1999-04-203912SENATE381101999-04-20The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 9.30 a.m., and read prayers.Bills3812r703Billsr667Billsr666Billsr702Billsr699Billsr698Billsr664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Billsr761Billsr765Billsr763Billsr764Billsr757Billsr760Billsr758Billsr759Billsr756Billsr7623812Debate resumed from 19 April on motions by Senator Ian Campbell, Senator Ian Macdonald and Senator Patterson:That these bills be now read a second time.and on the amendment moved by Senator Cook in respect of A New Tax System (Goods and Services Tax) Bill 1998 :Omit all words after "That", substitute "the Senate condemns the Government for:(a) 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;(b) 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; and(c) 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".and on the amendment moved by Senator Margetts in respect of A New Tax System (Wine Equalisation Tax) Bill 1999 :At the end of the motion, add "but that the Senate:(a) notes: (i) that cask wine is a category 1 cause of alcohol abuse, with alcohol abuse: (a) costing taxpayers $4.7 billion annually; (b) contributing to more than 3,700 alcohol-related deaths annually; (c) contributing to 730,000 hospital bed-days; and (d) being a prime cause of human distress, through health problems, serious accidents, family breakdowns, unemployment and alcohol related offences; (ii) that a study commissioned by the Department of Health and Family Services in 1995 estimated that alcohol is associated with: (a) 44% of fire injuries; (b) 34% of falls and drownings; (c) 30% of car accidents; (d) 50% of assaults; (e) 16% of child abuse; (f) 12% of suicides; and (g) 10% of machine accidents; and (iii) that aboriginal people in Australia experience significantly higher rates of alcohol-related illness such as alcoholic cardiomyopathy, alcoholic gastritis and alcohol liver cirrhosis as well as traumatic injuries, road accidents, suicide and violent death than do non-aboriginal Australians;(b) expresses major concern: (i) that the current taxation arrangements in relation to wine have an adverse effect on public health, safety and order; (ii) the Government's proposal for a price-based wine equalisation tax (WET) will perpetuate the anomalies in the present system which result in cheap cask wine being taxed at one fifth of the level applied to low alcohol beers; and (iii) the Government's WET proposal will not address this wide range of social concerns associated with alcohol abuse; and(c) considers that it is only by taxing alcohol content that incentives can be introduced to produce lower alcohol, less toxic beverages".09:31:003812Sherry, Sen NickSenator SHERRYZW4TASALP00—We are considering in the second reading debate the Liberals' tax package, which contains two main elements: a goods and services tax, replacing the current wholesale sales tax and nine other taxes; and, secondly, reductions in income tax. There has been a considerable range of claims and assertions made by the Liberals to support their radical reforms.Amongst the claims that have been made are claims that the tax system is broken and inefficient and that consequently modernisation is required—which, it is argued, will result in improved efficiency and simplicity. It is claimed that economic growth will be boosted, that jobs will increase and that exports will be stimulated. It is claimed that investment and savings will improve and also that there will be greater incentive. These are what they are: claims and assertions. They are a mixture of half-truths, gross generalisations and political rhetoric—glib assertions with little or no supporting evidence or research. They are simply not fact.Let us firstly look at the proposed reductions in income tax. Most importantly, the reductions in income tax are funded by the budget surplus. They are not dependent upon the introduction of a goods and services tax. Australians can have the income tax cuts tomorrow without a goods and services tax. Regrettably, I do not think this is widely understood in the community.In themselves the income tax cuts are inherently unfair: they are biased towards higher income earners. Let us look at a couple of examples drawn from what is referred to as the government's `ANTS package'. Take a dual income family, where each adult is contributing equally to the family income, with two dependent children. If that dual income family has an income of $25,000 per year, there is a tax reduction of $17.65, or 3.1 per cent. For the same family with a dual income of $50,000 per year, there is a tax reduction of 1.8 per cent. A dual income family with income of $75,000 per year gets a tax reduction of $61 per week, or 5.6 per cent.Take a single person earning $25,000 per year. They will get a tax reduction of $5.10 per week, or 1.3 per cent. A single person earning $75,000 per year will have a tax reduction of $68 per week, or 7.3 per cent. A single income family with two dependent children and earnings of $25,000 per year will have a tax reduction of $16 per week, or three per cent. A single income family with two dependent children and earnings of $75,000 per year will receive a tax reduction of $106 per week, or 10.9 per cent.The irrefutable fact is that the top 20 per cent of income earners in this country will receive over half of the proposed income tax cuts. Those figures speak for themselves. The income tax cuts favour the rich in our society—and, of course, lower and middle income earners are left to tackle the problems of a goods and services tax. The Liberals call this `incentive'. But, in reality, the income tax cuts squash low and middle income Australians, particularly with the Liberals' approach to industrial relations. The sad reality is that it is impossible for the vast majority of Australians who earn below average weekly earnings—currently about $36,000 per year—to reach $75,000 per year, which is where the maximum benefit is received under the Liberals' income tax cuts.I now turn to the goods and services tax. Firstly, we have to ask ourselves these questions: is the current tax system broken? Is it bankrupt? Is it failing to collect the tax revenue that is necessary to finance government? In this context, the current wholesale sales tax is widely criticised—and, I would argue, unfairly criticised. On the latest evidence, the wholesale sales tax collections for the six months to the end of December 1998 increased by nine per cent. You would not think that—given the claims of this government. Wholesale sales tax collections have been increasing. They increased by nine per cent, well in excess of current economic growth.Even the most pessimistic projections about the future collection of revenue from wholesale sales tax—and I refer here to a recent study by Access Economics—reveal a possible decline in revenue from wholesale sales tax of at most $100 million a year. That is a minuscule decline in revenue in the context of current government revenue and budget surplus. The other point about a wholesale sales tax is that it is certainly a more efficient tax to collect than the proposed goods and services tax, because there are only 70,000 tax collectors involved in the collection of a wholesale sales tax.The current income tax system is clearly being evaded, particularly by high income earners, with the use of such vehicles as trusts, and effective action is needed in that area. But a GST does not magically solve the problems of Australia's tax system, just as it has not solved the tax problems or the economic problems of those other countries that have introduced it. They are continually having the same debate that we are having, and they have had VATs, as they are known, or GSTs in most cases for many years.The GST is a regressive tax. It is a flat rate tax—in this case, 10 per cent—on most goods and services. So the lower a person's income, the greater the impact on a person's living standards. That is why compensation is required. Even the Liberals will admit that compensation is required. The GST brings into the tax net the essentials of life: most food, clothing, power and rent. This will hit hard at those least able to afford it: low and middle income earners, the unemployed, the retired—and when I say retired, I mean those who are pre- and post-65 years of age—and families with children.I have already indicated briefly how unfair the income tax cuts are. The evidence before the Senate committee of which I have been a member confirms that there will be up to two million losers as a result of a GST. And even Treasury have confirmed that many people cannot be compensated, because they do not have a relationship with government in terms of transfer payments, social security payments. A few examples include: many retirees, working age people on workers compensation or transport or accident compensation, new migrants and low income farmers. They are but a few examples of people it is extraordinarily difficult to compensate.But even if people could be compensated, will the compensation last? What is to prevent a future government cutting the compensation in the name of budget responsibility? I can predict one thing for sure: that will happen at some point in time. It will not be high income earners who suffer as a result of having to balance the budget and having to cut government expenditure; it will be the low and middle income earners whom some attempt has been made to compensate in this package. This is exactly what occurred in New Zealand. The GST came in. Compensation was paid to low and middle income earners. And then, five years down the track, low and middle income earners had to bear the brunt of reductions in the compensation to offset the impact of the GST.Current compensation to pensioners, veterans and disabled pensioners will erode over three to four years. Mr Howard finally admitted on Sunday that the compensation being offered to these groups will erode over time. It is a sleight of hand. This is a clear indication that Mr Howard, Mr Costello and the Liberal government have no intention of maintaining the so-called compensation. To the Liberals, compensation is simply a necessary evil to dress up the package and get their highly regressive tax changes through the Senate.There are a range of other deep-seated problems with a goods and services tax. For example, the goods and services tax is replacing the wholesale sales tax. The Liberals argue that the reductions in costs as a result of the wholesale sales tax will be passed on in full, 100 per cent, from day one—from 1 July next year, if this package is passed, wholesale sales tax is gone and all the cost savings will be passed on to consumers straightaway. I suggest that that is not going to happen, because it is simply not real world. It is not real world for price reductions to be passed on in full from day one.Let us look at business. The number of tax collectors under a GST increases from 70,000 tax collectors in the wholesale sales tax system to 1.6 million tax collectors. Every business or service, everyone involved in the ownership of those businesses and the management of those businesses, becomes a new tax collector. There are 70,000 businesses collecting the wholesale sales tax, as I indicated. There are about 70,000 taxi drivers in this country, who are obviously not involved in collecting the wholesale sales tax. Those 70,000 taxi drivers alone become new tax collectors.It is patently obvious that when you have over 1½ million new tax collectors there will be additional paperwork and additional cost. In fact, the additional cost, the compliance cost, to those more than 1½ million new tax collectors totals approximately $2 billion. This falls hardest on small business. It is relatively easy for big business in this country—the BHPs, the Coles-Myers, the banks—to collect a GST, but it is not so easy for the corner store.This government has assumed that the extra costs of collecting a GST will not be passed on in terms of higher prices. I would suggest that real world experience shows, particularly if you are a battling small business owner—you have to do additional paperwork and there are additional costs, whatever those costs may be, such as start-up costs, a new computer system, a software system, and additional ongoing costs—that you are going to pass the costs on to the consumer. The Liberal government assumes in its package that these costs will not be passed on. It is just not the real world.It is argued that there is a cashflow advantage. BHP and Coles-Myer will be collecting millions of dollars in GST. They will run out and put it on the short-term money market, so there is an obvious advantage for big business. But I suggest that the corner store will not derive much financial advantage from putting their few thousand dollars of GST tax on the short-term money market.With regard to the issue of employment, the Monash modelling that was presented to our Senate committee—and this is a worst case scenario—found that up to 120,000 jobs could be lost over five years if wages rise in response to price rises from a goods and services tax. But if we take the best case scenario, Treasury, which advises the Liberal government, has said there will be no jobs resulting from a goods and services tax. And let us take the best case scenario: no net jobs resulting from a goods and services tax. Some industries under a GST do better than others. The mining industry, for example, does gain, but tourism is a major loser. Interestingly, tourism is our largest export industry. One of the arguments which the Liberals advance is that we should not be taxing exports. And here we are introducing a new tax on our largest export industry and, not incidentally, certainly in terms of job growth, one of the most significant industries which Australia has.Even the modelling by a supporter of a goods and services tax, Mr Murphy—and he is the favourite of the government—indicates that there will be jobs gained in some industries and jobs lost in some industries. This will result in some regions of Australia, notably Queensland and my home state of Tasmania, losing employment as a result of a GST. And in the case of Tasmania, there will be approximately 1,000 jobs lost over five years.There is the argument of national economic gain. I again refer to Mr Murphy, the Liberals' favourite economic modeller and a supporter of a GST. He estimated initially, in the run-up to the last election, that there would be about $1 billion in national economic gain to Australia. He has revised that figure down since the election and his latest figure is that there will be a national economic gain of $600 million.Let us put that into some sort of perspective. A national economic gain of $600 million sounds like a lot of money. But that is worth, on average, 65c a week for every Australian. Of course, that is an average figure so, clearly, higher income earners will be a lot better off than the average in the sense of the 65c a week figure, and lower income earners will be a lot worse off than 65c a week. That is the national economic gain.The GST will not solve the problems of the black or cash economy. It will not solve the problems of tax evasion. Recently, the International Monetary Fund, in a major study of GST tax systems around the world, identified a range of methods by which a GST—or GST type taxes—could be evaded. You have only got to look at what happens in countries such as Italy and France, where tax evasion is massive, to see that it has not solved their problems. They have a VAT. A recent Canadian study—Canada introduced a GST eight or nine years ago—found that tax evasion went up as a result of a GST. It is not the solution.Most comparable countries around the world, except for the United States, now have a goods and services tax or a VAT. Like us, however, these countries—the United Kingdom, Sweden, Germany, France, Canada and New Zealand—are continually debating how to fix and modernise their tax systems. Interestingly, most of these countries that have introduced a VAT or a GST have higher unemployment than Australia. In all of these countries, savings—which are important for investment and economic growth—have gone down rather than up as a result of a goods and services tax.The vast majority of those countries that have introduced a GST have increased the GST rate. In the United Kingdom, it was 10 per cent and it is now 17.5 per cent. There are two certainties about a GST: once you have got it, you are always stuck with it, and it always goes up.New Zealand and Japan are two recent converts to a GST but it has failed to solve the problems of their economies. On balance, a GST—it is not a new tax, it is an old tax—is simply not worth it. It is unfair, unjust and costly, and it should be rejected.09:51:003816Hogg, Sen JohnSenator HOGG7L6QLDALP00—I have been involved, on another committee, in an inquiry examining the developments of contemporary Japan and the implications for Australia and, interestingly, there was recently a financial stimulus package to try to boost its economy. Part of that package included an increase in the rate of consumption tax. From memory, I think it increased by about three per cent. The result of that increase in rate was to further depress the economy. People refused to spend because of the uncertainty that existed in the economy.This is just one of the by-products of having a consumption tax—or a goods and services tax or a value added tax—that has no cap and no ceiling. It does nothing but flatten any stimulus in the economy at times when people are struggling. I was therefore interested in hearing what my colleague Senator Sherry had to say.From my perspective on this issue, I want to address a few issues; in particular, the fact that the fundamental principle at stake in this is that we are dealing with an iniquitous tax which is based on a principle that I disagree with rather than on the principle of capacity to pay. I have always believed that taxation should be based on a person's capacity to pay and not upon anything else. In other words, those with the greatest capacity to pay should pay the most. Those with the greatest wealth, the greatest income, have, in my view, a moral obligation to pay the most in terms of their contribution to taxation.No-one likes paying tax. If you asked people, `Would you pay tax if you had the option?' they would say no. It is a fundamental principle that those with the greatest capacity to pay should pay the most and those with the least capacity to pay should pay the least. That does not seem to be the focus of debate in this particular argument. The government is hell-bent on bringing about what it calls a new tax system, which my colleague Senator Sherry rightly described as not being a new tax system at all. The key issue is whether we should have a taxation system in which those with the greatest capacity to pay are let off the hook while those with the least capacity to pay get a greater amount of the burden. Should they have to bear that burden upon their shoulders?To my way of thinking, the morally fairest position—and that term has been bandied around in this debate—is that those with the greatest capacity should pay the most. In other words, we should have a progressive tax system rather than adopting the goods and services tax, which is nothing other than a regressive tax system. By regressive, I mean that it tends to flatten out the rate of tax and tax everyone at around the same rate.Under the GST, we are dealing with a taxation system which will discriminate against the poor, who are the most vulnerable people in our community. They are the people with the least ability to defend themselves and to fight for their rights. They have the greatest call upon whatever disposable income is at their beck and call. In my view, this tax discriminates quite markedly against the poor.No matter what compensation package the government might put up in this case, it does not make its tax a just tax; it does not make the GST a fair tax. On that count alone, one would have to reject this tax out of hand because it shifts the burden from the rich to the poor. It shifts the tax burden from the strong to the weak. It shifts the tax burden to those who are vulnerable—those in the low and middle income earning brackets and those in the fixed income earning brackets. It shifts the tax burden to those people. To me, that is not morally sustainable.People who have the least capacity to pay will be slugged with a tax that has no benefits for them in any way whatsoever. The GST does not distinguish between rich and poor on the necessities of life. It treats everyone equally in that sense and, in that way, it is a very discriminating tax. Everyone pays at the same rate. Government reforms are taking place when there has been no outcome of the reform to the corporate or company tax in this country. It is being done blind; it is being done in a vacuum. We have not seen what benefits the corporate sector will get. We have simply been told that there is a compensation package, albeit a miserable one, for the low income earners and disadvantaged people in our community. This whole process should not be taking place without knowing what is happening in the corporate area.Meanwhile, in other places, the Prime Minister has announced tax cuts to the corporate sector to fund charity, at the same time as slugging charities with extra costs and taxes through the GST. Having said that, I want to look at the less fortunate end of town. I received a number of people in my office in Brisbane who had made a submission to the Senate Community Affairs References Committee on 5 February this year as part of the inquiry into the GST. They felt that their case had been understood by the Labor Party members of the committee but had undoubtedly not been understood by the government senators who were present.Those people were representatives of the Boarding House Owners and Managers Association and the Supported Accommodation Providers Association. Both organisations have for-profit membership. In other words, the members of these associations actually make a profit out of running a boarding house or a supported accommodation facility. In the Hansard of 5 February, at page CA 412, these people gave a synopsis of the type of people that they represent and the type of industry it is. They said:As to the appropriate size of our industry, the 1990 Queensland government survey revealed over 1,000 licensed facilities housing over 23,000 clients. The people whom supported accommodation and boarding houses house are people with psychiatric and intellectual disabilities, people with alcohol and drug dependencies, people with acquired brain injuries, the aged, aged psycho-geriatrics, and others who are socially and economically disadvantaged already.A 1990 survey showed that there are 1,000 facilities with 23,000 clients in Queensland. The extent of these facilities today and the number of clients they could or would be servicing I would contend has only gone up; it has not gone down in any way. There are no reliable statistics as to what the magnitude of the problem is on an Australia-wide basis.It is interesting to note that the type of people they are dealing with are not those who are well advantaged. They are dealing with people who are severely disadvantaged; people with psychiatric and intellectual disabilities, alcohol and drug dependencies, and acquired brain injuries, and the aged and aged psychogeriatrics. In addition, whilst it was not on the list there, in their submission to me they clearly pointed out that they had many clients who were long-term unemployed.We are dealing with a very socially and economically disadvantaged group of people and, in the words of those who came to see me at my office, we are dealing with those people who can be best described as being dysfunctional people in our society. We are not dealing with a small number; we are dealing with a very large number indeed.The people from the Boarding House Owners and Managers Association and the Supported Accommodation Providers Association are in the business of providing long-term accommodation for these people. Whilst these people are in this long-term accommodation, they are invariably in and out of the accommodation whilst they seek further assistance for their problems.These boarding houses and the Supported Accommodation Providers Association premises were typically identified with old men. That was what typified the boarding house scene many years ago. These people tell me today that it is quite the opposite. Today it is across the gender and across the age group. Where once upon a time there may have been clearly one group that could be identified in that accommodation, today it is across gender and across age.Of course, these people use all of their disposable income. Most of the income they receive is from some form of social service benefit. We are not talking about those people who are well-endowed. It was impressed upon me that the compensation that the government is offering as part of its package, firstly, is not enough. The compensation is miserable when you consider the plight of these people. Secondly, any compensation will not last. It is not going to last the long term during which these people have to suffer their disabilities.I will deal with the accommodation side of it in a few moments, but apart from that, the Supported Accommodation Providers Association in particular provides a range of services which will have the GST applied to them. Those services include services such as showering a client. Many of the clients in these facilities are unable to shower themselves so a fee is charged—and rightly—to shower them. Also, meals are prepared; in many instances first aid is supplied; laundry is done; cleaning of the facility has to be done; and personal grooming, such as hair