHall, Jill, MPMs HALL—The member for Robertson should be most concerned about this, because the Central Coast Area Health Service services people in the Robertson electorate. He should be in there fighting to have the Commonwealth dental health scheme reinstated because it will benefit the people of Robertson. But instead, he wants to make sure that those people who can afford health insurance get treatment, not those people who are in dire need.The Hunter and Central Coast have long waiting periods. People who require dentures have to sit on a waiting list with 3,000 people. As I have already said, this can be remedied very easily. All it takes is the reintroduction of the Commonwealth dental scheme. If you find you are in need of emergency treatment, you have to wait. If you find that you are in need of dentures, you have to wait. And this has all eventuated since the Commonwealth Dental Program was axed.When I was a state member of parliament before the program was axed, we had no problems. The day that program was axed problems about the dental program started appearing in my office and in other state members' offices. The list goes on and on. Nothing could be more basic than dental care. It is one of the most important ways of enabling a person to enjoy a decent quality of life. The axing of the program is another example of how the mean, miserable policy of the Howard government and of the people on the other side of this House is affecting the lives of everyday Australians. How could any government withdraw a program that supports the provision of basic services? I urge the government to reconsider its actions, to look at the effect that the axing of this program has had on so many people. The Expenditure Review Committee of cabinet should think again. They should reinstate the Commonwealth Dental Program. (Time expired)165022:40:001650Billson, Bruce, MPMr BILLSON1K6DunkleyLP10—It is instructive to remember the words of the Governor-General when he opened the 39th Parliament:On the third of October, the Australian people re-elected the government and renewed its responsibility for managing the nation's affairs in the interests of all Australians.The government presented the Australian people with a clear set of goals for Australia into the next century, and a detailed strategy for achieving them.The government's priorities for its second term derive directly from those goals and that strategy.I could not agree more with that sentiment. It was a great honour to introduce the Prime Minister to a gathering in the electorate of Dunkley shortly before the election on 3 October and to highlight how it was this side of the parliament that was actually looking beyond the short-term gains and political manoeuvring, some of which we have just been exposed to, and looking into the long-term interests of the country. It was a courageous Prime Minister—and, I might add, a courageous coalition—that took that plan to the electorate and earned the support of the community to implement the plan, a plan that those opposite seem intent on objecting to.One of the things that stood out in my mind is that, just as the nation needs a plan, so does a local community. That was a message I was getting back from the electorate during the first 2½ years that I have had the honour of representing the Dunkley community. So as a result of that message I was hearing and as a result of the input from, and the opportunity to work with, local community groups and organisations I thought I would meet that challenge that was being expected of all of us and which only a few of us in this place—I would suggest that most of them are on this side of the parliament—took up and took to the electorate.The proposition I put to the electorate was a plan called Our Dunkley Destiny. It was a community action plan for the people and electorate of Dunkley that was designed to put forward some ideas and to put a commitment to the voters of Dunkley about what I would aim to do if I was fortunate enough to earn their support for a second term in this place.The reason for putting that plan forward was that in the first term that I was able to represent the Dunkley community many good things had happened for that community. We had gone from having a higher than the national and state average of unemployment to well below. We had made significant inroads into youth unemployment. We had seen recovery in the home values right across the community of the electorate of Dunkley, after the devastation that the Labor Party had wreaked on home values in our community.Those opposite might not realise that many of us who represent outer metropolitan electorates feel the sharp end of changes, of negative policies and of unhelpful policies, like those of the Labor Party. When they had record high interest rates, it affected our businesses and our local economies, because so many of those fringe metropolitan economies have building and housing construction as a key part of their economy, retail activity as a key part of their economy and other interest rate sensitive sectors of the economy. And it is no different for the Dunkley electorate.When this government came in and got the fiscal house in order for this nation, it started playing very real dividends for the Dunkley electorate. But the key thing is that the good work we have been unable to achieve during the first term of the Howard government and during the first term that I have had the good fortune to be the member for Dunkley needs to be worked upon into the next term.Mr Melham interjecting—10000DEPUTY SPEAKERMr DEPUTY SPEAKER (Mr Nehl)—The member for Banks is not obliged to interrupt continually.1K6Billson, Bruce, MPMr BILLSON—For the encouragement of the member for Banks, he might be interested in seeing what local advocacy is about, because this is a plan for an electorate. It has four key objectives. One of them involves building on