cuts and the like, as well as clothing, have to be provided.At the end of the day these people cannot afford a GST. In their minds a GST is a luxury that they can completely do without. When it comes to accommodation, if they stay 28 days or more in these facilities, a five per cent GST will apply to the accommodation and 10 per cent to the services. If they stay 27 days or less, a 10 per cent GST prevails. However, there is another clause. If less than 70 per cent of the people at the facility stay less than 28 days, then they pay a 10 per cent GST for the first 27 days of their stay and a five per cent GST for all the days thereafter. If that is not complex, complicated and confusing—firstly, to the people who are managing these facilities, and, secondly, to their tenants—and a financial nightmare, I do not know what is. This system will make life for these people infinitely harder quite unnecessarily. And, of course, it will bring upon itself all the complexities associated with that regime of stays that I have just outlined.The government said post the inquiry that they had addressed this problem, but I sincerely believe that they have not addressed it at all in any way. Because, if the government were to address that problem, there would be hundreds of other similar problems which the government would equally have to address which they refuse to address. So, here we have those people who are already disadvantaged being further disadvantaged by the application of a goods and services tax.Those people in our community who are in a wealthy position, who are well-heeled, will always look after themselves very well, thank you very much. They are already well-positioned to minimise their tax. Invariably they have a battery of solicitors, accountants and financial advisers to minimise their tax commitments. The disadvantaged people I have just spoken about have no such facilities at their disposal. They are invariably in poverty traps and are socially and economically disadvantaged. Yet we have the government telling us about this brave new goods and services tax, and we have these people who are going to be severely disadvantaged indeed. And remember, the figure of $23,000 that I quoted was from a survey back in 1990 and related to Queensland alone—no-one knows the full extent of the problem Australia wide. Bearing in mind that the government have said they would address the issue, it is my belief that they have not addressed it at all. But those people who are disadvantaged are not going to sit back and welcome a GST—they are, of course, going to be plagued by it.A number of my colleagues have canvassed many of the issues, but the one that really sticks in my craw is on page 186 of the Tax Reform: not a new tax, a new tax system document issued by the government last year. On that page is an analysis of the benefits to various income groups and of various stations in life. The group that I want to refer to is entitled, `Single income couples with three dependent children one aged under 5 years.' It is interesting to note that, where a person earns $25,000, the claim for the cuts to personal income tax and increases in family package benefits amounts to a miserable $23.94 per week. If you have three kids and you think a benefit of $23.94 is going to go anywhere under a GST then you have something new waiting for you.But the real inequity is when you look at someone who is on about $80,000, which is about the level of a politician's wage. What does that person get? They end up being $152.56 a week better off from cuts to personal income tax and increases in family package benefits. I just cannot reconcile those figures. It really assists those who are at the better end of town—those who can afford it. This gets back to what I said at the start—that this should be a matter of principle whereby those people with the greatest wealth, the greatest capacity to pay tax, pay it and those with the least capacity get the greatest benefit. But if you look at that example alone, it shows quite clearly what the government's package is designed to do. It is designed purely and simply to assist those who are the most advantaged and to disadvantage those who are the most vulnerable in our community. (Time expired)10:11:003819Allison, Sen LynSenator ALLISON1M6VICAD00—On behalf of the Democrats, and in my contribution to this debate on A New Tax System (Goods and Services Tax) Bill 1998 and related bills, I want to take up the environmental and public health consequences of the new tax package. A very significant part of the package is the $3.5 billion in cuts to the diesel fuel excise. This measure is neither responsible nor smart, and the Democrats regard major changes as being absolutely essential, changes without which we could not support the tax package.As the Senate Environment, Communications, Information Technology and the Arts Committee discovered, there are profoundly disturbing reasons why changes are necessary, and the reasons are as much economic as they are about public health and the protection of the environment. It is very clear to us that, like so much of the tax package, this was developed by Treasury in a policy and consultative vacuum—and I must say that it shows. Neither the Australian Greenhouse Office nor Environment Australia, nor any other department, was invited to assist with the drafting of the legislation. In fact Environment Australia admitted to the committee that it was looking into the environmental effects but would not be reporting back until June this year—so much for a whole of government approach!The Democrats and the Senate environment committee have, as usual, filled that vacuum, and I think we have found a way to achieve the government's stated objective of reducing regional transport costs by that promised $1 billion. We have done this in an intelligent way which will not put Australia back decades in ecological terms and will not worsen our already serious problem with air pollution in this country.There were in fact very few supporters of this package amongst those who made submissions to and appeared before the committee. Almost all said they had no argument with tax reform per se, including a GST, but they were strongly critical of the part of the package relating to diesel cuts. The Australian Railway Association, Rail 2000, the National Rail Corporation, Queensland Rail, the Bus Industry Confederation, Streamliner Supershuttle Ferries Pty Ltd and the Australian Rail, Train and Bus Industry Union all attacked the diesel cuts. The gaseous fuel industry came out in force against the cuts, as did oil recyclers, conservation groups, the sustainable energy industry and public transport users. The Australian Medical Association warned that the package would see more people dying from fine particulate air pollution as a result of the increased use of diesel.The fact is that the government missed a rare opportunity to reform the tax system for positive environmental outcomes. Australia is one of the few countries in the OECD which has not implemented ecological tax reform and, rarer still, has proposed that there be a significant reduction in the price of fuel. Italy, for example, has just introduced ecological tax reform, and the price of most fuels will progressively increase until the year 2005. The money that that generates will be used for employment and antipollution initiatives. At the same time the cost of LPG will fall. Germany has embarked on a comprehensive program of ecological tax reform, and even in the US announcements have been made recently about tax credits for energy saving homes, appliances and vehicles.I remind the Senate that Australia has signed international obligations and agreements to limit its greenhouse gas emissions—the International Framework Convention on Climate Change and the Kyoto Protocol. Australia was in fact given an extraordinarily generous deal at Kyoto, but this tax package may encourage the international community to further question the seriousness of Australia's commitment to that protocol. The reduction in diesel fuel excise by 25c a litre, according to the Australia Institute, will be responsible for Australia increasing its greenhouse gas emissions by five million tonnes a year.The Senate will no doubt recall the Prime Minister's commitment to sourcing two per cent of our energy needs from renewables by the year 2010, thereby reducing CO² emissions in this country by 5.5 million tonnes a year. According to the many submissions made to the inquiry, this package virtually wipes out any potential gains made by this measure. Furthermore, it sends a very strong message to the international community that Australia does not consider greenhouse issues to be of central importance to the nation's future or, for that matter, the world's future.The Democrats accept that there are benefits for rural Australia in these cuts to diesel excise and for business, particularly the road freight transport sector, but the question which has to be asked is: at what cost? Environment Australia had to defend the package, arguing that the robustness of economic sectors delivered through the tax package would enhance the capacity of business to manage any economic adjustment in response to environmental policies—policies which, I must say, we have yet to see. But the reality is that there are no significant government policies which will offset this measure beyond the very small amount of assistance—$3.8 million over three years—which is being provided to establish fuelling stations for compressed natural gas. That is so far the best the government seems able to come up with.The most serious problem associated with this package is the consequential increase in the consumption of diesel. We already have in this country a serious problem with pollution from diesel. The National Environment Protection Council estimates that 1,062 people die each year from diesel particulate exposure. Those who die are predominantly young children, the elderly and those affected by cardiovascular and respiratory illness.Air quality is a factor in triggering asthma problems. About 1.4 million Australians have asthma, including one in five children under the age of 12. Asthma killed 825 people in 1994 and the medical cost of asthma to Australia is about $320 million a year, plus $400 million in lost work productivity. So the problem is economic as well as environmental.The problem with diesel is that the unburnt particles, particularly the smallest, invisible particulates, have the capacity to carry toxins deep into the respiratory system. The Californian Air Resources Board recently listed 40 diesel substances as toxic air contaminants. Particulate emissions from diesel in Australia are 100 times greater than those from the cleaner fuels such as compressed natural gas.The National Environment Protection Council noted in its 1997 air quality paper that air pollutants in our cities act on the lungs, nose, eyes, throat, blood, heart, central nervous system and other parts of the body. Impacts can range from premature death and hospitalisation to a range of less severe health effects, including increased asthma, eye irritation, sore throat, cough, headache and the activation of respiratory problems.There are four main reasons why the consumption of diesel will increase as a result of its reduced cost. The first is a shift in freight transport from rail to road, estimated to be somewhere between 10 and 20 per cent, and results from the differences in the proportion of costs attributable to fuel in the two transport modes, which gives road a significant competitive advantage over rail. The more highly contestable lines, such as Melbourne to Adelaide, will likely close altogether. Because rail is three to five times more efficient in terms of fuel per tonne per kilometre than road transport, any shift will increase overall consumption. For instance, a 10 per cent shift on the Adelaide-Melbourne line alone would see an additional 200 semitrailers every day, and they would consume an extra 50,000 litres of diesel. The University of Wollongong estimated that a 20 per cent loss of interstate rail freight would result in the consumption of an extra 50 million litres of diesel every year.The second area is the displacement of cleaner gas fuels. The small relative cost advantage gas has over diesel would be lost and with it any incentive to convert to gas—something which the government has previously said it wanted to promote. The Australian Gas Association, the Australasian Natural Gas Vehicles Council, the Australian Liquefied Petroleum Gas Association and others all condemned the fact that this tax package would cause the demise of the industry and with it any real chance of providing the transport industry with better choices and of reducing pollution and greenhouse gas emissions.A bus fleet the size of Brisbane's fuelled by compressed natural gas rather than diesel would generate 28 per cent less carbon dioxide and lower emissions of dangerous particulates. Heavy transport is now available which can run either dedicated CNG or with dual fuel options. But this package would discourage any move towards the use of these vehicles.This industry is in its formative stages and many transport operators which were on the verge of making decisions to go down the gas path are changing their minds and opting to stick to diesel. International Trucks Australia said publicly that the government's reduction in diesel price negated the economic advantages of using natural gas and they would not therefore continue with further CNG use until there were more favourable conditions for CNG use. The inquiry heard dozens of other examples of industry and public transport moving back to diesel.The cut in the diesel fuel excise will act as a very powerful incentive to switch from petrol to diesel, especially for vehicles at the lighter end of the range. Already there are three four-wheel drive vehicles which are over the government's weight threshold of 3.5 tonnes. That lower threshold acts as an incentive to increase the size and therefore the fuel efficiency of vehicles.There have been some improvements in fuel efficiency with new diesel engines, but vehicles in this country are still on average 10 years old. Australia has one of the oldest fleets in the OECD. The diesel cut, coupled with our low emission standards and ever more stringent standards overseas, will encourage the dumping of old vehicles in this country, which is itself a reason why diesel use will be increased. The last reason for diesel consumption increase is the so-called just in time manufacturing. Inventory management is moving away from keeping stocks of goods on site towards last-minute deliveries and any cost savings, the committee heard, through the diesel excise cuts are likely to be put to even faster and more competitive services.So our task in dealing with this legislation is to find ways to ensure that not only do we avoid using more diesel but also we actually reduce consumption in favour of other cleaner fuels whilst at the same time delivering lower transport costs to rural Australia. To do this, we will be putting forward amendments which will retain the current excise system on petrol and diesel, including the existing 100 per cent diesel rebate for all agricultural off-road use. We will extend that 100 per cent rebate to rail, acknowledging that it too is an off-road use. The total amount of the rebate for other off-road use we argue should be capped at the 1999-2000 levels and provided at a flat pro rata amount for all off-road use. This cap would encourage a shift to cleaner fuels and bring into the scheme industries such as tourism which have not so far benefited from off-road rebates.We will move to more tightly target the cuts to heavy, genuinely long haulage road transport and away from urban based trucking. To do this, we propose to raise the weight threshold from 3.5 tonnes to 20 tonnes. This measure will pick up 90 per cent of the freight on our roads. For agricultural use, we will drop that threshold to eight tonnes. This way, our farmers benefit across-the-board, from rail and road freight, both of which will be considerably cheaper. We will build into that rebate a sliding scale of incentives to move to cleaner and renewable fuels. On top of the rebate, we propose to maintain the current exemption from excise for compressed natural gas and liquid petroleum gas and to provide grants of up to 50 per cent of the cost of converting heavy vehicles to gas use and for the additional capital cost of new gas fuelled vehicles, giving high priority to public transport vehicles.The Democrats were surprised and appalled to hear that vehicle emission standards in this country were some four to five years behind European and American standards and that in this country there is no system of measurement or monitoring of the emissions of vehicles, regardless of the standards we have here. Furthermore, the sulfur content of diesel fuel used in this country is around 10 times higher than what is allowed overseas. The newest diesel engines have catalytic converters which reduce particle emissions, but these only work effectively with low sulfur fuel. We want to see the sulfur content linked to the level of excise as a means of encouraging the use of cleaner diesel. Sulfur can be removed from diesel in the refining process, but so far the petroleum industry has resisted any moves to oblige the supply of low sulfur diesel.The Democrats will not support a GST on public transport. With a GST, bus and rail will become more expensive in actual as well as relative terms. New cars will be cheaper and the drop in wholesale sales tax on petrol would hold it at its current retail price, except for rural areas, where it may increase marginally. The result would be that our already low level of public transport patronage compared with other OECD countries would drop further. We also propose to extend the government's proposed sales tax on luxury cars to include fuel inefficient cars.In the government's package, solar hot water services would rise in price by around four per cent relative to the price of similar gas or electricity hot water systems. The world leadership that Australia currently has in solar energy development and the potential for that industry to generate revenue in excess of $1 billion per year would be at risk by applying a GST to this equipment, and we propose to zero rate renewable energy equipment.The reduction of the diesel fuel excise would bankrupt the oil recycling industry, leaving at least 150 million litres of lubricating oil unable to be recycled every year. Oil which is not recycled or re-refined will be burnt or dumped, releasing the many toxic chemicals in sump oil such as zinc, phosphorus, barium, calcium, magnesium, silicon, sulfur, iron, chromium, nickel, aluminium, copper, tin, chlorine and lead into the air or into the soil, the water table and eventually waterways. Either way, the consequences are very serious. We will move to see a levy imposed on lubricating oil to ensure that there are funds available to pay for the cost of re-refining sump oil and removing those dangerous contaminants.In the view of the Democrats, the $2.5 billion in petrol and diesel tax cuts could be saved by these measures and the remaining $1 billion in fuel tax cuts used to take Australia into the new millennium in a way which is environmentally responsible and economically sound and which protects the health of so many Australians. The Democrats have for some time held the view that real benefits to business and jobs will come about by reduction in payroll tax, and reducing the fuel excise cuts by $2.5 billion will provide the opportunity to fund such reductions.10:28:003822Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—The new tax system proposed by the Howard government in these bills is bad for the economy and bad for jobs. More importantly, it is intrinsically unfair. One of the principles of the new tax regime is that no-one will be worse off under a GST. This has been clearly demonstrated not to be the case. Mr Stan Wallis, former Chairman of the Business Council of Australia, warned last week against anxiety to get this tax package through and said that Australia would wait another decade for tax reform if it squandered this opportunity. He then conceded to welfare and community groups opposed to the GST package, `You can't make economic reform work unless you've got the community with you. The community will buy reform if it passes the smell test.' These new taxes do not pass the smell test. There is no real reason to throw out the existing system of taxation and replace it with one that offers inadequate compensation for the aged and low income earners and that will mean extra hours spent poring over additional paperwork for small business owners. Australia needs real tax reform, not a GST.It is also wrong that the Senate should report and decide on these bills before the review of business taxation is completed. You cannot separate out the implications for changing to an indirect tax base while the situation of another major sector of the taxation base is still inconclusive and indecisive in terms of what the outcomes might be from that review.The first report of the Senate Select Committee on A New Tax System looked into the economic theories, assumptions, calculations, projections, estimates and modelling underpinning the ANTS package. The second report, tabled yesterday, examines the broad economic effects of the government's taxation reform legislation proposals with regard to the fairness of the tax system, the living standards of Australian households—especially low income households—the efficiency of the economy and future public revenues. The Senate select committee, of which I was a substitute member, heard from 1,500 individuals and organisations representing various business, welfare, church and community groups in submission form and at public hearings all over the country.A diverse range of issues arose, some of which I wish to canvass today. The main differences of opinion were the results of economic modelling to determine the impact of the GST on Australian society undertaken by a number of different groups from Treasury to academics and private consultants. Despite the Treasurer's claim that `We've done a lot of modelling', Treasury confirmed in the first round of the Senate inquiry that they had done no modelling of the macro-economic impact of the tax package, including employment, GDP and wage effects. In fact, the macro-economic effects of the package were nothing more than guesses.From other modelling undertaken there certainly were some interesting results, most of which provided no comfort for Australia's low income earners. Professor Peter Dixon from the Centre of Policy Studies at Monash University showed that the government's GST package would actually damage the Australian economy. While the Monash model projects a short-run increase in employment of 30,000—which is entirely due to spending the budget surplus on income tax cuts and has nothing to do with the GST—it will in the long run be job destroying, resulting in the region of 100,000 jobs lost under certain conditions. Professor Dixon also highlighted the importance of the movement of individual industry costs relative to the movement of costs in other industries.The ANTS package will have a negligible impact on long-run economic growth and efficiency and will cause a small reduction in average Australian living standards. Furthermore, claims made by the government that the existing system of taxation needs revamping because the wholesale sales tax is incapable of generating the necessary revenue for Australia's future needs were disproved by the Monash modelling. In fact, there would be a decline in indirect taxes due primarily to the discretionary decision making by governments and in particular to the significant decline in tariffs that have occurred over the past decade or so.The Society of St Vincent de Paul was critical of the modelling done by Treasury. The society outlined that Treasury had focused on national aggregate indicators of the burden of a GST and had applied those averages to specific sections of the Australian community, especially the poor. However, the actual burden for the poor is significantly higher, so compensation was a crucial issue for the society. Its submission showed that it is quite possible that for many households, lower income earners and families the adverse price impact from a GST package might be as much as five times that estimated by Treasury.The society undertook its own household expenditure survey of 271 households. It found that low income earners spend 27 per cent of their income on food and a further 34 per cent on essentials, utilities, clothing, et cetera, all of which will attract the full 10 per cent GST. High income households, by the society's reckoning, spend only nine per cent of their income on food. While Treasury may have questioned the statistical validity of the survey due to the small sample, it certainly brings into clear focus the inherently regressive nature of a goods and services tax.The modelling commissioned by the select committee—undertaken by NATSEM, the National Centre for Social and Economic Modelling—clearly highlights the inadequacy of the compensation for low income earners. Ten scenarios were modelled by NATSEM to provide an indication of the likely impact of the proposed tax reform. The co-authors of its report, Professor Ann Harding and Professor Neil Warren, suggested an extra $1.1 billion in compensation was needed to make the package fair, which amounts to a six per cent rise in pensions. This is a lot more than the ANTS package offer of four per cent. Particular options of the NATSEM modelling make it patently clear that single income families do better than dual income families in the ANTS package.Professor Neil Warren, from the University of New South Wales and co-author of the NATSEM report, commented last week in the Australian Financial Review that there were considerable problems with the ANTS package. These were that the compensation package is inadequate, those who are not taxpayers or social security recipients are forgotten and the compensation package will simply not last the distance—any benefits will in time be eroded. Dr Greg Smith, the head of the Commonwealth Treasury tax group, admitted this last point. He said that compensation for pensioners was likely to merge into normal pension increases—specifically, that if average wages rise ahead of prices the value of the 1.5 per cent guarantee would be eroded over time. In further correspondence to the committee following the 8 April hearings, Dr Smith, responding to Senator Harradine, said:. . . comprehensive estimates of those outside of the tax paying or social security receiving spheres simply are not available.He hypothesises that those people outside these areas could be (a) already operating in the cash economy yet avoiding existing tax liabilities; (b) on a low income for a short term or not yet eligible for social security benefits, such as the self-employed with business losses, new persons arriving in Australia and so on; and (c) people entitled to benefits but who do not claim them.Dr Smith says that it is impossible to compensate these people so Treasury has simply chosen to ignore them. Treasury seems to have forgotten about these one million retirees living off their savings, working age people living on workers compensation benefits, youths living at home until the age of 21, low income farmers and new migrants.Dr John Hewson, that great advocate of a goods and services tax back in 1993, defended the comments of Professor Warren when he said that `the NATSEM analysis confirmed that the government's GST compensation package is inadequate and that there will be losers'. He advised the government to admit there will be losers and to revamp the compensation package to ensure there will not be, and to ensure that the benefits of compensation are preserved into the future. Even John Hewson can see that there are losers from this tax package and that they will be the aged and other low income earners. The only ones who cannot see it are the Prime Minister and the Treasurer, who are simply looking at their package through rose-coloured glasses.In evidence to the committee, Professor Peter McDonald argued that `the model that is proposed and, more particularly, the compensation aspects are unfair to families with children' as `households are indicated in the model by their income only, not in any way by their composition'.Even the Australian Combined Pensioners and Superannuants Association have called for a complex $1 billion rescue plan to salvage the compensation package. More than one million pensioners will not be adequately compensated by the package as it stands.The Prime Minister, who did not give his best display on last week's Sunday program, did not accept the Senate committee's findings that the compensation is inadequate and shrugged off Professor Warren's concerns about this inadequacy as merely an `expression of opinion'. He went on to say, `The tax expert I take notice of is the Australian public, and they voted for our plan.' Yet John Howard and his government received less than 50 per cent of the vote at the 1998 federal election—in fact, a majority of Australians voted against his government.The Prime Minister did concede, however, that `some kind of finetuning at the margin' was possible, although he clearly indicated that that would be limited. He further promised that `pensioners will be fully compensated for every increase in the cost of living . . . and, in addition, they will always be one and a half per cent ahead of that'. But how could you trust him based on his record? He said that no-one would be worse off.No amount of compensation will make this package fair as it is inherently regressive. As has been shown, even the experts the Prime Minister has relied on for support are now saying that the compensation measures should be modified and food should be excluded. Professor Ann Harding said in the public hearing on 8 April that food should be exempted as a matter of equity. The Labor Party says that the government should go back to the drawing board and try again, as the ANTS package is not about tax reform; it is about attacking those who are least able to defend themselves.I have spoken in this chamber on a number of occasions about the issue of compliance. I want to bring to light some of the comments on this issue that arose from the Senate select inquiry. Michael Walpole of the Australian Taxation Studies Program at the University of New South Wales focused on the impact of the GST and compliance for small business. He detailed in his submission that VAT/GST systems around the world are accompanied by high compliance costs, and these costs are highly regressive and impact heavily on small businesses. Further, the burden is exacerbated by any additional complexities that might be added to the particular GST model chosen. In addition, recent research in the United Kingdom suggests that some small businesses turn work away to stay below the VAT compulsory registration threshold. Thus the level of the threshold can be critical if the GST is not to act as a brake on the economy. Michael Walpole went on to say at the hearing that the `GST will add to tax compliance costs', that there is a `regressive nature of compliance costs', and that `audit activity will be expensive', which increases the administrative and financial burden on small business owners across the country.The submission from the National Tax and Accountants Association Ltd said:. . . the initial cost and the ongoing cost of the GST compliance and management will be at least $7,000 per annum for each firm if not higher. This is a far cry from the absolutely ludicrous Government estimate of $130 and gives no credibility to the Prime Minister's promise in 1996 to halve the costs for tax compliance by business.When Ray Regan of the NTAA appeared before the select committee, he added that the GST would have a negative impact on jobs, that tax avoidance will be overbearing and that small businesses want to have systems in place to cope with the changes.I spoke to an owner of a small business just after the 1998 federal election. She runs a beauty therapy business in suburban Sydney. She said that she had not voted for the Liberal Party because of the threat of the GST. When I asked her why, she said that to make things easier for her business she would have to install a computer and an appropriate computer system to cope with the changes. This not only would cost thousands of dollars but would require more time and money to be spent to train herself and her staff to use the equipment. She simply wants to run a business, not to become a tax collector for the government.The committee received a submission from the Sisters of Charity Australia, a group of 240 religious women who have devoted their lives to helping the needy. The sisters provide a variety of services to many people in the community, such as providing safe houses at Casula in south-western Sydney for women victims of domestic violence, court assistance for families dealing with trauma and many other charitable works. Their representative at the hearings affirmed that the GST would be a disaster. The sisters believe that many pensioners and people on low incomes will go without food because the compensation package is inadequate.The Sisters of Charity will have great difficulties with compliance. They will need to put the appropriate accounting or financial systems in place. This will be a costly exercise and a skilled one, which means the sisters will need external advisers and new equipment to assist them in these matters. As they will be in a net refund position each month, returns will be lodged on a very regular basis. They will have to divert some of their funds into accounting, away from their charity work.The Sisters of Charity highlighted other problems they will have to deal with, such as providing food to those in need. Whether or not they are entitled to a tax credit depends on what is served, where and to whom. Their submission highlighted the significant compliance difficulties charitable organisations will face and proved that the GST is a complex tax—a view supported by accountants and academics alike. The sisters will now have to spend too much time and money collecting taxes for the government rather than helping those most in need. These are even more compelling reasons for the ANTS package to be rejected by the Senate.The ANTS package is another example of the Howard government's obsession with ideology and their contempt for ordinary Australians. Even small business owners face many difficulties. It is wrong that the Senate should report and decide on these bills before the review of business taxation has been completed. Low income earners, as will those who are outside of the taxation and social security channels, will be the hardest hit.Young people between the ages of 18 and 21 will be hit hard again—still dependent on their parents, unable to get a job and having to pay up-front fees to get into university. They will not be compensated. Women will again be forced back into the home, with the finding that single income households with dependants will fare better than dual income households with dependants, under certain modelling options.Retirees living off their savings will not be compensated in any way. After working all their lives they will have to dip even more into their savings for essential items and be forced onto social security benefits sooner than expected or desired. Pensioners do not come out ahead. The increase in their pensions by the estimated rise in the CPI plus an extra 1.5 per cent will be eroded after a period of approximately three years if wage growth is ahead of the CPI. After three years, pensioners will be no better off even after compensation, because it simply is not enough.The parliament has a duty to protect and support those who need assistance. No amount of compensation will make this package fair, as it is inherently unfair. Even the experts the Prime Minister has relied on for support of his package are now saying that the compensation measures should be modified and food excluded. We say the whole package should be thrown out and replaced with real tax reform.10:48:003826O'Chee, Sen BillSenator O'CHEEEU4QLDNP10—Madam Acting Deputy President, 1,500 years ago St Augustine is reputed to have said, `Lord make me pure but not just yet,' and 1,500 years later we see his tax acolytes on the other side of the chamber saying, `Give us tax reform but not just yet. Give us tax reform but do not give us real tax reform,' because they do not want to accept the replacement of the wholesale sales tax and other indirect taxes with a flat, fair and transparent goods and services tax. This is what this debate is about.And they come up with the most spurious reasons for opposing this package. Let me start with the speech we heard today from Senator Allison. The Democrats now oppose tax reform because they are concerned that we are reducing the cost of transport in Australia by reducing the impact of sales tax on trucks and by reducing the amount of excise that the government will get from heavy vehicle users, this in a country which has one of the sparsest populations in the world and this in a country where many people live not hundreds but thousands of kilometres from capital cities and are dependent upon road transport for their very existence. Yet the Democrats say to these people, `We are going to oppose these tax reforms, we are going to oppose these methods of reducing the cost of doing busi ness outside the capital cities, for the spurious reason that we are concerned that it is going to damage the environment.' If they wanted to be consistent, the Democrats would say, `Let's get rid of trucks altogether. Let's go back to the days of the horse and cart.' That surely would meet the requirements of improving people's standard of living and improving the health of the nation. The only problem is that when we had horses and carts people died of diseases because of the excrement lying in the street.The Democrats just cannot have it both ways. Either we are going to live in the 20th century—or the 21st century in a couple of years time—or we are not. It is so utterly hypocritical for the Democrats to run around before every election saying, `We are going to represent the bush,' and yet, when proposals come up that would actually do something to alleviate the tyranny of distance, vote against them every time. Of course they are arguing an absurd proposition, because the amendments foreshadowed by Senator Allison would do away with the diesel fuel cost reductions for heavy vehicle users but completely remove diesel fuel excise from rail. They accept the fact that you have to use diesel; they would rather have trains use diesel than trucks. That would be a fine proposition if everybody lived right next door to a railway station, but of course not everybody in regional Australia does live next door to a railway station.The reason we have trucks in regional Australia and elsewhere is so that you can take goods from places that do not have railway stations next door to other places that do not have railway stations next door. The Democrats forget the fact that even the goods that go by rail—for example, from Brisbane to my home in Cairns—get to the railhead and then need heavy vehicles to move them from the railhead to the store, the business or whoever it is that needs them. But, of course, the Democrats have never been accused of living in the real world.This is a spurious reason—a desperate reason—the Democrats have come up with to oppose tax reform. They had already decided before this package came out, before the Senate inquiry, that they were going to oppose tax reform. Then they found that the arguments for tax reform were incredibly compelling, so they had to desperately run around trying to find some reason to oppose bringing in this tax package. Of course, the other argument we hear, not just from the Democrats but from the Labor Party, is that it is somehow iniquitous to put a GST on food, as though there is not an indirect tax on food already.I never heard, when we were in opposition and the Labor Party occupied the Treasury benches in the chamber, one member of the Labor Party oppose increases in sales tax, including that on food, which were brought in without compensation. I never once heard them oppose it. I never heard them argue that it was inequitable to put sales tax on food. I never once heard them argue that it was inequitable to put increases of sales tax on food without compensation. But, suddenly, they want to argue that indirect tax on food is wrong. Sadly, however, the experts disagreed with their point of view. For example, Professor Neil Warren, in relation to the effect of taking GST off food and whether it would be good or bad for low income earners, said:In fact, the top 20% benefit twice as much in terms of dollars and cents from zero-rating food, as does the bottom 20%.So here are these people in the Labor Party who argue against a GST on food because they think it is somehow going to advantage the poor. In fact, if you accept their argument, it advantages the rich—it does not advantage the poor at all. Angela Ryan from the Australian Society of Certified Practising Accountants said that the benefit is two to one in favour of the top 20 per cent of households versus the bottom 20 per cent of households. That is a two to one benefit.If you take the GST off food you turn gluttony into a legal form of tax avoidance. The rich, who have the disposable income, will eat their way through the tax bill. They will eat their way through avoiding tax. There is no real benefit given under that proposal to the poor. Professor Cnossen from Europe said: Research and experience in other countries proves that the best GST is a GST with a single rate applicable to all goods and services. A zero rate on food is largely ineffective in mitigating the GST burden on the poor. Zero rating food is like giving stones for bread to the poor, because they continue to pay the GST on other items of consumption. The poor are helped more effectively through changes in income-support systems and, to some extent, the income tax.Of course, that is exactly what this coalition government is doing. In all of the hearings that I attended, I never heard the opposition senators on the inquiry wanting to talk about the changes in income tax measures. I never heard them wanting to talk about the offsetting changes to direct tax—offsetting changes that they never introduced when they increased indirect tax. They never introduced changes offsetting changes in direct tax.They never wanted to talk about that because it was embarrassing for them. It was embarrassing because, no matter how they structured the modelling proposals that they put forward, the experts commissioned by the Senate select committee kept on coming up with the fact that this tax package was good. I am sure if you sat down and tried hard enough, and worked out enough outrageous and biased assumptions, you would eventually be able to find, by modelling and twisting the numbers, somebody who was worse off.It is very interesting that the opposition members and Democrat members of the committee insisted on having NATSEM do a series of 10 different simulations, 10 different assumptions, that they used to try to work out whether this tax system was good or bad. Of course, they were terribly disappointed. If you read the comments in the report, they feel almost betrayed that Professor Ann Harding and Professor Neil Warren did not agree with them—they said that some of the situations they were asked to model were unrealistic, absurd—and the palpable sense of betrayal by the Labor Party really has to be seen to be believed.Here are the facts. NATSEM examined several thousand household types in the assumptions that they were asked to model. Out of 6,090 household types that they modelled, across 10 simulations, they came up with only 85 household types, out of the 6,090, who were not beneficiaries from tax reform, and those households were exclusively in assumption sets that NATSEM said were not realistic. One of the assumptions that the Labor and Democrat senators wanted them to model was that low income households, over a long period of time, would consistently spend 20 per cent more than they earned. You cannot do it over time. It is absurd, as Professor Harding and Professor Warren said. But that does not stop the people on the other side from clinging to their prejudices.A final word should be said about the impact of tax reform on primary producers, who are the real poor in Australia because of all the tax imposts that the previous government put on top of them. Primary producers are in fact some of the big winners. The National Farmers Federation, in its submission to the committee report, outlined a summary of increases in average annual disposable income for different farming operations. This is very important.The table says—and I will be selective—that at the bottom end a small Queensland banana farm, the one that benefited least, was $1,291 better off in disposable income after this package took effect. A large New South Wales sheep grazing operation was $11,570 per year better off in disposable income. A New South Wales dryland cropping and sheep grazing operation was $15,760 better off. In my state of Queensland, a medium-sized banana farm was $10,010 better off, and a large North Queensland banana farm was $49,650 better off in disposable income. Yet the people on the other side of this chamber want to oppose these tax reforms. The people on the other side of the chamber want to deny Australians the benefits of tax reform.One of the most absurd arguments I have heard came from a friend of mine on the other side of the chamber, Senator Hogg, who complained that a middle income family with three children was only $23.94 better off in disposable income every week, after you took into consideration the benefits of the price changes. He said, `This isn't good enough.' But, when they were in government, the opposition never in their wildest dreams delivered, or even talked about delivering, tax cuts of the magnitude of $23.94 to an average, middle income family with three children.They never did it. We are doing it, and now they say it is not enough. The acolytes of Saint Augustine ought to learn a lesson after 1,500 years. I say that, instead of arguing, `Lord, give us tax reform but not quite yet,' they should say, `Lord, give us tax reform and give it to us now,' because if we accept the arguments of the opposition there will be no tax reform, there will be no benefits, and everybody in Australia will be worse off.11:01:003829Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—A GST based tax system has actually gone through the policy mill twice, in 1985 and 1993, and both times it was comprehensively rejected. In 1995, John Howard admitted that he would never contemplate a GST again. Australians have never supported a GST and they never will. At the last election, the Liberal Party received less than 49 per cent of the two-party preferred vote for the House of Representatives and, even now, polling published last week shows that 54 per cent of the electorate rejects the GST, while only 40 per cent supports this policy.So why are we here debating this stinking dead cat? We know that John Howard is awkward and uncomfortable in the international sphere. We know that he despises public health and public education—`public' anything. We know that Mr Howard wants to keep the Constitution locked in 19th century aspic and so is opposing the republic and attempting, through the tawdry exercise of attempting to write his own preamble, to throw the referendum.We know that John Howard early last year decided that he needed a plan to look like a real Prime Minister. This realisation came after he had concocted the $10 billion black hole, a shabby exercise to slash necessary services which hurt and enraged millions of Australians. After looking at the polls and finding Australians comprehensively underwhelmed by his leadership, Mr Howard decided to introduce a GST—something he said he would never, ever do.Why tax? Tax is the only area where the Prime Minister gets truly passionate. He loves fiddling with the tax system. He actually looks vaguely enthusiastic when he talks about tax. So Mr Howard and Mr Costello ran a softening-up exercise, claiming that the tax system that we have was ramshackle and falling to bits. The eminent economic modeller Professor Dixon was asked point-blank if the Treasurer was correct in claiming that the taxation system was ramshackle and falling to bits. He answered:I just hated all those adjectives, to tell you the truth. I looked at that ANTS document, looking for a substantive argument. `Ramshackle', `1930s', `Botswana'—this is not economic argument. This is just some sort of lightweight rhetoric.In evidence before the Senate select committee, Professor Dixon told the committee that you had to ask whether it was indeed worth while even bothering to convert to a GST based system. In fact, it is predicted that the budget surplus will be around $8 billion or $10 billion. And when the Treasurer stands in the House on budget night and announces the size of the surplus, ask yourself if this is the surplus of a ramshackle tax system and if this is the result of a deteriorating tax base.But the Prime Minister had decided that he was going to look like a fearless leader by advocating a new tax system. So, last August, 17 days before the election was called, he and the Treasurer released their election proposal and then proceeded to spend $20 million of public money promoting it. Mr Howard knew that to win the election he would have to engage in a spin exercise so huge and so ruthless that it would dwarf any precedents.The Prime Minister went for broke. Let me provide a few statistics. At least $8 million worth of television advertisements were shown around the country, outspending the entire annual budget of Pepsi and outspending Toyota, McDonald's and Coca-Cola combined, over a three-week period. The government ordered the printing of 50,000 copies of their glossy ANTS publication, launched with great fanfare on 13 August, and they are now in the process of pulping 42,000 copies, at great cost to the taxpayer.On the day the election was called, and on the days after, on 1, 2, and 3 September, $188,254 worth of newspaper advertising appeared in 98 regional newspapers, because cancellation requests had come too late. More than $2 million was spent on GST information call centres, which never properly worked over the 15 days of their operation. It was strange that, in the raft of government advertisements, there was never one mention of the proposed revenue raising mechanism, the GST. All that Australians saw was table after table of income tax cuts—that were not to be fully funded by the GST but largely by the existing surplus.When the ANTS package was announced on 13 August last year, there was no time for detailed debate—just a series of too-good-to-be true cameos of families and incomes. Mr Howard and Peter Costello invoked the integrity of Treasury modelling with their `no losers' claim. After all, if you cannot believe in Treasury, who can you believe in? On the Sunday program this week the Prime Minister asked Laurie Oakes, `Have you seen in your lifetime in politics, have you seen an incumbent government be so open in the detail of a major policy in