our local regional employment strengths to create more jobs. And there are a number of actions that I plan to pursue during this term. It is also about supporting Dunkley people of all ages to fulfil their potential, because the Dunkley people of all ages have enormous potential and, with the support of a forward looking government such as the Howard government, we can do something really worth while for their lives.Just last Friday I had the good fortune of visiting Tanti Park Primary School—a primary school in the electorate in an area where, admittedly, I do not poll terribly well. It was quite an honour to visit that primary school, given that an invitation was also given to many ALP MPs—none of whom showed. I was happy to go down to that community and talk to them about my role and listen to their concerns.Another part of the plan was pursuing the care, comfort and community needs of the Dunkley community and, finally, adding value to the Dunkley community by taking advantage of its leisure lifestyle and environmental appeals.It is terrific to stand here as a result of the support of the Liberal Party in the Dunkley electorate. I would like to acknowledge the work of John Howard, my campaign chairman. I would like to acknowledge the support of my family and the whole Liberal Party team who have made an enormous contribution. I will not let them down. I will do my utmost to represent the community to the best of my ability. One thing is for sure: I will leave the Labor Party in my wake.165122:45:001651O'Byrne, MichelleMs O'BYRNE84SBassALP00—I rise tonight on a matter requiring the urgent attention of this government, that is, the replacement of the second Family Law Court judge in Tasmania. This matter has been the subject of notices of motion in the Tasmanian Legislative Council today, and it received wide cross party support. The motion that was carried without dissent reads as follows:That this council calls upon the Federal Government to appoint another Tasmanian based Family Court Judge as a matter of urgency.This is an urgent matter and it requires urgent attention. I shall start by providing members, particularly those opposite, with a brief history of this matter. In November 1994, Justice Butler indicated he wished to move to Hobart, and the Chief Justice approved this. As a result of practitioner pressure, the Chief Justice, Justice Hannon and the Judge Administrator met with practitioners in the Family Court at Launceston in December 1994. The Chief Justice gave an assurance that the service to the north of the state would not be downgraded. In January 1995, Justice Butler moved to Hobart. During 1995, various assurances were received from Warwick Smith that Justice Butler would be replaced at Launceston when he retired.On 26 April 1996, the Family Court proposed the closing of the northern registry and not replacing Justice Butler as a means of meeting budget cuts imposed by the federal government. To not replace Justice Butler was budgeted to save $305,000 per annum. On 18 October 1996, the registry closed for the last time. On 9 December 1996, Justice Butler was formally farewelled by the Full Court and sat for his last time. Since then, the north of the state has been serviced by visits from Justice Hannon in Hobart and visits on circuit from mainland judges. Since 1996, judge time in the north of the state has reduced from 20 weeks to 12 weeks.On 27 July this year, the Family Law Court reviewed its procedures and cancelled all future appointments that had been made for pre-hearing conferences. It made a determination not to allocate any more pre-hearing, and therefore any more trial dates, until the large number of adjourned hearings were completed. At this point, the list of cases outstanding but ready for trial numbered 65. By the end of October that had grown to 108. By 24 November, that list had grown to 127. The court `estimate' was that `probably' they would be in a position to begin allocating pre-hearing conferences in February or March next year. We can only hope that that will lead to some trial dates before the middle of the year. It seems at the moment that there is no end in sight as more cases are being added to the list than can be dealt with by judicial determination or consent orders.How have the government so far responded to questions raised about the impact of not replacing Justice Butler in Tasmania? With spurious arguments. There have been claims that Tasmania does not need an additional judge because we are already `overserviced'. However, on our population base Tasmania can satisfy 1.7 judges. I also remind members that, when Justice Butler's replacement was finally appointed, that appointment was made in Sydney. This was despite the fact that, according to statistics at least, Tasmania's delays were worse than Sydney's at that time. According to the performance standard sheets, delays in Sydney were only 44 weeks for child matters whilst Tasmanian delays were 53 weeks. In Sydney, financial matters were taking 52 weeks against 60 weeks in Tasmania.While Justice Butler was sitting Tasmania had an incredibly efficient settlement rate—something I should think we all want to see. I have been told by government representatives that we should focus on diverting people away from the use of hearings. I fully support adequately funded education, counselling and mediation processes. However, unlike this government, I recognise the reality of the situation. It would be really nice if everybody could settle their disputes amicably. But in the real world some people cannot settle outside the court room, remembering that only five per cent of Family Court matters ever get to the point of requiring a hearing.There is no other option for these people. Every other avenue is closed to them. Not offering them access to the judicial system will not get families back together. It will not reduce the divorce rate. All