an election campaign as we were last time'? What a joke. I recall that John Howard said on the record in the Sydney Morning Herald in 1987:I think part of the disillusionment of people with politicians is their dogged determination to try and have it both ways—to be a macho generalist but benignly specific.'John Howard wheeled out his macho generalist general, Mr Costello, who ignored specifics throughout the election campaign. During the campaign period any independent economic modeller who stuck their head up and got into the specifics of the tax plan, such as job losses, and dared to criticise the integrity of the package was buried in an avalanche of derision.Kim Beazley took John Howard to task. We fought the campaign mainly on tax, and Labor clawed back 20 seats—a massive comeback. The Liberals won less than 49 per cent of the two party preferred vote in the House of Representatives while, in the Senate, 61 per cent of the vote was recorded for parties which wholly or partly oppose a GST. You do not have to be a rocket scientist or even Peter Costello to work out the intention of the voting public in that electoral statistic. The electorate had applied, at minimum, an amber light to this chamber. The voters said, `Either don't pass the GST, full stop; or don't pass it in the form the government wants.'After the election John Howard went into firm denial that the Australian electorate had sent him a message, and he is still in the land of denial. He repeated the word `mandate' like some form of desperate mantra. He abused the Senate. He got people such as Senator Coonan to fly kites about Senate reform. Peter Costello abused all and sundry trying to stop a Senate committee, a committee that was always an inevitability. He said, `You don't need an inquiry. I can make available all the material that senators want. We have all the material they require.' We know the government had no material on the employment implications of a GST—they never modelled it; on household expenditure effects and the interaction with the social security system; on health outcomes of taxing food and over-the-counter medicines; on the effect of the GST and diesel price cuts on cleaner fuels and the environment. All four areas were cynically ignored.What the Treasurer was offering the Senate, prior to the committee, was cameos based on the rosiest assumptions he could come up with—a 100 per cent flowthrough of savings up the GST food chain, and a 1.9 per cent inflation effect. It was a massive cover-up from the Treasurer. What he had prepared was astonishingly inadequate for a government claiming to be intent on a renovation of the Australian tax system. Instead he used Treasury to prepare pre-election rhetoric rather than a full-scale micro and macro examination of the policy proposal.John Howard in his usual pig-headed performance on the Sunday program last weekend said that his tax package was subject to an exhaustive debate and that every opportunity was given to the people. The tax debate raged on through the election using informa tion that was at best superficial and, at worst, just plain wrong. It was up to the Senate committee to expose this deliberate and fraudulent tactic. And they did. Labor wanted a single Senate select committee to thoroughly vet the proposed tax system. We still think it would have been the best model. But we ended up with a workable committee.Let me talk about the committee process. It was a long hard slog over four months. The 1,500 or so groups and individuals who put in submissions had a very short time to do it. The Senate funded extra modelling. The discussion between senators and witnesses was also extremely informative, despite the spoiling tactics of the coalition. As evidence came out and informed participants, many changed their views. ACOSS originally came to the table arguing that food should be excluded to protect the poor. By the end of the process ACOSS had shown that 990,000 families and their two million children will be worse off with the GST. Even on the last day Professor Harding changed her view after hearing new evidence from Treasury about the integrity of the compensation measures.Thanks to the Senate, the public has a better understanding of what Mr Howard is contemplating. This is the parliamentary process at work exposing the hype and the lies that Mr Howard and Mr Costello had presented to the public over their 17 days of taxpayer funded gloss—or to quote one modeller, Professor Dixon, their `lightweight rhetoric' and, as the father of Fightback, Dr Hewson, referred to it, `the Goebbels chant of "There will be no losers".'It is a great pity that the committees had not gone to work prior to the 1998 election on these issues. But I believe we have a situation where the opposition has more than caught up with the government on the realities of a GST. And we have certainly caught the government out. When Mr Howard, on the Sunday program, said of pensioner compensation, `That is a promise we made in the election campaign, and that is being honoured in full, and nothing that Harding, or Warren, or Hewson or anybody else has said has blown a hole in it,' Laurie Oakes replied, `Well, I think the rest of the world would disagree with you, Mr Howard.'So what about these promises? Let us look at John Howard's ambit claim and what the Senate committees discovered. Launching the new tax system on 13 August 1998, John Howard said:It will boost growth. It will boost jobs. It will improve fairness. It will create greater incentive. It will improve the business climate. It will reduce the operating costs for business in country Australia. It will simplify and make more humane and sensitive the interaction between the tax system and social security system.There were seven promises in a couple of sentences. After the Senate committee hearings it is obvious that not one of those promises stacks up. Not one. All of those promises are rotten-to-the-core, non-core promises. Treasury admitted that the government's claims on growth were simply an assumption. Most modellers, who do not take the rosy assumptions which were imposed on Treasury by Peter Costello, state that either there will be little change in the employment levels or, at worst, almost 120,000 people, mostly in the service industry, will lose their jobs as inflation pushes a new round of wage demands and as employers fail to pass the savings up the GST food chain. Only the government believes there would be an immediate 100 per cent passing on of savings. Not one other pro-GST or anti-GST advocate could swallow that assumption.The Prime Minister has never explained how a GST will create greater incentive—after all, it is a tax on everything. The new compliance cost to small and medium sized businesses is estimated to be $7,000 and most will have to employ accountants to keep track of their tax payments and claims—to fiddle with inputs, exemptions and the various categories of taxed and non-taxed items from now until forever.As for John Howard's claim that the new tax system is more humane, it is just plain wrong. More importantly, it is deliberately deceptive. It is the central deceit in the whole GST debate. There is no doubt that the poor will lose and that is one of the main reasons why Labor is implacably opposed to this tax.Mr Howard said of his cameos, `These figures have not been dreamt up in the Prime Minister's office. They have been run through the rigour of Treasury cynicism when it comes to figures.' Mr Costello said at the Press Club that there had been `lots of modelling' done on the tax system. When, finally, realistic assumptions were examined, Professor Ann Harding told the ABC last week:What the modelling by Professor Warren and myself and others on the NATSEM team showed was that the package, as structured, is not very fair.This is what one of the architects of Fightback, the much quoted Professor Neil Warren, said in the Financial Review last Tuesday:The Government's compensation package is not adequate . . . those groups who are neither taxpayers or welfare recipients are largely forgotten in ANTS . . . and thirdly, the compensation package, while it might appear to work in the short term, will fail in the long term.This is the result of proper, independent modelling with realistic assumptions on the effects of the GST as they flow through the economy.Labor's greatest concern has always been for those on low incomes. People on fixed and low incomes will come off second best if these bills are passed by the Senate. As I have already said, the Warren-Harding team has stated that there will be losers—and the losers will multiply into the future. Even Treasury admitted, in the final phase of the Senate hearings, that the compensation promised by the Howard government would evaporate. This surprise admission brought Professor Harding back to the witness table saying that she would have to review whether food should be left in the GST framework.Labor has never believed the government's claims about this tax. We knew from the experience of 1985 and 1993 that it was fundamentally unfair. In the last six months, we have seen the best of politics and the worst. We have had a sleazy election strategy from the coalition—a sleazy and deceitful strategy in that campaign—contrasted with the Senate buckling down and getting on with the job of what the electorate expects of it: a thorough examination of this GST legislation.We have seen the grand plan concocted by Mr Howard unravel before his eyes as the flaws in this legislation and the GST have been exposed. The ANTS package is a bit like the Titanic—this huge vessel that might look okay but they have covered up the fact that they have skimped on the lifeboats. What happens when we hit the first economic iceberg? The rich on the top decks will probably be okay, but the steerage passengers are going to drown.If this GST is passed by the Senate, it will change the equities in our tax system forever. It will be a cruel blow to those on low incomes, to pensioners, to veterans, to self-funded retirees, to people who work hard in charities, and to Australian families in general.You only have to look at the graph on page 29 of the Auditor-General's report into the tax advertising campaign to understand that, if the Senate passes this legislation, it will in fact be condoning the most cynical political manoeuvrings that this nation has ever seen—that we have ever had the misfortune to experience.In the end, what the government is forcing on Australia is just plain unfair. The means it has employed to get to this point have been absolutely fraudulent from the start. The GST must be voted down. Labor will do all that it can through this debate—the second reading debate and the committee stage debate—to ensure that the GST is defeated in the Senate.11:21:003832Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—I am pleased to rise to speak to A New Tax System (Goods and Services Tax) Bill. I also say `Hear, hear!' to everything my colleague Senator Faulkner has just put on the record. We are debating today a package of 27 bills. I am advised that this is the first time that anything like that number of bills have been put up for cognate debate. It is important for us to remind ourselves what this means. What it means is that this is an absolutely massive change and people are being asked to vote on it.One of the things that we found out very clearly during the inquiry of the Community Affairs References Committee was that people did not know what was in one bill, let alone 27 bills. They did not know how those 27 bills might affect one another. Was something in one bill going to have a side effect on another bill? The legislation is extraordinarily complex. Our inquiry was told quite often that some of the legislation is not even currently available to us. We heard, `Oh, well, if that's not on the list, it's open to the minister—as it says in the legislation—to include that on a list of delegated legislation, for example, or regulations that might be raised to include further things.'I have heard my honourable colleagues opposite in government, when in opposition, raging in this place about having to make a decision when they did not have the legislation in front of them. That is the case here. A lot of the delegated legislation has simply not been drawn up. I have said in this place before that it is not a good argument to say, `Well, you were bad, therefore, we can be bad.' I do not agree with that logic at all, but the point was well made then, and it is certainly well made again, that if we do not even have the full legislation, how can the Senate, let alone the community, fairly decide on this legislation?This legislation is claimed by the government to have been supported by a mandate at the last election. Any number of people have pointed out that it was not a mandate. Something like nearly 52 per cent of Australians voted against the government and voted against the GST. Recent polling shows that that number is rising rapidly, as the Senate committee's evidence is now available in the community and more and more people are understanding exactly what this package of bills means.`It is simple', says the Treasurer. That is absolutely untrue. This is an extremely complex piece of legislation. It will be very complex for everybody having to live with it—from small business to charities to individuals. It is supposed to be easy to follow. Indeed, it is not. It is contradictory. I will come back to examples of that shortly. Most importantly, for Labor Party people and for thousands of citizens, it is unfair. This is an unjust piece of legislation. I would ask why anybody would introduce a new tax regula tion, a new tax program, that is going to make two million to four million people worse off. Why would you do it? That is what the government is doing and that is what the government knows it is doing.5K4FAULKNER Senator Faulkner—They don't care about them.ZF4Crowley, Sen RosemarySenator CROWLEY—I think it is more than that, Senator. They passionately believe in the 19th century robber baron Tory kind of approach to the world—fix the top of the town and, by trickle down effect, the poor shall be looked after. This legislation actually has a trickle up effect. The poor people will pay for the tax cuts for the top end of town. That is what this legislation is about. If you are on $75,000, you will get over $80 a week in tax cuts. If you are on a single pension, you will get $2.89 compensation. Where is the fairness in that? There is none.I have to worry about the government and what is in the government's mind when it could possibly introduce such a totally unfair, unjust package of bills. But let us say, as the government claims, that no-one will be worse off, which I flatly deny—as Senator Faulkner and other colleagues have spelt out, all the evidence shows that that is simply not the case—even then, what this package of bills does is make the people at the top end of town very well off and the people at the bottom end of town no better off, on Mr Costello's script. Why would you introduce legislation that is going to shift the tax benefits massively to the top end of town?5K4FAULKNER Senator Faulkner—Because that's what they care about.ZF4Crowley, Sen RosemarySenator CROWLEY—Exactly, Senator. They are the people they care about. They do not care to make legislation that will make this fair for all the citizens in this country. Indeed, their claim that people will be no worse off is absolutely wrong. That has been proven beyond any disagreement. In fact, Mr Howard has finally, grudgingly, admitted that that is probably the case.H15CAMPBELLSenator Ian Campbell—Did you back option C?ZF4Crowley, Sen RosemarySenator CROWLEY—What this government in this package of legislation says is that it is going to introduce tax reforms that will dramatically improve the benefits at the top end of town and make at least two to four million people—Senator Ian Campbell interjecting—ZF4Crowley, Sen RosemarySenator CROWLEY—That is unparliamentary, Senator Campbell, and I would be pleased if you would withdraw it.H15CAMPBELLSenator Ian Campbell—You heard that, did you?ZF4Crowley, Sen RosemarySenator CROWLEY—Yes, I did, and I am ignoring the rest of your rotten contribution.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Reynolds)—Order!H15CAMPBELLSenator Ian Campbell—I withdraw, Madam Acting Deputy President—ZF4Crowley, Sen RosemarySenator CROWLEY—Thank you very much. Sit down and be quiet.H15CAMPBELLSenator Ian Campbell—I withdraw my reference to whether she supported Mr Keating's option C.ZF4Crowley, Sen RosemarySenator CROWLEY—Madam Acting Deputy President, I would like to proceed and—H15CAMPBELLSenator Ian Campbell—Madam Acting Deputy President, do you want me to withdraw?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Yes.H15CAMPBELLSenator Ian Campbell—Will the honourable senator be resuming her seat?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I am sorry, Senator Crowley, could you resume your seat while the parliamentary secretary withdraws the statement.H15CAMPBELLSenator Ian Campbell—Madam Acting Deputy President, I withdraw the statement seeking from Senator Crowley an answer as to whether she supported Mr Keating's option C tax package and the fact that she is a hypocrite.ZF4Crowley, Sen RosemarySenator CROWLEY—Touchy, aren't they? They are very touchy. The minute the truth lands they have to start slimy little tactics to try to put us off our game. We will not be put off because we know, on all the evidence of this Senate inquiry of four committees, which you ducked and twisted and tried not to have, that it is beyond doubt that this legislation is unjust and unfair. It is complex and contradictory. For example, in our area—the health and social security areas—we were told by those departments that neither department had had any contribution into the modelling and planning by Treasury. What this means is that you get some of the best examples of stupid contradiction.Apart from the injustice, which I will come back to, you get some shocking examples of how this legislation is really contradictory. For example, the government has a policy of promoting a reduction in the number of people getting skin cancer. So why would you put a GST on sunscreens? It has a policy that says it will help people give up smoking. So why would you put a GST on the lower cost Nicorettes and stop-smoking medications? Because, in fact, the left hand has not been aware of what the right hand has been doing. The government has introduced any number of examples of that kind of policy contradiction—very simple, very basic, very bad legislation. That is one of the problems we have here. It was not until our committees actually had the opportunity to look at the detail of the many bills that we finally began to understand just how bad this package is.I come back to the claim that the government says that it has a mandate because everybody knew all about this legislation before it went to the election. Well that is absolutely not true, on the government's own words. The first thing it did after it came to government was to establish the Voss committee to have a look at the impact on health, pharmaceuticals, aged care and the charities, for example. The committee had something like two or three weeks in which to do all of this and they simply could not do it in that time.But the changes proposed by Voss, which the government says—without shame—it accepted, mean that the legislation the people debated in the run-up to the election simply is not the bills that we are now getting. The government has already changed its mind on this legislation as it has become aware of the more ridiculous discrepancies and contradic tions within its own legislation. You would have thought that the government, if it was serious about this legislation package, might have welcomed any number of examples of contradictions and difficulties thrown up in our committees of inquiry, and that it would have been pleased to accept an amendment to the legislation.One I would urge the government to look at was brought to our attention by OPSM in its evidence before our committee. It pointed out that the legislation says that prescription lenses will be GST exempt but spectacles with prescription lenses will have a GST. It took me a while to understand what that meant, but in the second sentence `spectacles' actually means `frames'. You would think it might have said that.It is a small example but it is a very illustrative example of how this legislation has not got it right. What that means actually is that prescription lenses for glasses will be GST exempt and will have a GST! The courts have found that `spectacles' actually include frames and lenses and, therefore, by their own previous understanding and decisions, spectacles—that is the prescription lenses—will be GST exempt and will have a GST. That is totally contradictory, in its own legislation. You would think the government might say, `Woops, we had better amend that piece of legislation.' If it stays in, then the farce means that the government is legislating for more work for accountants and lawyers on the decisions of this legislation. It is just a small example, but one that I think illustrates very well the difficulties that you would think the government might be pleased to accept.We had some other shocking examples. Many of the people in our committee had to cop a fair amount of cynical criticism about whether or not they had read the bill and whether they understood it. Most citizens do not read bills. Most citizens read what is explained to them is in the legislation—what the legislation is about and not what is the detail and the devil in the detail. That is I think a very reasonable and accurate assessment. The citizens expect that parliamentarians and governments will explain the legislation in detail, not as the government has done in this case with a smokescreen, and not as it has done in this case by putting out documents that show everybody will be better off until the committee points out that in fact the people will not be better off. But most people do not look at the detail of legislation and I do not believe that they should be abused or criticised when they come before a committee and say, `Well no, we have not read it.'Finally, another point that I think is very important about this mandate is: why would you say the government could be assured that it has a mandate for this legislation, when Senator Knowles and the minority report of our committee spent most of the time explaining how people did not understand the legislation? Quite so, Senator. That is exactly what this committee did. It enabled people for the first time to learn what this package is about. If you have to explain to people what the legislation is about then you cannot at the same time claim that you have a mandate for that legislation, because a mandate means people know what it is that they have been voting for. They clearly do not. And the more the inquiry went on, the more there were the contradictions and confusions that I have alluded to.Another important point is that when the message of the people was very clear you would get some very interesting little discussions in our committee. For example, I believe it was the Housewives Association who came before our hearing in Tasmania. The Liberal government was represented at that hearing by Senator Abetz. These women said, `Senator Abetz, do you represent the people of Tasmania?' He said, `Absolutely, yes.' They said, `Well then, are you aware that the people of Tasmania voted overwhelmingly to oppose the GST? There is not a federal Liberal member left in the state of Tasmania. If you went to the declaration of the poll for Mr Smith in Bass, you would have heard him say, ``This is the second time I have lost my seat to the GST."'That is what the evidence was before our committee when Senator Abetz was asked whether he would represent this view and vote against the GST. He said, `Sometimes we have to vote for the greater good of the country.' I am quite sure that Senator Abetz will not like me to remember that quote when he actually gets up on states' rights or some other issues. If he were serious he would have taken the argument to the government in his own party room meetings and said, `Tasmania is adamant. They are very, very opposed to the GST.' And so they should be because, as our committee found out, the cost of food, which is already much higher in Tasmania, will be much worse under the GST. As for the jobs that are supposed to be promised to Tasmania, there are now estimated to be at least 1,000 that will be gone under the GST.The Tasmanian Housewives Association could read the play very well. Their challenge to their Liberal colleagues in the Senate is, I think, a very fair challenge: will you or will you not take what the people of Tasmania have said, and that is, understand exactly the mandate from the people of Tasmania to oppose the GST and this package of legislation?The point that I now want to move to is about charities. This is the first time ever that the charities in this country will actually be `enjoying' a tax, as the saying goes. They came before the committee and were loud in their unhappiness about the GST, first of all because they know what the impact will be on the people they care for. St Vincent de Paul pointed out to us that, over the last three years, there has been a 16 per cent cut in government funding for their organisation and at the same time a 30 per cent increase in the number of people asking for assistance in the whole variety of ways that they help people.They also now know that, because of the changes in this package of 27 bills, the charities will have to, for the first time ever, keep records and pay back tax on items for which they will have to pay tax. The so-called compliance costs will be very expensive for them. They are also going to appreciate that they will have to pay a GST on some of the things they do—for example, for any of the clothes that are sent off to be made into rags. Essentially, this means that the fundraising by St Vincent de Paul, and by all other charities, will not go as far because of the tax burden they will have for the first time ever. The compliance costs and the GST they will have to pay on some of their fundraising mean that they will now have even fewer precious dollars to assist the people who are going to be so badly hit by the impact of this legislation.Life is not easy on the bottom end of the income scale in this country. Low income families, pensioners and so on will be worse off under this legislation—they will have fewer services to assist them; they will have a greater need to call on charities and the charities will be hit for six with changes in the tax legislation that, for the first time ever, imposes a taxation effect on them.It is an extraordinary situation. The Vos report actually said that, essentially, charities had to appreciate that they would need to come under competition policy and that in many areas, if they were doing the same thing as commercial non-charitable organisations, they must just compete on the same kinds of grounds. That has never been the understanding in this country of what charities are about, and I am quite sure that the growing antagonism to this government and its legislation from all those charitable and not-for-profit organisations will only continue.The day our report was released, a very large number of organisations were also in Canberra making a statement totally opposed to the GST, particularly in the light of what they had discovered in preparing their submissions for our committee of inquiry and bringing forward that evidence and defending it. They are now wholeheartedly opposed to the GST, as are many not-for-profit organisations in our community—like the surf lifesavers, the Boy Scouts, the Girl Guides, the St John Ambulance, and so on—who, for the first time, are going to be much worse off. Lest anybody should think that these people got it wrong or misread the legislation, the scouting organisation told us that they had had Treasury advice on which they had made their submission. As to the understanding that bob-a-job would have a GST applied, Treasury has since said, or at least Senator Kemp has since said, `No, we never meant that; that won't continue to happen.' But the Scouts have not been given an absolutely clear understanding that the bob-a-job GST is gone, nor is there a clear understanding as to whether the GST will apply to the sale of Girl Guide biscuits or the lamingtons at the Anglicare street stalls. You could almost say that all of these things make a farce of what this legislation is about.Most importantly, on the evidence before the committee, on everything I can read and understand, I oppose this legislation because it will divide Australia into the haves and the have-nots and it will enshrine that division forever in law. The top end of town will get generous tax cuts and low income families will have paltry compensation at the very best—but most of them will be worse off. It is a trickle up effect—the poor shall pay for the tax cuts for the rich. (Time expired)11:42:003837Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—I rise to speak on A New Tax System (Goods and Services Tax) Bill 1998 and the 26 other pieces of legislation that go with it to make up the overall new tax system the government is proposing. I speak as the Australian Democrats representative on the Senate Community Affairs Committee that looked at a number of aspects and potential implications of those various bills—a committee that was chaired by Senator Crowley, the previous speaker.We had the spectacle of the Prime Minister on the Sunday program at the weekend doing a fairly poor job of defending what I guess is the indefensible, so it is not surprising he did a fairly poor job, but he nonetheless continued to insist that any changes to this package would simply be a matter of finetuning. Certainly in my view, and in the view of the Democrats, this package does not need finetuning—it needs a comprehensive and major overhaul.Many issues arose, even within the limited terms of reference that the Community Affairs Committee was looking at, that I believe need significant attention. I will address a couple of those in my contribution today, mainly the issues of health and housing. The committee also looked at what has been called the charitable or non-profit or community sector. I will not speak long on that because my colleague Senator Bourne addressed that in some detail in her contribution last night.But it is worth emphasising again, firstly, how huge that sector is and what a major component of the Australian economy it actually is. It is not just a few quaint little charities off on the side; it is a massive component of our overall economy, such that if it is damaged—as the tax package as it stands at the moment will undoubtedly do—it will have significant economic effects on Australia, as well as obviously impacting in a very negative way on the enormous number of varied and important services and contributions to the community that the non-profit sector makes.Indeed, there has been a lot of attention paid to date to the views that the Democrats, ACOSS and many other community organisations have about this package that are focused on the unfairness of taxing food and the need to exempt that. That is certainly something that I strongly support.In my view, if the impact of this legislation on the charitable or non-profit sector were not addressed, it would be an issue of equal gravity and equal seriousness. This is something the Democrats have outlined in our responses to the government's various versions of their tax proposals, both before the election and after. But it certainly has not got the attention that the issue of food has got, perhaps because food is a little bit easier to understand—you either tax it or you don't.The wide-ranging impact on the non-profit sector is something that I do not think is widely understood by the Australian community. It is much more complicated. It does impact in a much wider range of ways and it is still shadowed by uncertainty. As Senator Crowley just outlined, in the Senate committee process it was very difficult to get a clear indication from the government and from government departments about how various aspects of the package would operate in relation to some of the activities of non-profit organisations. Obviously that makes it very difficult to ascertain what the impact is likely to be.I try to have as much contact as possible with the non-profit sector of the community and the economy, because I believe that its role needs to be promoted and supported wherever possible. There is clearly still a large degree of confusion and uncertainty out in the community about the impact of various aspects of this tax package on that sector. That is not just a matter of that sector being less clever than the rest of us, not actually having been able to read the legislation or not having got the right briefing from Treasury or whatever; it is often a factor that it is not possible to get the information, or the information it gets is conflicting, or the operation of the package in the specific circumstances is unclear. When we as a parliament examine proposed legislation put forward by the government, we are actually not able to get full details on how something is going to operate, let alone full details from Treasury or anywhere else within the government about their projections of what the impact is going to be. I will speak on that issue a bit further.The Democrats strongly support the principle that health should be GST free and we do welcome the government's enunciation of that principle. A lot of hoo-ha goes around the place about how the whole integrity of the system would collapse if food were exempted: `It is too hard, you can't draw the line, compliance costs would go through the roof,' et cetera. With all those sorts of arguments being put forward by the government, it is worth emphasising that most countries in the world seem to manage to do it without too much hassle. Nonetheless, the government has recognised the principle of exempting health services from the GST. For some reason or other, there does not seem to be a problem there with drawing lines or with compliance costs, et cetera; it is only when you try to exempt food that there is a problem.Taxing health services and products creates a disincentive for people to seek health care and results in a sicker and less productive society. In other words, it is counterproductive to tax health services. In addition to supporting this principle, the Democrats believe that the definition of health which the government has put forward is not broad enough. It does need to be broad enough to include a wider range of products and ser vices—again, to ensure that there is a basic principle of not having a counterproductive measure that actually discourages people from seeking health care and that discourages people from undertaking measures that prevent them from getting sick. Anything that does that is something that is obviously counterproductive. Apart from being undesirable because people get sicker, it would put a greater economic burden on the country and on taxpayers' money. Therefore, even from that basic economic principle, it is counterproductive and false economy.The Democrats believe that the current exemptions provided in the legislation for health products and services are too restrictive. Contrary to the government's stated intention of making health GST free, the legislation as it stands would place a GST on a range of commonly used health products and services. The Democrats believe that this would discriminate against people who access these products and services and in particular impact on people with a chronic illness or disability, older Australians and particularly those who seek their health care and have their health needs met by measures outside the mainstream health system. Therefore, the Democrats will be moving a number of amendments to these bills in the committee stage to ensure that the GST does not increase the cost of health services and products to those who are already disadvantaged.The Democrats believe that all products approved by the government as therapeutic goods should be GST free. Currently these products are all sales tax exempt, so introducing differential tax treatments within this sector, as these bills propose to do, would create pricing inconsistencies and market distortions. It would also impose an additional cost burden on specific disadvantaged population groups such as people with chronic illnesses.During the inquiry of the Senate Community Affairs Committee, evidence was provided that high level users of over-the-counter medicines would be significantly disadvantaged by the tax package as it stands. Evidence was provided not by the government, who did not seem to have looked into that matter, but by the community sector which, as I have already said, plays a valuable role and is also massively underresourced. It is a great shame—indeed, a disgrace—that the Senate and the parliament need to rely on information from the community sector that they cannot get from the government. Not only that but they cannot get responses to information that the community sector puts forward.I was very concerned to hear evidence provided to the committee that, to many of those people who are already struggling to meet their health care costs, even a small increase in the cost of pharmaceuticals can make the difference between their being able to afford all the medication or health treatment they need and having to choose which medicines are more important. I am also concerned that the government have not produced any data on the different consumption patterns of specific population groups who are high level users of medicinal products. We have the widespread refrain from the government that no-one will be worse off under a GST, but without accurate data I am at a loss to see how the government can make these claims when they cannot assess the impact of a GST on these population groups.The evidence provided to the committee was that there is an increasing trend for consumers to self-medicate and use over-the-counter medicines for the management of common health problems. Many popular medicines such as Panadol, Codral and Mylanta will incur a GST under the legislation. Medicines such as these are used very frequently by people on low incomes, the chronically ill and the elderly.Evidence was provided to the committee of the problems that the differential tax treatment would cause in a number of areas. For example, having different rates of a GST on different pack sizes of the same product has the potential to create confusion for consumers and to induce behaviours contrary to achieving quality use of medicines and optimum health outcomes—all this from a tax system that is supposedly meant to make things simpler. There is also the potential for people to seek medicines on prescription to avoid the GST. Clearly that would not be cost effective—another counterproductive measure—in that it would result in an additional cost to another part of the health system.Another difficulty in trying to tax medicines at different rates is in distinguishing between those that do incur a GST and those that do not. The government's use of the system for the uniform scheduling of drugs and poisons for the purposes of a differential taxation treatment is, in the Democrats' view, clearly inappropriate. The National Drugs and Poisons Scheduling Committee is not a Commonwealth committee and therefore the Commonwealth has limited input into scheduling decisions. Which drugs get placed on which schedule is usually based on health related matters but now will have significant tax treatment consequences depending on whereabouts in a schedule a drug is put. The decision about what goes into what schedule is the responsibility of state and territorial governments, because the Commonwealth does not have constitutional authority to control prices at the point of sale. Therefore, there is considerable potential, given that the state and territory governments are the recipients of the GST pool of funds, for these scheduling decisions to be influenced by the revenue considerations of the states. The Democrats will not be supporting a GST on over-the-counter medicines.In terms of the issue of complementary medicines, often referred to as alternative medicines, the Democrats believe that complementary medicine is an integral part of Australia's health system, helping consumers to remain healthy or avoid further illness and thus saving costs elsewhere in the health budget. It is important to emphasise the point that it is saving costs elsewhere in the health budget, and to put in place a mechanism that actually discourages people from using health services, particularly ones that are preventive, is obviously economically counterproductive and is likely to cost money. These different concerns that the Democrats raise are not all simply a matter of, `We can't do that because it is too expensive.' Many of these concerns that we have will actually not involve costs to the budget bottom line, and I would suggest that in many cases such as these they may produce a saving once you look at the flow-on effects throughout the whole system.The Democrats support the right of Australians to choose complementary medicine or alternative therapies and recognise that already consumers of complementary medicine rarely receive any government subsidies for these products and services. People using complementary medicine should not face a further financial burden and a further disadvantage because they choose a different mode of health care, and clearly a mode of health care that people believe, through their own choice, through their own experience, suits them and works for them. I have to declare an interest, or perhaps a non-interest, and say that it is actually an area of health care that I do not engage in myself. I am a conservative person in that regard and stick to the humble traditional GP, but I know many people who are not so fussed on that approach and do feel that their health care needs are much more adequately met by the use of complementary medicines and health practitioners.There is a range of anomalies in the government's tax package with regard to complementary medicine. For example, if a complementary medicine service is provided by a hospital or a doctor, it will be GST free. However, when it is supplied by a complementary medicine practitioner, who is also likely to be more highly trained and experienced in that area, it will incur a GST. Acupuncture is a good example. You are left with the situation where if someone goes to a professional specialist acupuncturist who is highly trained in that specific area of health treatment it will incur a GST. If they go to a GP who, whilst no doubt highly competent, is most likely to have received little training in acupuncture, and get that acupuncture treatment from the GP, it will be GST free. That is clearly unfair discrimination.The committee heard evidence that people may decide to go to bulkbilling doctors instead of natural therapists in order to receive a GST-free service and in many cases a heavily subsidised service, a service that they can also claim back on Medicare. This would represent an increase in the costs of Medicare, again affecting the budget bottom line, and would not result in an optimum use of health resources. The government's plan to impose a GST on complementary medicine is discriminatory and contradictory. It would inappropriately discriminate between doctors and natural therapists and also would discriminate in favour of that group of doctors who perform or prescribe complementary medicine and can claim Medicare benefits as ordinary consultations.It is important to remember that some complementary medicine, again using the example of acupuncture, are more commonly used than many of the health services specified by the government as GST free. The Senate committee was provided with evidence that acupuncture has been widely accepted as a mainstream health service, with rebates being paid by all but one national health insurer for acupuncture services. Of course, a number of health insurers also rebate for other complementary medicine services, such as Chinese herbal medicine. The government, on the contrary, has not provided any evidence to support a GST on complementary medicine.I believe the Democrats approached this committee process with a much more open mind than any of the other parties participating in the process and were willing to consider the evidence, particularly on some of these areas which were not up in the high echelons of public attention such as exempting food, et cetera. Some of this finer detail, though it is in a smaller area, can have a major impact on a large group of people, both individual consumers and in terms of businesses, professions and practitioners. We were willing to listen to that evidence. We got stacks of it from the community and we got virtually none in response from the government. That is something I found very disappointing, and it makes it very hard to do anything other than recognise the validity of the claims and arguments put forward by the community, through this one mechanism for them to have proper input, if the government do not provide any counter-response or any information to explain why they are doing what they are doing other than just saying, `It was in the tax package, we are in government, so you have got to get out of the way and let us do what we want to do.' I am sorry, but the parliament is here for a reason, and it is to look at the legislation the government puts forward, and that is what we are doing.The Democrats recognise diversity in health care and respect the right of people to choose from a range of different health care options for themselves and their families. We do not believe that people should be penalised for choosing health care outside of the mainstream Western medical model. We therefore do not support a GST on complementary medical services or products.Due to time constraints, at this stage of the debate I will not be able to go into much detail about the issue of housing, despite the fact that housing is indeed another major component that is obviously as significant in people's ability to survive as the affordability of food. In the brief time that I have left, I would point out that again we have an area where there has been virtually no work done by the government at all on the impact on the private rental market, an area that provides housing for about a quarter of the Australian population.We had the blanket statement that Treasury modelling says that the cost of buying a house will go up 2.3 per cent and therefore the cost of all private rentals across the country will also go up uniformly by 2.3 per cent—a farcical statement. The private rental market is a completely different market and anyone who gives even a cursory glance at it would realise that it varies enormously between the city and different parts of regional Australia and even within different parts of individual cities. There are major differences in the operation of the private rental market. To suggest that there will be some nice uniform rise in exact proportion to the rise in housing prices is just ridiculous and it clearly shows the inadequacy of the government's modelling in that regard.There is a major issue in the loss of compensation for people who are recipients of public and community housing, who are having the value of their compensation re duced. Their pensions will go up by a certain amount, but 20 to 25 per cent of that will immediately be lost by an increase in their rent. There are issues in relation to the operation of the Commonwealth-State Housing Agreement as well which, hopefully, I will be able to talk about further when that issue comes up in the committee stage of the debate. I simply conclude by indicating that housing is another area that does need further examination. There are some potential major impacts on the community that have not been adequately addressed as part of this package and I am sure we will be giving them further scrutiny at a later stage.12:02:003841West, Sen SueSenator WEST1X4NSWALP00—Today we are debating 27 pieces of legislation that relate to the introduction of a new tax system, commonly known as the goods and services tax. It is a pity that people did not actually ask what the precise details were of all of the 27 pieces of legislation, because there are a couple in there that have some nasty stings in the tail. To start with, I want to talk about the four that relate to the wine equalisation tax. This is a very important issue for a number of rural and regional areas in Australia, particularly in New South Wales.The wine equalisation tax follows the decision by this government to actually tax wine at an ad valorem rate rather than at a per volume rate. This has raised a number of extreme concerns amongst people in the industry, particularly when it is remembered that there are about 1,000 wineries in Australia and that 80 per cent of those rely extensively on cellar door sales. Therefore they are relying upon the ad valorem, not the volume. Five hundred and fifty wineries crush less than 50 tonnes of grapes per year. One tonne of grapes produces about 60 cases of wine—that is around 700 bottles—so 50 tonnes would produce 2,500 to 3,000 cases of wine.The wine industry transforms $830 million worth of grapes at the farm gate into $2.3 billion in wholesale value and greater than $4 billion in retail sales. This final product is therefore between five and seven times its farm gate value. Australia-wide cellar door sales account for about $216 million annually and for many smaller wineries provide over half of their income. If people want to question where I get these figures from, I suggest they look at page 38 of the Winemakers Federation of Australia submission to the Senate select committee; they are there.The other thing with wineries in regional areas is that the visits, the tours and the tastings are becoming not just a very important part of the industry but a very important part of the whole region. If you go and look at the Mudgee region, it is set up not just for the cellar door tastings; the whole of the community—the whole of the region—is gearing itself to the tourism that hangs off that particular activity. People just do not come to the area, go to a cellar door and have some tastings; they stay overnight, they have accommodation, they eat in the town, they buy memorabilia and they buy goods and services in the town.We know that the tourism industry has concerns about the impact of the GST upon their industry, but when you add that to this impact upon the small grape growers you have some real concerns, and they are something that this government obviously appears not to care about or to be doing anything about. The debate about whether the tax should be ad valorem or by volume is one that needs to be had. It needs to be had up-front and publicly. The general public and the wine industry need to be able to publicly—and with care and consideration—discuss and debate the issue. But this particular piece of legislation has been caught up in the GST and it is sliding through without any great understanding, I would suggest, by the industry of what precisely is being planned.That certainly is the case because I know, from having an office in Orange and living in Bathurst where the cool climate wines are now beginning to become very popular and a significant part