it does is put those people who are already in untenable positions under far more stress. Unfortunately, time does not permit me to give explanations of how these delays are affecting families and particularly children. It is a cruel game to play with families. I urge the government to rethink its policy and to heed the concerns of the Law Council and the Tasmanian upper house and give Tasmania what they promised in 1996—a second Tasmanian based Family Law Court judge.165222:50:001652Pyne, Chris, MPMr PYNE9V5SturtLP10—I would guide the member for Bass to the Attorney-General's answer to a question in parliament yesterday on the federal magistracy. I think it will be clear to her that another Family Court judge is not required in Launceston because the federal magistracy will deal with the backlog of cases in both the Family Court and the Federal Court. But that is not the reason that I rise tonight.I rise to talk a little bit about a trip I recently took to Bangladesh where I was the guest of the National Democratic Institute, an organisation funded by the Congress of the United States, designed to promote democracy throughout the world. It is an offshoot of one of the main political parties there, but is independent of that party and funded by the United States Congress. I am sure other members in the House are familiar with it, in particular, my friend Mr Jenkins.I was sent to Bangladesh to do a feasibility study, an assessment, of whether it would be a useful exercise for the NDI to conduct a Democracies in Parliamentary Parties Program or a Democracy in Political Institutions Program in that country.People in this House who are familiar with Bangladesh would know that Bangladesh has had a chequered history of democracy since its inception in 1971 when it broke from Pakistan and became the state of Bangladesh. It had a democratic government for the first three years of its existence but after that time Sheikh Mujibur was assassinated and the government was taken over by the military. They remained in power until 1991. In 1991, democratic elections were held and political parties were elected. Since that time they have been strong proponents of democratic institutions.In my time in Bangladesh I discovered that they are a very homogenous population. Over 90 per cent are Muslim, they all speak Bangla and they are essentially East Bengalese people who work as a very confident country. In Australia we hear so many horror stories about floods and famine in Bangladesh, but the truth is that, while that does happen, they are a confident country that believes they have a strong destiny and great future. While the floods bring famine and destruction, they also bring three crops a year in Bangladesh, so that they are in fact not starving after the latest two months of floods in Bangladesh and are making their way in difficult times.They are an interesting democracy because the current Prime Minister, Sheikh Hasina, is the daughter of Sheikh Mujibur who was assassinated in 1975 and the Leader of the Opposition is Begum Khaleda Zia, the widow of the General Zia who was assassinated in 1981 by another military coup. This makes for a very interesting cauldron of events in Bangladesh and causes the relationship between the two major parties—the Bangladeshi Nationalist Party and the Awami League to be most interesting.Mr Melham interjecting—9V5Pyne, Chris, MPMr PYNE—Yes, terrible faction brawls. The interesting thing about that is that the NDI sent me there to discover, with Dal Gan Lee, a Korean professor, and Peter Manikas and Makram Ouiss from the National Democratic Institute, whether we could promote some sense of democracy within the political parties in Bangladesh and also some sort of cooperation between the two major parties—where they could use the parliamentary institutions themselves to create a sense of ownership of the parliamentary system and where they could just be good representatives rather than worrying about anything further than that—so that they would feel that by just being members of parliament, by just representing their electorates, by achieving things for their constituents and for Bangladesh would be a real contribution to Bangladeshi national life.We met with many of the people there, including the Prime Minister, Sheikh Hasina, a number of ministers, representatives of the Jamat Islam Party, the Bangladeshi Nationalist Party, the Awami League and the Jatiya Party. We resolved that a program would be useful in Bangladesh, particularly in promoting democracy within the political parties there and also in promoting the use of parliamentary institutions—standing committees of the parliament, a speaker's panel, appointing a deputy speaker from the opposition—in order to promote a sense of cooperation between the political parties and that a number of measures within the political parties, such as having political party committees with chairmen and deputy chairmen, would be useful to Bangladeshi national life. (Time expired)165322:55:001653Sercombe, Bob,MPMr SERCOMBEQK6MaribyrnongALP00—I want to raise a very grave matter, that is, the death in Greece of a constituent of mine on 3 June, a 28-year-old man called George Karalis. The circumstances of George Karalis's death led, on 16 June, to the Coroner's Court in Victoria issuing a coronial court order with some 17 requests concerning the death that I am advised DFAT has communicated to the Greek authorities. Some of the items that the coroner in Victoria has requested through DFAT are for the Greek authority to provide a photograph of the crime scene, photographs of any exhibits, photographs of the deceased persons—there was another person killed in the same circumstance, a cousin of George Karalis—any drawings of the crime scene, any post mortem reports, reports on forensic examinations and the like.It would appear that that request from the Coroner's Court in Victoria