of the industry, that the people there are concerned but are not quite sure what the impact is going to be. Nobody has actually gone out and spoken to them. We had the advertising campaign during the election and we had the 1800 or 13 numbers or whatever they were that people could ring to ask questions about how they were going to be impacted upon, but nobody specifically went and canvassed and discussed in a constructive manner with these industries what it meant for them. Certainly their peak bodies are now very concerned and are writing to us on many occasions to express their concerns. The Labor Party is concerned. In the lower house we moved amendments to try and at least alleviate some of the problems and concerns of the smaller wine growers, because we do not want to put those people out of business. Their business is too important to our regions.The regions of Australia have suffered enough at the hands of this government. This government seems to not care a great deal about regional and rural Australia because it keeps on reducing the services available there. If this legislation is allowed to go through, the government will be unleashing another attack upon a very important and growing industry in the regional sector. It is an industry of which Australians are justifiably very proud. It is one of our best export earners, and increasingly so. Why attack this industry at this particular stage?For wineries to be able to export, they first of all have to build up to be large enough. But, as I have said, for some of the smaller ones there is no way in the foreseeable future that they will be an export business. Some of them are producing just for specialised restaurants. They have a niche. The Deputy Prime Minister is exhorting people to find themselves a niche market, and they have found a niche market. Because this tax will be ad valorem, these people will be penalised, and penalised quite severely.This tax, and these tax reforms, take my mind back about 20 years. I was discussing this with one of my colleagues, and I cannot remember whether it was in the 1979 budget or the 1980 budget that the then government—these people who are now in government—wanted to impose a sales tax upon food, clothes, a number of tools of trade and books. As a candidate for a lower house seat, I can remember campaigning very strongly then against that piece of legislation. My attitude in the last 20 years to imposing a tax on food, a tax on clothing and a tax on books has not changed. To attack the essentials of life I think is obscene. I do not have to think a second time about this.I have had concerns about and have been opposing these moves for 20 years. While ever this government continues down this path I will continue to express my opinion, because when you start to tamper with tax and make it more expensive for people on low incomes and easier for those of us on high incomes we are abrogating our responsibilities. I think it is immoral. I was reminded of this when I read a document, Commonwealth: applying Catholic social principles to public policy this morning from the Catholic Social Welfare Commission. At the top of the document there is a quote from Gaudium et spes, n64, which says:. . . economic activity is to be carried out according to its own methods and laws but within the limits of morality . . .It is very true. These pieces of legislation impose a burden upon those who are less well off that it does not impose upon those who are wealthy.Let us start with the tax cuts that the government is offering as compensation to those people who are employed. As a single person, I want to look at the cameos that are set out from page 178 onwards in Tax reform: not a new tax, a new tax system, circulated in August 1998. Let us look at how tax cuts and changes to benefits will affect me. A single person who is on $25,000 income will get cuts in their personal income tax—and therefore a percentage increase in their family benefits—of $12.31. A single person on a backbencher's wage—whether they be in a state parliament or the federal parliament—will get a tax cut of $85.77. My only dependant is my dog. My dog and I do not need $85.77 extra a week.LI4PATTERSONSenator Patterson—How much wholesale sales tax do you pay on dog food?1X4West, Sen SueSenator WEST—My dog eats fresh meat and fresh food, so he does not pay any sales tax.2L6BISHOPSenator Mark Bishop—He eats leftovers.1X4West, Sen SueSenator WEST—That is right. Because he goes to a kennel, which is a service that I am buying, there will be a tax on that, so my dog's kennel charges will go up but I wager that they will not go up by $85.77 a week. If I were earning $25,000 a year, I would receive only $12.31 extra a week, and that probably would be what the additional cost of boarding my dog would be.This government does not care. Let us also look at somebody who is a sole parent with a dependent child under the age of five years—someone in my situation as a widow and who has a child under five years. If they were on an income of $20,000 a year, they would get less money—$7.74 less a week. But going back to the person earning $25,000—a single person with one child—they will get $3.08 per week extra. But our backbencher, also a single parent with one child, will get $112.05. Let us look at the position of a sole parent with two dependent children, one under five years of age. On $20,000 a year they will get $4.09 a week less than what they get now, unless there is a mistake in the figures the Treasurer has given us. On $25,000 a year income, they will get $4.24 a week extra in their tax. The backbencher will get $126.53 extra. Is that fair? I say, `No—absolutely no.'Let us look at a single income couple on $25,000 a year with one dependent child under the age of five. They will be getting $23.59 a week extra; the backbencher on $80,000 a year is going to get $102.07 a week extra. Is there fairness in that? No, there is not—none whatsoever. A person on $25,000 a year with one dependent child between five and 13 years of age is going to get an extra $18.04; the backbencher is going to get an extra $86.93. A single income couple on $25,000 a year with two dependent children, one aged under five, will get $21.53 a week extra; the backbencher will get $116.55 a week extra. Where is the fairness in that? A single income couple on $25,000 a year with three dependent children, one aged under five, will be getting $23.94 a week extra while the backbencher will be getting $152.56 a week extra. Where is the fairness in that? There is not any fairness in that.The other anomaly we need to look at is the difference between a single income couple with one child under five years and a single income couple with two children, one of whom is under five. The couple with one child under five will actually end up getting $2.06 a week more than the couple with two children. A family with three children, one of whom is under five, will get only about 35c more than the couple with one dependent child under five. This is absolutely diabolical. It is unfair. I find it obscene that people on my sort of income are going to get that sort of assistance and that sort of value from the tax cuts so they can pay for their GST but that families with small children and one income are going to be getting very small amounts of money. This government is not being fair, it is not being fair dinkum and it is not taking cognisance of the real needs of people in the community.A lot of these issues are just beginning to percolate down from peak bodies to the grassroots. As we said in the election campaign, `The devil is in the detail'—and my word, that is very, very true. Last week there was a meeting in Bathurst of a number of not-for-profit and charitable organisations, and they were expressing grave concern about what the impact of this tax package will be on them. Organisations represented there included Anglicare, the Association of Civilian Widows, Meals on Wheels, an international friendship group, a nursing home auxiliary, retired transport workers, a disability service, the Combined Pensioners and Superannuants Association, a Probus club, a Rotary club, civilian widows, police and citizens youth clubs, View clubs, a gentle exercise class for those who suffer from arthritis, the Royal Blind Society, a cake decorators club, another aged care auxiliary, a cancer patients society, the Country Women's Association, a retirement village auxiliary, the University of the Third Age, the Uniting Church, the Arthritis Foundation, an information centre, a highland society and St Vincent de Paul.I think everybody would recognise this is a good cross-section of the charitable, not-for-profit and caring organisations in the community. They have come together, of their own initiative, to raise their concerns and discuss how the GST is going to affect them. And they are all appalled. They are concerned about the impact the extra work is going to have on voluntary treasurers. Many of the people in these organisations are elderly and they are concerned about the workloads. They want to know what happens with the membership fees: is there a GST on those? Many of these organisations do not have incomes of $100,000 a year and therefore they will not be required to get a number; therefore they will just cough up the GST and cop it.These are organisations which are doing good things for their community and which care for their community. They are not doing things for themselves; they are doing things to benefit their community, and they are going to be put to greater cost, greater time and greater impost, and it will have a major impact on the care and the services that they are able to deliver. The GST will have a severe impact on the amount of services they will be able to deliver, and it is not fair. As I said before, I think this is an amoral tax and an imposition upon the people. This government should be roundly criticised and the tax should be defeated.12:22:003844Bolkus, Sen NickSenator BOLKUSXE4SAALP00—I start by saying that what we are discussing here is not a new tax, as the legislation would have us believe, but an old tax drawn from an old idea. We are talking about an inequitable tax. We are talking about a tax that has not succeeded in delivering the promises that it was supposed to deliver wherever it has been applied throughout the world. We have a Prime Minister who knows only how to go backwards when it comes to picking up policies. Whatever the policy area, whatever the agenda, this is a Prime Minister who looks to the 1950s and the 1960s. He looks with glowing eyes to the achievements of Thatcher and Reagan. He does not see the downside of those leaders; he sees the ideological fantasy that drove them to introduce taxes such as this. This is a Prime Minister who knows no better.We are also talking here of a tax which is based on a fiction. The promise was that no-one would be worse off, that all would be winners. But this is a fiction; it is a lie. The Prime Minister knows this is a fiction, as do all but his most gullible of government members. They know it is a fiction because they know this is a tax which is inequitable by its very nature. It is a tax from which there will be millions of losers. Not all will be winners.The package is no more than a pea and thimble trick. Many have been deceived but more will be losers. Only yesterday, for instance, we had ministers talk in here of extra billions of dollars for the states. But what we find hidden in that is the application and pursuance of another of Howard's agendas—to take Australia as a nation back to the Australia that used to be there before Whitlam in the 1950s and the 1960s. With extra money to the states will go extra responsibilities. Extra responsibilities for the states will mean fewer responsibilities at a national level. Fewer national responsibilities will mean a fragmentation of services. Regions and states will be treated differently. We are winding back the social infrastructure of this nation by adopting a system such as this, a system which will lead to a fragmentation of national responsibilities.Let us look back to the 1950s and 1960s when national governments did not take such a leading role in social policies. Whether it was schools or hospitals, it is clear that whatever area of social infrastructure you look at was debilitated and fragmented. This is the agenda of John Howard. This is the agenda of a man who was born politically in those days, who glorifies those days but has not left them. He wants to see power back to the states. He does not want to see a national commitment, a national outlook.As I said, what we are voting for here is not just dollars and cents and a new tax system but a new national framework for the delivery of social services and infrastructure. I believe, with the way the numbers are stacking up here, it is going to be the Democrats and Senator Harradine falling over themselves to do a deal. If this legislation is passed, we will rue the day on a range of different levels. I say to ACOSS, who basically let this tiger out of the cage a few months ago, that they may be seeing a short-term gain but, when an enormous range of national commitments are devolved to states and when they come back bleating for commitments from Labor, we will look to them to fix up the mess that they and John Howard have delivered to Australia.This debate comes at the end of a long and exhaustive analysis, not just by senators but also by the public—a public which has had the first real opportunity to analyse the detailed implications of this tax package. It must be said at the end of the debate at the committee level that this is a package that has failed the test. It has failed the honesty test and it has failed the equity test. There are many losers, and losers are being identified increasingly as the days go by. It has been born out of an outdated ideology. It will have a negative impact on the quality of life of Australians, not just the financial situation of Australian families.I say to senators who are thinking about their position on this tax—and obviously it is the minority parties, all but the Greens, we are talking about—that if you had any concerns about this tax package before the process started you have got to have more concerns now. If you had any doubts about this tax package before the committee process started, you should not have doubts now; you should be rejecting it. If anything has been shown over the last three or four months, it is that more and more, on so many different levels, problems are being found with this tax package—problems of inequity and problems of negative impact on the financial situation and on the quality of life of Australians.What I would like to do today is touch on the two areas of my direct responsibility in the Senate—that is, the environment and representing the shadow minister for Aboriginal affairs. At the end of the committee process of the Senate environment committee, it was clear that the tax package will have a negative impact on the environment and on the quality of life of millions of urban Australians. It will result in the loss of jobs in emerging alternative energy industries. The evidence was that the government's tax package will have a negative impact on a range of areas, including the environment, especially in urban areas, public transport services, the arts—including books and literature—non-profit organisations, information technology and communications. And the evidence coming before other committees was that indigenous communities will be most hard hit by the inequitable impact of this tax.Although the government claims that this is a package for jobs, the government's taxation reform proposals will cause huge job losses in emerging industries. The government's so-called compensation package will not, in the areas that the committee that I was on looked at, sufficiently compensate for the damage inflicted by the GST and other taxation reform proposals.An amazing aspect of the whole process was that we identified that in areas such as indigenous communities and the environment the government did not consult with relevant stakeholders about the impact of their tax package. They even failed to substantially consider the impact of the tax system on many industries. This was nothing short of an arrogant disregard of people by government and also an arrogant disregard of other commitments that they have made in a whole range of other policy areas. This is a government on an ideological crusade. At the end of the day, I think Australians will be the poorer for it.According to the evidence before the Senate environment committee, the government's taxation reform proposals will lead to disastrous, long-term damage on the environment. This will occur mainly through the removal of the diesel fuel rebate and through an increase of diesel fuel pollutants and greenhouse gases. The effect of this package will be to reduce economic incentives to use alternative, more environmentally friendly fuels and technologies. It is an impact that will make it even harder for the government to meet its own watered down Kyoto targets for greenhouse emissions.Diesel fuel consumption, on the evidence before us, will increase as a result of the tax package—despite attempts by the government to suggest otherwise—and an increase in such fuel consumption will lead to increased environmental degradation. The overwhelming force—if not the universal force—of the evidence to the Senate Environment, Communications, Information Technology and the Arts References Committee was that a cut in diesel fuel excise would result in clear economic incentives to use diesel fuel for transport; a switch from petrol vehicles to diesel fuel vehicles; a significant modal switch from more fuel efficient rail transport to less fuel efficient and higher polluting road transport; and a reduction of the economic incentive to switch from diesel fuel technologies to more environmentally friendly gaseous fuels and technologies such as solar.Of immediate concern to me, as a senator from South Australia, is the impact that the fuel changes would have on the already fragile economics of the Alice Springs-Darwin and the Melbourne-Darwin rail proposals. My concern is not so much with the latter as with the former. The economics of that proposal are already fragile, and the evidence from experts in the sector, from Australian National to other public transport user consultants, was that the shift in passenger use from train to diesel fuel vehicles would basically mean that once again we would have to go back to the drawing board in terms of the financing of the Alice Springs-Darwin railway line.In terms of that shift, even the Ford Motor Company and the international engine manufacturer, Caterpillar, were reported in the Australian on 15 April as accusing the Howard government of `being so uninterested in vehicle pollution that it is legislating to destroy the emerging natural gas industry'. One of Ford's most senior international directors, Mr John R. Wallis, said in the Australian on 15 April:It appeared that the Australian Government was not interested and saw no pressing need to cut greenhouse gas emissions from motor vehicles.It may be that Australia is not under pressure to cut carbon dioxide emissions as the Federal Government won a funny target at last year's Kyoto conference which allowed an eight per cent increase in CO2 by 2012.That comes from an international business leader, and that advice and that statement is in accord with, as I say, the overwhelming body of evidence before the Senate inquiry committee. We have to be concerned about such impacts, because the major impact of the GST package and the fuel changes will be in urban Australia. We do have, and we expect to have, living standards which currently are amongst the best in the world in some parts of Australia, but they are not so good in other parts. The government's commitment should be to ameliorate, not damage, the environment of urban Australia. But this package will ensure that Australia's urban areas will be highly disadvantaged by the environmental impact of the taxation reforms, particularly those leading to an increase in diesel fuel usage.Such is the concern in the community that, last week, the Council of Capital City Lord Mayors condemned the GST diesel rebate changes. The council met on 16 April in Sydney and, in a statement they put out, the lord mayors of all capital cities in Australia described the diesel rebate as `strategically unsound' and a `flawed policy'. They are showing real concern for their cities. It is a pity that this government has not even considered the impact of its changes on the major cities of Australia.Higher greenhouse gas emissions and air pollutants from increased diesel fuel consumption will lead to an increase in highly dangerous diesel fuel particulates released into urban environments. The inhalation of such particulates carries huge risks for Australian families. It was the President of the AMA, Dr David Brand, who said:Medical evidence is mounting on the dangers of fine particles in diesel exhausts. I am particularly concerned by the evidence that these fine particles may lead to the premature deaths of 1,000 Australians every year. My medical colleagues have linked these particles to increased risk of lung cancer and a variety of respiratory disorders. The government should take heed of these medical indicators and take steps to reduce, not increase the use of diesel in our cities.That is the point. Our responsibility should be to reduce the impact of diesel in our cities and not, as is emerging from this policy, to increase the use of diesel.The government also claims to be concerned about jobs, and there is a commitment that there will be more jobs and economic activity as a consequence of the GST package. But what we have found across many sectors, in the considerations over the past few months, is that the impact of the GST, particularly in the field of new environmental technologies, new emerging industries and new export industries, will be negative in terms of the growth of those industries and job opportunities as well.The Australian renewable energy sector, for instance, leads the world in the development of new technologies that will not only assist Australia in meeting our international environmental obligations but also assist others. The renewable energy sector would be disadvantaged by the proposed tax changes, including a GST, with prices rising by six per cent to nine per cent, as compared with 4.6 per cent for coal-fired electricity. We are talking here about solar hot water systems. Pacific Solar Pty Ltd, for instance, sells grid-connected solar photovoltaic systems that generate clean energy. They will be the industries with export potential which would be negatively affected.Alan Pears, the policy coordinator for the Sustainable Energy Industry Association, highlighted their problems when he said that the renewable energy sector competes with very large, very well-resourced energy suppliers. He said that the `incremental impact' would be greater on his sector. He stated:At the same time, a number of our important products are at present exempt from wholesale sales tax and, essentially, lose an advantage when that exemption is neutralised.Industry leader after industry leader is concerned about the impact of a GST package, particularly in these new, emerging, export oriented industries.Another area which I believe should be of major concern to the Senate is the impact on particular parts of our community. Particularly in this instance I would like to identify indigenous Australians. Indigenous communities are characterised by low levels of income; by heavy dependence on social security payments and CDEP; and, being remote, by high transport costs. They also have expenditure patterns weighted heavily towards food, clothing and footwear—items which are often zero rated under the wholesale sales tax system.The impact of this package on those communities will be quite debilitating, quite negative, and in many ways would redress some of the achievements and gains that governments have made over the last 15 years or so. When one looks at the submission of ATSIC to the broader Senate inquiry, a number of points stand out. Indigenous people in rural and remote communities have low capital incomes. They have household incomes which are in the lowest quintile for the nation and amongst the lowest in the Australian community.ATSIC could not rely on the household expenditure survey for accurate evidence but they did embark upon a more direct survey of expenditure patterns of indigenous families. They commissioned a survey and ensured there were samples taken with respect to urban, rural and remote indigenous households. What came out of that survey was also presented to the Senate committee. On page 8601 of evidence of that committee, we find a reference to the cost of food:A striking feature of the pattern of consumption in rural and remote Indigenous communities is the high share of expenditure on food in household budgets. This share is greater than that associated with the income of lowest quintile non-Indigenous households. Recent studies show that for non-Indigenous households, about 24 of household budgets are spent on food . . . Anecdotal evidence presented in recent studies on this subject suggest that in some cases expenditure on food in rural and remote Indigenous communities can go as high as 50 or even 60 per cent of household budgets.In fact it ranges from about 40 to about 60 per cent. They will be hit hardest. The poorest will be hit hardest. The conclusion of that report was that indigenous communities spend more on food and they will be hit hardest by this GST.The report was also concerned about the impact of the tax package on communities' cost of living. The report says on page 8603:Adding up the contributions to the cost of living increases to rural and remote Indigenous communities from each of the elements of Indigenous household expenditure, results in an increase in the cost of living of 3.7 per cent—almost double the increase in the cost of living the Government has estimated to flow from the tax package for the non-Indigenous community.That of course is based on the 1.9 per cent figure for non-indigenous communities. You are talking about double the impact on indigenous communities, indigenous families. You are talking about families who, because of the nature of their existence—their remoteness from cities and so on—are dependent quite often on monopoly situations.There will be absolutely no way that the government will be able to control, with any degree of application of its principles, price increases in rural Australia, particularly with respect to indigenous Australians. They will be hit hardest and, as that report demonstrated, the cost of living increase for rural and remote indigenous communities associated with the tax package will be about twice what it is for the rest of Australia with respect to food. That is twice in terms of the theoretical impact and the fact that there is no capacity to actually apply any price surveillance or price control in those areas because of their monopolistic nature and the remoteness of those communities. We will be hitting those communities hardest. As that report quite clearly said, there will be a significant winding back of any improvements in the lives, welfare and security of indigenous Australians because of the impact of this tax package on them.So we have a package which has been pursued with blind adherence by the government, a package which is inequitable in so many dimensions, a package which negatively affects both the financial status and the quality of life of so many Australians, and a package which has the inherent danger of shifting so much social responsibility from the Commonwealth to states and at the same time ensures that national responsibility, national commitments are devolved in a fragmented manner.As I said before, this is not just a matter of shuffling dollars and cents from state to Commonwealth, it is not just a matter of shuffling dollars and cents from the poorest in our community to those on higher incomes—and already we have had mention of members of parliament benefiting quite disproportionately from this package compared to other parts of the community—we are talking here of a fundamentally inequitable package which should be refused by the Senate (Time expired).12:42:003849Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—I would like to commence my contribution to this debate on the so-called `a new tax system legislation' by congratulating those senators who are members of the select committee and the various other standing committees that undertook the inquiry into this legislation. This was work that was performed by the select committee and the standing committees in a relatively short space of time due to time pressures imposed by government. But, importantly, it was work that had to be done by the Senate committees because of the refusal of the Howard coalition government to put all of the detail before the people at the last election.There have been two elections where a GST—a goods and services tax—has been an issue before Australian people. The first was in 1993 when the then Leader of the Opposition, John Hewson, presented his Fightback package to the electorate. The second was in the election last year in 1998. What we know is that on both occasions, when the people have had before them proposals for a radical change to the system of taxation in this country and a proposal to introduce a goods and services tax, the people have overwhelmingly rejected such a proposal.That was certainly the case in 1993 when the Fightback package was overwhelmingly rejected. At least on that occasion the then Leader of the Opposition, John Hewson, was prepared to put all of the detail before the public, and when the public had an opportunity to scrutinise that package they overwhelmingly rejected it. They re-elected the Labor government, which opposed the package, with an increased majority of seats and also with an increased majority of the two-party preferred vote. I understand the Senate is going to adjourn for lunch. I wish all senators a GST-free lunch.Debate interrupted.Sitting suspended from 12.45 p.m. to 2.00 p.m. Questions Without Notice384938493849Cook, Sen PeterSenator COOKRF4WAALP00—My question is to the Minister representing the Prime Minister, Senator Alston. In view of the minister's unwillingness to come to grips with this issue at question time yesterday, I now ask: if, as Treasury anticipates, wages continue to increase at a greater rate than the consumer price index and, if as a consequence the existing pension benchmark of 25 per cent of average male weekly earnings overtakes the GST compensation benchmark of CPI plus 1.5 per cent, won't pensioners be left exactly where they would have been without the GST, that is, on 25 per cent of average male weekly earnings, but without any compensation for the 10 per cent GST?3849Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—It is unfortunate that Senator Cook does not want to follow the detail, but presumably he is referring to comments that have been made by Neil Warren. Presumably he is the high watermark of your case. He said:It is now generally accepted that, with the passage of time, if MTAWE rises faster than CPI, which is historically the case, then ultimately pensioners will get nothing more after the introduction of ANTS than they would have got before.But that is not to say, Madam President, that they will be worse off. In fact, it acknowledges that either way pensioners will be better off.Pensions rise by four per cent before any price rise. Then if prices rise, the tax package maintains pensions at 1.5 per cent above CPI. So, if wages rise faster than prices, pensions are already indexed to MTAWE, so pensions will rise further in front of prices. So, pensioners will be even better off if the pension becomes driven by wages rather than prices. Madam President, this is a double protection measure. The two promises do not erode one another and, under all scenarios, pensioners are better off, notwithstanding the price effect of a GST.I think I pointed out yesterday when quoting from Mr Costello's piece in the Financial Review that Professor Neil Warren did not purport to point to anyone being worse off. This is the same old story of relativities. You have tried it time and again. Why don't you face up to the fact that what we are debating here is an historic attempt to reform an out-of-date 1930s tax package?It is tragic that someone like Senator Cook can allow Mr Crean's office to write the entire committee report, to simply vacate the field, when even Mr Crean's brother, the Tasmanian Treasurer, signed off on the tax package.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are too many interjections.LD4Senator ALSTON—In other words, anyone who looks at this issue for a moment will know that this is an historic opportunity to reform the tax package to ensure that people are not worse off, and that in fact they are a lot better off and there are a lot more opportunities and incentives arising from massive taxation reductions, which you of course do not believe in at all. You much prefer the system of you handing it out and getting back political thankyou notes.That time has past. We are in the business of sensible reform. We have ensured that those at the lower end of the income scale are properly protected. It is a fair package and, the sooner you acknowledge that and take John Della Bosca's advice, the better.3850Cook, Sen PeterSenator COOKRF4WAALP00—Madam President, I ask a supplementary question. I remind the minister that it was Mr Geoff Carmody of Access Economics, the modellers of Fightback, who first put this proposal. Professor Neil Warren, John Hewson and Professor Ann Harding have put it as well and Treasury confirmed it in hearings of the Senate committee. In view of the foregoing, can the minister answer this simple question: will pensioners always be better off with a GST than they would have been without it?3850Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—The short answer is that pensioners are like anyone else; they will not be worse off. They will in fact be better off. And if you want to refer to Professor Neil Warren, just remember what he said: that on average there appear to be no groups who are losers from a new tax system. Pensioners happen to be a group in the community. Why don't you face up to the fact that what pensioners like everyone else are getting is an historic opportunity for a new tax system?38503850Gibson, Sen BrianSenator GIBSONBX5TASLP10—My question is to the Minister representing the Prime Minister, Senator Alston. The vast majority of Australians agree that Australia's outdated and unfair taxation system is in need of urgent reform. What is the government doing to improve the living standards for all Australians and to reduce the tax burden on Australian families? Is the minister aware of any alternative proposals and what would be the impact on the Australian economy if this opportunity for much-needed reform is lost?3850Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—The fact is, of course, that the vast majority of Australians do agree that Australia's outdated and unfair taxation system is in need of urgent reform.UI4RAYSenator Robert Ray—How do you know?LD4Senator ALSTON—You could not get a better example. Here is someone who professes to read the numbers and spends all his time looking at election results. He knows every stat and he knows that he beat Senator Cook for deputy leader about 10 years ago by 90 to 30. Yet, he still does not accept the result of the last election. In other words, he does not accept that Australians voted against Labor because they totally ignored the middle ground. He simply says that this must have been based on skewed polling. In other words, Senator Ray wants to indulge his obsession, hatred and resentment for anyone who happens to have provided successful advice to the government.What Senator Ray is also doing in the process is totally ignoring the lessons from the last election. The lesson is this: without reform, the average wage earner will be paying 43 cents of tax on every additional dollar they earn. What is worse, after next year the average earner will be paying 47 cents in the dollar on every extra dollar they earn. In other words, there is no incentive: quite the opposite.If Senator Ray does not understand that ordinary Australian families revolted against the current arrangements and saw Labor as offering no alternative at all, just look at what people like Mark Latham have had to say—that poverty cannot be overcome simply by handing out welfare cheques. The way you address these issues is by providing incentives and taxation reductions to focus on the middle ground. A lot of gratuitous advice was provided by Senator Ray's colleagues through the media in the wake of the last election result saying that they had not listened to middle Australia. I am appalled to think that Senator Ray discounts all that as somehow a concoction of Mark Textor. I presume you inspired the knee-jerk reaction.Senator Gibson has, quite rightly, drawn attention to the absolute chasm that exists between the approaches of the two parties. I am delighted to know that Labor has not changed one iota. In other words, it is not accepting the advice of those who want it to be forward looking, progressive and reformist. It is accepting the advice of those who want to pursue the politics of envy, those who somehow believe that you can defend the current system. We do not think you can. We are absolutely confident that the average Australian did not accept the current system either.AW5CARRSenator Carr—Politics of privilege over there.LD4Senator ALSTON—I see, if 81 per cent of people are better off as a result of the change in the system. It is a pretty funny sort of privilege, isn't it? Your idea of privilege is to look after a few union mates. That is what privilege is about for you. They deliver you your place in the parliament, so you get up and parrot their prejudices.We are not interested in the politics of the past. We are interested in the fact that, with $13 billion in tax cuts, the ordinary family will be $40 to $50 a week better off after the impact of the GST. That is what it is all about. The battle lines are drawn. You clearly have learnt nothing. We are very confident and relaxed, thank you very much, in the strategy that is being pursued, and we do want to deliver the goods to ordinary Australians. You clearly do not. You want to ignore all the advice that you have been getting to date. The more times that we have people like Martin Ferguson saying that work for the dole is not relevant to getting a job, the happier we will be.38513851Conroy, Sen StephenSenator CONROY3L6VICALP00—My question is addressed to Senator Alston, the Acting Leader of the Government in the Senate. How does the Prime Minister's guarantee that no-one will be worse off under the GST fit with the evidence of the Deputy Secretary of Treasury, Greg Smith, to the Senate GST inquiry that those people who do not have a relationship with the federal government will not be able to access compensation? Isn't this in fact the case? How can these people possibly be compensated for the GST?3851Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—Once again, if you are talking about a group in the community, there is no evidence that any single group will be worse off. In fact, they will be better off. If you want to run around finding what you think is an example of someone who will be somehow less better off than someone else, that is fine for you, but it simply won't wash. We are very much aware of what Treasury has said. The fact is that it does not, in any shape or form, contradict what has been said by the Prime Minister, the Treasurer or anyone else. You can go on as much as you like, but the politics of envy will simply not work.3851Conroy, Sen StephenSenator CONROY3L6VICALP00—Madam President, I ask a supplementary question. Minister, doesn't Mr Smith's evidence to the Senate inquiry mean that all those Australians not in a relationship with the government through tax or social security payments will be big losers, like people living off workers compensation benefits, recent migrants, youths up to the age of 21 living at home, and low income farmers? How can these people possibly be compensated for the GST? Who is telling the truth on this crucial issue—the Deputy Secretary of Treasury, in evidence to the parliamentary committee, or the Prime Minister?3851Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—The short answer is: the Prime Minister. You simply need to look at the fact that there may be someone in the community who is living on a farm, who has no connection with the economy, who does not pay tax and does not earn any income, who grows all his or her own food, and who will therefore be untouched by the changes. They will be no worse off as a result of the changes. But in most respects, people like those on workers compensation payments are still deriving income, they are still paying tax, and they will be very significant beneficiaries from any reduction in the taxation structures. The short answer is that the Prime Minister was dead right.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! The level of interjection is unacceptably high. It makes it extremely hard to hear what is going on. I draw senators' attention to the standing orders.38523852Ferguson, Sen AlanSenator FERGUSONEP5SALP10—My question is addressed to the Assistant Treasurer, Senator Kemp. After 13 years of hard Labor, Australian families suffered from one of the highest income taxation burdens in the world, which discouraged national savings and did not provide a decent reward for working harder. Will the Assistant Treasurer inform the Senate what the government plans to do to redress this situation and how it plans to ease the tax burden upon average Australian families?3852Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I thank Senator Ferguson from South Australia for that important question. Senator Ferguson has always had a particular interest in family policy, so it is not a surprise to receive such a question from him. Families were left in an appalling state, in a taxation sense, during the Labor years. Unlike Senator Cook, the coalition believes that Australians pay too much income tax and that our tax rates are too high.Australian families deserve a tax cut and the government wants to give them one—a big one, worth some $13 billion a year, arguably the largest tax cut in Australian history. These tax cuts promised by the coalition deliver to 95 per cent of taxpayers a cut in their top marginal tax rate. It means that 80 per cent of taxpayers will face a top tax rate of 30 cents in the dollar or less, compared with around 30 per cent of taxpay ers at present. Australians will clearly have a greater incentive to work and to save. There is no better way of encouraging families or giving the opportunity to families to save than by giving them more take-home pay.The government is committed to delivering some $2 billion in enhanced family benefits, including an effective doubling of the tax-free threshold under the family tax initiative and a simplification of 12 family benefits to just three. A typical family can be $40 to $50 a week better off as a result of our tax plan after taking the GST into account. This is good news for Australian families because, for once, they have a government that is prepared to go in and bat for them. We promised to give families a better opportunity to save, and we are determined to do just that.It is clear that, if concessions are made to the current tax reform proposal, all lost revenue would have to be picked up elsewhere. The Australian Labor Party—let me make it clear—has continued its role as the great knocker in Australian politics. The Australian Labor Party—make no mistake—wants to block these massive tax cuts that the coalition have promised to deliver. We have of course no objection to giving people lower taxes. This is contrary to the Labor Party's view, as Senator Cook stated so well in his second-most famous quote, that the Labor Party is a high tax party. Senator Cook, we are not a high tax party; we are a low tax party.The Labor Party is the party that is determined to say no: no to $13 billion worth of tax cuts for Australians, no to any chance of increasing national savings, no to removing $10 billion in business taxes and of course no to lower unemployment. The Labor Party should allow the Senate to pass the government's tax package. The Labor Party should recognise the mandate that we have been given and allow the government to deliver these really massive tax cuts to Australian families.38523852O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—My question is to Senator Vanstone, the Minister for Justice and the Minister representing the Attorney-Gener al. Is the minister aware of recent allegations, including by former employees of Fynwest Pty Ltd, that false evidence may have been given to the Industrial Relations Commission by Mr Chris Corrigan of Patrick Stevedores? Why is the Howard government dragging the chain on such serious allegations and what is the hold-up in referring this matter for investigation to the appropriate agency, the Australian Federal Police? Is it a fact that some time ago the former registrar of the Australian Industrial Relations Commission referred to the government matters arising out of the alleged false evidence given before the Australian Industrial Relations Commission?3853Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—I thank the senator for his question. The bottom line is that the question, as I understood or heard it and recollect it, is based on a false premise. The AFP has not in fact received a reference from anyone to investigate allegations against Mr Corrigan and the AFP has not conducted any investigation. Neither I nor the Attorney-General has referred the allegations to which you refer to the AFP. It is not the place of either minister to do that.3853O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—I ask a supplementary question, Madam President. I remind the minister of the question. I did ask why the government is dragging the chain and clearly that is the case, in response to that. But is it not a fact that the DPP has advised that he is not an investigative agency and does not have the resources to conduct the investigation? Given that, if the minister has not yet referred this matter to the Australian Federal Police for investigation and report, why has she not and will she undertake to do so immediately?3853Vanstone, Sen AmandaSenator VANSTONE7E4SALPJustice and Customs10—When you say `dragging the chain', your implication is that it is the responsibility of either minister to be pursuing this matter. I do not have advice as to what the DPP has said, in the form that you repeated here. I do not deny that that may have happened. I simply do not have advice to confirm or deny that. I am aware, as most other people are, through the media that the matter was referred to the DPP. Anything beyond that is a matter for the Attorney-General to respond to. I will ask the Attorney- General to respond to your supplementary question.38533853Bourne, Sen VickiSenator BOURNETW4NSWAD00—My question is addressed to Senator Alston, representing the Minister for Foreign Affairs. Where does the government intend to get the money announced as extra humanitarian aid to go to the Kosovar refugees? Will the money be additional to the current aid budget? If the money is intended to come from the current budget, are the country programs that are intended to be cut those of the poorest of the poor?3853Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—The moneys that will be made available for the aid project—some $6 million to United Nations agencies, being $3.5 million to the lead relief agency, UNHCR, $1 million to the World Food Program, half a million dollars to CARE and ICRC and $250,000 to World Vision and the Australian Red Cross—will be moneys that have not yet been spent and which will therefore be able to be expended on this very important humanitarian project. The government certainly acknowledges the dire necessity of the plight of so many of those who find themselves involved in the tragedy in Kosovo. Certainly we remain concerned about the appalling humanitarian situation in the regions neighbouring Kosovo.To date there have been something of the order of 535,000 ethnic Albanians who have fled to Albania, Montenegro and the former Yugoslav Republic of Macedonia. There are reports indicating that up to 400,000 Kosovars remain internally displaced. Clearly they are existing in conditions that are extreme. I think anyone who has seen television reports could not help but be moved by the enormity of the crisis, and scenes of death and misery are almost a daily occurrence. In those circumstances, we find it an absolute necessity to make that money available and to ensure that, in addition, we remain ready to provide temporary relief for some 4,000 displaced Kosovars should the UNHCR consider such relocation to be appropriate at a future date.3853Bourne, Sen VickiSenator BOURNETW4NSWAD00—Madam President, I ask a supplementary question. I thank the minister for that answer, but I would have expected that the money had come from something that had not yet been spent. He has not answered, though, whether the money will be additional to the current aid budget or whether in fact it will be reallocated within the aid budget. I am sure that he and the minister are aware that the current aid budget is the smallest it has been since before Malcolm Fraser—which was the highest it had been for a long time. Could he please tell us: does it come from within the current aid budget? If so, where from? If he does not have that information—which he may not have, not being the minister—could he please get back to us with it?3854Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I will certainly make inquiries to see what level of detail might be able to be provided to Senator Bourne. The government, of course, always tries to put itself in a position where it does have discretionary funds available to meet circumstances such as these. If these events had not occurred then presumably that money would not have been spent. We regard this as a top priority and we are allocating the funds accordingly.38543854Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—My question is directed to Senator Alston representing the Prime Minister. Now that the minister has had 24 hours to check the transcript, I ask whether he stands by the Prime Minister's claim on the Sunday program that:By the year 2010 the states will be somewhere in the order of $15 to $20 billion a year better off than they would have been if the present system were to continue.Is the minister aware that last year before the federal election the Prime Minister and the Treasurer claimed that the government's tax package would result in additional revenue of $25 billion over 10 years? Was the Prime Minister wrong on Sunday when he claimed additional revenue of $20 billion a year or was he wrong last year when he claimed $25 billion over 10 years? How can the public trust the Prime Minister on anything when he gets his facts so wrong?3854Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—I am not sure that we are even comparing like figures, but we are certainly not comparing numbers that have been ascertained at the same time. All I can say is