would have been encouraged by a cable that appears to have come from the Australian post in Athens the day before on 15 June where the following is said under the heading `Unclassified Consular—Deaths—Karalis':We were informed by the Hellenic Ministry of Justice (Mrs Daphni) that an Australian court order would be valid in Greece under a reciprocal arrangement scheme.The court order should be addressed to the district-attorney's office of Athens.That particular communication appears to have produced the court order from Melbourne. It was translated into Greek and the adequacy and accuracy of the translation was certified by the Greek Consul General in Melbourne. Yet, almost six months later, all that appears to be coming out of the Greek authorities at the present time is an indication that their investigations are at a delicate stage and that they have still not complied with the coronial court order from Victoria.In terms of the circumstances of the case, Mr Deputy Speaker, time prevents a detailed description. However, Karalis was found in a boat with a rope loosely tied around his neck. His wrists had been slashed and knife gashes crisscrossed his chest. His cousin, who was also found in the boat, had wounds consistent with the repeated ramming of the person against the propeller blades of the boat. When the Greek police eventually attended the scene, many hours, I believe after the fact that the boat was floating with two bodies in it, they towed the boat in. Within hours they indicated that they believed it was murder suicide. That particular claim has absolutely outraged the families of these two men, who were very close cousins, and has led to them pursuing this matter with great vigour.The families are absolutely convinced that the death scene was staged to create an impression. As I said, I do not have the time to go into the detail at this particular stage as to why they believe it was staged but it would appear that the claims initially made by the Greek police of murder suicide do not bear even the most elementary of scrutiny. Later police theory has emerged in Greece that one of the cousins died while trying to fix the boat's propeller and the other cousin, my constituent, responded to this by killing himself, presumably because he was greatly grief stricken. (Time expired)23:00:001654House adjourned at 11.00 p.m.Notices1654The following notices were given:Mr Laurie Ferguson to move:That this House:(1) notes that the Royal Commission into British Nuclear Tests in Australia concluded that the 1983 Survey of Health of Former Atomic Test Personnel cannot be regarded as an adequate epidemiological study;(2) expresses concern that there has been no further official study into the health and mortality of Australian personnel who participated in British nuclear tests and subsequent clean-up operations; (3) acknowledges that the USA accepts as radiogenic a range of cancers and other conditions experienced by military personnel who were exposed to ionising radiation;(4) notes that studies of British nuclear veterans have been conducted by the UK National Radiological Protection Board in 1988 and 1993 and, more recently, through Dundee University for the British Nuclear Tests Veterans Association;(5) calls on the Minister for Defence to commission as a matter of urgency a rigorous health and mortality study of Australian atomic ex-service personnel and their children and grandchildren; and(6) supports the involvement of independent researchers and representatives of the ex-service community in the design and conduct of such a study.Mr Anderson to present a bill for an act to amend the Navigation Act 1912, and for related purposes.Mr Anderson to present a bill for an act to amend the Civil Aviation Act 1988, and for related purposes.Mr Williams to present a bill for an act to create the Office of the Privacy Commissioner, and for related purposes.Mr Reith to move:That so much of the standing orders be suspended as would prevent:(1) the Leader of the House making one declaration of urgency and moving one motion for the allotment of time in respect of the following Bills: A New Tax System (Goods and Services Tax) 1998; A New Tax System (Goods and Services Tax Imposition—Excise) 1998; A New Tax System (Goods and Services Tax Imposition—Customs) 1998; A New Tax System (Goods and Services Tax Imposition—General) 1998; A New Tax System (Goods and Services Tax Administration) 1998; A New Tax System (Goods and Services Tax Transition) 1998; A New Tax System (Fringe Benefits Reporting) 1998; A New Tax System (Medicare Levy Surcharge—Fringe Benefits) 1998; A New Tax System (Australian Business Number) 1998; A New Tax System (Australian Business Number Consequential Amendments) 1998; A New Tax System (End of Sales Tax) 1998; A New Tax System (Personal Income Tax Cuts) 1998; A New Tax System (Compensation Measures Legislation Amendment) 1998; A New Tax System (Bonuses for Older Australians) 1998; A New Tax System (Income Tax Laws Amendment) 1998; and A New Tax System (Aged Care Compensation Measures Legislation Amendment) 1998; and(2) (a) the resumption of debate on the second readings of (i) orders of the day Nos. 2 to 10 and (ii) orders of the day Nos. 13 to 16 being called on together; (b) one question being put in regard to, respectively, any amendments moved to motions for the second readings, the second readings, the consideration in detail stage and the third readings of (i) orders of the day Nos. 2 to 10 and (ii) orders of the day Nos. 13 to 16 together; (c) messages from the Governor-General recommending appropriations being announced together; and (d) speech time limits at the second reading stage being 10 minutes for each Member speaking.Documents1656The following papers were deemed to have been presented on 8 December 1998:Lands Acquisition Act—Statements under section—40.125.Migration Act—Certificate under section 502 2 December 1998.