that the figures provided by the Prime Minister on the Sunday program were accurate and up to date, represent the latest assessment of the extent to which the states will benefit from the GST and will give them an enormous capacity to deliver all of those programs that the states have constitutional responsibility for.We know you hate that arrangement. You would like to scrap federalism as quickly as you can. But the fact is that you even have Labor premiers out there who acknowledge that they will have a substantially increased capacity to not only deliver increased spending on health, education, housing, hospitals, libraries and the like but also be in a position to benefit their communities in a way that would simply never be the case if the current tax system had remained in place.3854Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Madam President, I ask a supplementary question. I do not know whether the minister is deliberately misinterpreting this question in order to avoid answering it and admitting the Prime Minister was wrong. I want to know—and I think the Senate wants to know—whether the Prime Minister was wrong on Sunday when he claimed additional revenue of $20 billion a year to the states or whether he was wrong last year when he claimed $25 billion over 10 years. If the minister cannot answer the question now and provide the Senate with a proper answer, perhaps he could take it on notice and check whether the Prime Minister got it right on Sunday or whether he got it right last year. He certainly cannot be right on both occasions.3854Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—If Senator Faulkner wants to know the facts, they are as follows. At the Premiers Conference all Commonwealth, state and territory leaders signed the landmark intergovernmental agreement. All GST revenue will be provided to the states. As GST revenue increases, all states will receive large financial gains. On agreed Premiers Conference estimates—5K4FAULKNER Senator Faulkner—Madam President, I rise on a point of order. I asked the minister a direct question in relation to two statements the Prime Minister made: one last year and one last Sunday. I believe the Senate is entitled to know on which occasion the Prime Minister was correct. That is the question. It is very clear. Senator Alston either does not know the answer or he is reading from the wrong brief. If he does not know, perhaps he could check whether the Prime Minister was misleading the public last year or last Sunday. Take it on notice.10000PRESIDENTThe PRESIDENT—I am sure the minister heard the question. He is 20 seconds into it, and I trust that he is leading to dealing with it.LD4Senator ALSTON—Indeed, Madam President. Before I was rudely interrupted, I was about to say that, on agreed Premiers Conference estimates, the states will gain around $1.8 billion in 2004-05 and around $2.9 billion in 2005-06. Thereafter, the annual gains will continue to grow as GST revenue grows. Even if the annual gains remained at $2.9 billion, by 2010 the states would be around $17 billion better off in cumulative terms. That sounds pretty much like $15 billion to $20 billion to me.38553855Brown, Sen BobSenator BROWNQD4TASAG00—My question is to the Special Minister of State. Is it true that the republic model to be put to Australians at this year's referendum provides for instant dismissal of the president by the Prime Minister with no road to restoration for the president no matter how popular or correct he or she has been? Is there any other country on earth which gives this power to a prime ministerial equivalent? Is there anywhere on earth where the president will be so vulnerable and potentially miserable?3855Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—The proposed section 62 of the Constitution Alteration Bill proposes that the Prime Minister have the power to remove the president by written notice, and that is of immediate effect. The proposed section 63 then provides for an acting president to take that place.In relation to the question that Senator Brown has asked, in accordance with current practice, the Prime Minister has an existing power to remove the Governor-General, and it is something which the government fol lowed from the communique of the Constitutional Convention. The Constitutional Convention required, however, that the Prime Minister did have to seek the approval of the House of Representatives within 30 days, and that has been accommodated in the legislation. A slight variation in the government's proposal is that, if the Prime Minister is defeated in that vote in the House of Representatives, it is not taken as an automatic vote of no confidence. However, it is a matter of fact that you would get political reality that would flow from that: you could well have a resignation by the Prime Minister; you could have the acting president remove the Prime Minister for an act of dismissal which was not supported by the House of Representatives. So the government is of a view that there is enough political sanction there to affect any vote by the House of Representatives which would overrule the Prime Minister's dismissal of the president.This is part of a draft bill which is open for discussion. Submissions were asked for by 16 April. If Senator Brown wants to make a submission on this, there is still time to put that in. I will take it on board if he has a concern about that. But as I understand it, there would be nothing to stop a president who had been removed from standing for re-election at a subsequent time. So whichever way you look at it there are safeguards there, and the provision is in keeping with the current situation.I might just advise the Senate, whilst we are on the aspect of the referendum, that when this matter was last before the Senate there was some comment about public education. Senator Brown might be interested to know this. The expert advisory panel has been appointed today by the government. That advisory panel will provide advice on proposed materials to ensure that the public education program is fair and balanced. Sir Ninian Stephen will be the chair of that panel. The other four members are Professor Cheryl Saunders, Professor Geoffrey Blainey, Dr Colin Howard QC and Dr John Hirst.3855Brown, Sen BobSenator BROWNQD4TASAG00—As a supplementary question, I ask the minister whether the provisions under this constitution that the government is making for the dismissal by one member of parliament, albeit the Prime Minister, of a president appointed by two-thirds of both houses of parliament could have led to a situation in Tasmania in 1989 where the then Premier, Robin Gray, would have been able to sack the Prime Minister and prevent the establishment of the Labor-Green accord government. I repeat the question: can the minister cite one country anywhere on earth which makes a president so vulnerable to a prime minister that he can be dismissed on a simple written note by the prime minister with no redress and no avenue for his restitution to office?3856Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I have already said that this situation exists in Australia at the moment and has existed since Federation 98 years ago. But I can say to Senator Brown that there are safeguards in this; they are safeguards which were recognised by the Constitutional Convention last year and they have been accommodated.QD4BROWNSenator Brown—Madam President, I raise a point of order. The current Prime Minister cannot sack the Queen.10000PRESIDENTThe PRESIDENT—Senator, I think you are debating the issue. There is an appropriate time to do that. There is no point of order.9X5Senator ELLISON—The Queen does it on the Prime Minister's advice. It is taken as a matter of form that the Queen would follow the Prime Minister's actions and advice and do that. I say to the Senate that we do have the safety of an approval mechanism, a ratification mechanism, by the House of Representatives, which has to take place within 30 days.38563856Quirke, Sen JohnSenator QUIRKEZS6SAALP00—My question is directed to the Acting Leader of the Government in the Senate. Does the minister stand by the Prime Minister's claim that Mr Mark Textor is `a very competent and very effective pollster for the Liberal Party of Australia'? Does the minister stand by Senator Hill's claim that `He's given good advice to the Liberal Party in the past which has been acted upon to the Liberal Party's advantage'? Can the minister now confirm the revelations contained in last night's Four Corners program that Mr Textor has been paid a quarter of a million dollars by Pangea—a company bent on making Australia the world's nuclear waste dump—to conduct polling on community attitudes to the proposal? Does the government agree with the conclusion of Mr Textor's research that in certain circumstances `people could see the benefits of a nuclear waste dump'?3856Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—It is an extraordinary proposition that someone can go and do research commissioned by the private sector and come up with certain findings that you find unpalatable and that therefore we should draw the conclusion that somehow the Prime Minister is wrong when he says that Mr Textor is competent and effective and that Senator Hill said he gave good advice to the Liberal Party. You couldn't imagine a bigger non sequitur in history.You hate the fact that Mr Textor was very important indeed in providing advice to the Liberal Party in assisting our re-election in the last campaign. The Labor Party has no hesitation in taking advice from a whole range of people—Bob Hogg when he was state secretary—but you hate it when they give you advice that you don't like. You hate it when you get advice that you do not like from people like John Della Bosca. The fact is that Mr Textor is a very competent and effective pollster. I have no reason at all—Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! The level of noise is too great.LD4Senator ALSTON—As I heard it, all that Senator Quirke is able to point to is that Mr Textor says that in certain circumstances the public might have a certain attitude. That does not surprise me one bit.3856Quirke, Sen JohnSenator QUIRKEZS6SAALP00—Madam President, I ask a supplementary question. Given that it is now beyond doubt that Mr Mark Textor is using his cosy relationship with the Liberal Party and the Prime Minister to secure government contracts, will the government now concede that he is also using these links to secure multinational contracts with companies in the mistaken belief that this will ingratiate them with the Australian government?3857Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, Information Technology and the Arts10—This comes out of the bowels of the trades hall council, doesn't it? You simply cannot accept the fact that someone can give advice to the government which actually assisted in the re-election. Therefore, you would say that that person is entirely disqualified—5K4FAULKNER Senator Faulkner—Answer the question about Textor.LD4Senator ALSTON—If you just listen, I will. The fact is that you resent that Mr Textor got it right. You say that, because he got it right in advising the Liberal Party, therefore he ought to be disqualified from giving any advice to government in the future, any advice to the private sector. What a preposterous proposition! Try that one on Rod Cameron. Try that on all the people who have given you advice over the years. You wouldn't for a moment suggest that and nor would I.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! There are senators on my left who are shouting in a way that makes it almost impossible to hear. Senator Alston, do you have anything further to add?LD4Senator ALSTON—No.38573857Calvert, Sen PaulSenator CALVERT5F4TASLP10—My question is directed to the Minister for Regional Services, Territories and Local Government. The Howard government's recent intergovernmental agreement with the states and territories has been applauded and embraced by all premiers and chief ministers. Minister, how does this historic agreement affect local government and, in particular, funding for this very vital area of government?3857Macdonald, Sen IanSenator IAN MACDONALDYW4QLDLPRegional Services, Territories and Local Government10—I thank Senator Calvert, a former distinguished warden of the Clarence Council and one who is interested obviously in local government, for that question. Unfortunately, the Labor Party seems to have stopped wanting to hear the truth about local government. I have not been able to encourage a question from the shadow minister for some time. It seems that the Labor Party are more intent on publishing deliberate and outright lies about the impact of the GST on local councils. For example, the Labor member for Franklin, Mr Harry Quick, deliberately told his constituents the untruth that there was a GST on rates. I assume that came from the shadow minister. That was a deliberate and outright lie. Fortunately, this new agreement is great news for local government, as it is for the particular state.Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Senator Macdonald, order! There are far too many interjections. Senator Faulkner and Senator Evans, I have called the minister to order so that we can wait for sufficient silence to enable us to hear.YW4Senator IAN MACDONALD—Thank you, Madam President. Although the Labor Party at some levels will tell lies about this, of course Mr Beattie, the Queensland Labor Premier, indicated that the Howard government has a mandate for tax reform. In fact, the shadow minister's own Premier, Mr Bacon, said, `I'm the first Tasmanian leader to go to Canberra and come away not worse off.' That is pretty good praise from a Labor Premier.This intergovernmental agreement is a great agreement for local government. It builds upon the already great news for local government—that is, that about 95 per cent of the services they provide are unaffected by the GST. There is no impact from the GST at all. In addition, local government gets $70 million savings from the embedded wholesale sales tax that will be removed, and they make big savings as well from the cost of fuel. In Queensland alone they will save some $18 million a year.The states have signed up to the intergovernmental agreement and have guaranteed local government that they will get from the states at least what they are currently getting from the federal government. That is what local government have been seeking. I can only quote Councillor Ron Yuryevich, the Mayor of Kalgoorlie-Boulder and President of the Western Australian Local Government Association. He said, `We are extremely appreciative that the Commonwealth and state governments have agreed to maintain grants to local government at least according to current criteria in real terms per capita growth.' That is a great endorsement from local government.The agreement provides that both the Commonwealth and the states will include it in legislation and that will, subject to the approval of the other parties in the Commonwealth's case, ensure that that agreement is able to be enforced. All of the revenue, as we all know, from the GST goes to the states and territories, but local government will get at least what they are getting now and the state grants commissions will continue. The intergovernmental agreement provides for all that.Local governments will be able to freely use their money as they see fit. In fact, in my own state, local government is ecstatic about this agreement because the Queensland government—and I give credit where credit is due; to Mr Beattie, the Labor Premier—have agreed to give local government in Queensland a fixed percentage of their share of the GST. That is the sort of thing local government has been wanting. It has come out of this agreement. I can only urge the shadow minister to speak to her Premier, speak to her state Treasurer and get them to provide the same sort of agreement. (Time expired)38583858Lundy, Sen KateSenator LUNDY7G6ACTALP00—My question is directed to the Assistant Treasurer. Can the minister confirm that the government's Y2K disclosure report has revealed that the Australian Taxation Office has completed repairs on less than a quarter of its business critical applications and is one of the worst performing agencies with respect to its Y2K project? Is the minister aware that the ATO's claims that 85 per cent of its business critical applications will be compliant by the end of April and 100 per cent by 30 June have been met with scepticism by leading industry figures? Will the minister guarantee that the ATO's compliance claims will in fact be met?3858Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—I thank Senator Lundy for that question. The government's quarterly year 2000 agency based public disclosure report was issued on 15 April this year. Thirty per cent of the projects are in respect of the buildings occupied by the ATO. The compliance process for ATO buildings is well under way, but progress is impacted by the need to obtain appropriate certifications from appropriate third parties.By the end of April 1999 around 85 per cent of IT specific projects are projected to be back online compliant. The report makes it clear that the ATO decided that as part of the Y2K compliance process additional levels of assurance are required and that a significantly increased applications testing regime is appropriate. Without this additional commitment to testing, the majority of ATO IT systems would have been back online compliant late last year.7G6LUNDYSenator Lundy—We have heard all this from the tax department.WW4Senator KEMP—Senator Lundy, do not get excited. You asked me a question. I am trying to reply to it, so if you could just keep quiet for a moment, Senator Lundy. The current ATO plan is to have all business critical projects compliant by 30 June this year.3858Lundy, Sen KateSenator LUNDY7G6ACTALP00—Madam President, I ask a supplementary question. Thank you for restating the public position put by the ATO, Minister. Now can you advise the Senate whether or not you can confirm that the remediation of the Y2K problem in the ATO has been included in the recently awarded ATO IT outsourcing contract and, if so, at what cost to the taxpayer? Again, I ask you, Minister: will you guarantee that the ATO's Y2K compliance claims, which you have just restated to the Senate, will in fact be met?3858Kemp, Sen RodSenator KEMPWW4VICLPAssistant Treasurer10—It is an astonishing thing with Senator Lundy: she asks you a question, you give her an answer and then in the supplementary question she asks you precisely the same question. Senator Lundy, get a pencil out and write this down so there is no confusion: the current ATO plan is to have all business critical projects compliant by 30 June this year. Write that down, Senator Lundy, and do not keep asking me the same questions.38593859Allison, Sen LynSenator ALLISON1M6VICAD00—My question is to the Minister for Aboriginal and Torres Strait Islander Affairs. Is it the case that your government wants to, in effect, hand over the management of Kakadu and Uluru to the Northern Territory government? Isn't it the case that the new environment legislation will do just that? Is the minister aware that both the Kakadu and Uluru boards of management are strongly opposed to this legislation? Minister, if these changes go ahead and the Aboriginal owners of Kakadu and Uluru reconsider their agreement to lease this land back to the Commonwealth, what will your government do?3859Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I think we are all interested in Kakadu and the national park. My answer to the first question is no. My answer to the second question is no. My answer to the third question is that we will do what is best in negotiation, which is the best for all of the people of Australia who wish to visit that wonderful place.3859Allison, Sen LynSenator ALLISON1M6VICAD00—Madam President, I ask a supplementary question. I thank the minister for his reply. Is the minister aware that the Northern Territory government said during the inquiry into the Environment Protection and Biodiversity Conservation Bill:We are talking about the (Northern Territory) Parks and Wildlife Commission assuming the on-ground management role currently held by the Federal Government's Parks Australia.Does the minister remember the full-page advertisements by the Northern Territory government back in 1985 which said, `Today the Rock no longer belongs to all Australians'? Isn't it the case that the Northern Territory government has never accepted the handover of Uluru and Kakadu to the traditional Aboriginal owners? Isn't this legislation doing just what the Northern Territory government wanted? How can the minister stand by and allow this to happen?3859Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I reiterate what I said previously. Yes, I am aware. There has been ongoing debate and discussion between the Northern Territory government and the Commonwealth government as to which is the best way of managing those areas. As I said before, rest assured that we will do what is best in the best interests of people who wish to visit that beautiful area.38593859Mackay, Sen SueSenator MACKAY9L6TASALP00—My question is directed to the Minister representing the Minister for Health and Aged Care. Is the minister aware that in February this year a spokesperson for Minister Newman advised that a second offer had been made by the federal government for Medicare funding of Tasmanian health services and that this was a better offer than the first offer made on 29 July 1998? Can the minister now confirm that this statement from his ministerial colleague was incorrect in that the second offer did not contain the $14.8 million in additional health funding nor the $6.5 million of national development funds as was promised to the Rundle Liberal government in the first offer?3859Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—I thank Senator Mackay for the question. I understand that in August 1998 all states and territories except Western Australia and Tasmania signed the Australian health care agreements with the Commonwealth. The agreements were reached and they covered public hospital funding arrangements for the following five years.9L6MACKAYSenator Mackay—That is not the question.VW4Senator HERRON—Madam President, I have had about 30 seconds and Senator Mackay says that I have not answered the question. Madam President, I would appreciate it if I was given the opportunity to answer the question rather than have these spurious interjections.10000PRESIDENTThe PRESIDENT—Just ignore the interjections, Minister.VW4Senator HERRON—Thank you, Madam President. Tasmania and Western Australia were then not participating in the reform agenda reflected in the agreements and so they apparently tried to renegotiate the structure with the Australian government. The national health development fund would provide Western Australia with $23 million and Tasmania with $6.5 million over the next five years. The minister urged the West Australian and Tasmanian governments to sign the agreement without further delay. That is the situation as it exists today.3860Mackay, Sen SueSenator MACKAY9L6TASALP00—Madam President, I ask a supplementary question. Minister, you may be aware that the Tasmanian government has in fact given up and was forced to sign in relation to the broken promises made by this government. In light of this further broken commitment to the Tasmanian community, can the minister confirm that the initial offer made to the Rundle Liberal government was a state pre-election bribe? Can the minister confirm that the Prime Minister never formally withdrew the first offer that he made? Isn't this just another example of this government's complete disregard for honouring promises made to the people of Tasmania?3860Herron, Sen JohnSenator HERRONVW4QLDLPAboriginal and Torres Strait Islander Affairs10—Madam President, as Senator Mackay knows, it is the state governments' responsibility to deliver health care. They were made an offer, and they signed the agreement. They cannot in retrospect say that they were dudded in any way. They cannot in retrospect say that there was some sort of conspiracy—that a higher amount was offered previously, because the offer was made, it was accepted, it was signed and it is their responsibility. I can quote Senator Ray on this—the states are always crying that they have been dudded, that they have not been given enough funds for health care. The reality is that they signed a five-year agreement, and they are supposed to stick to that agreement. If there is any further information that I can get from the minister, I will provide it to Senator Mackay. I will approach the minister to see if he has anything further to add to the answer I have already given.38603860Ferris, Sen JeannieSenator FERRIS5L6SALP10—My question is to Senator Newman, the Minister for Family and Community Services. Our government has an outstanding record in ensuring all Australians have the opportunity to live well in retirement. Will the minister explain how the changes to superannuation and to family law are fair to both men and women?3860Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I am glad Senator Ferris asked this question, because the changes that have been made to superannuation entitlements since this government came to office have been very important to both men and women. In particular, a number of measures were long overdue and had not been picked up, as they should have been, by the previous government. We have taken unprecedented steps to reduce the social and the economic costs of marriage breakdown and to assist those who are divorcing to settle their issues and to resume their lives constructively. Everybody understood that there was a desperate need to do something in this area, but Labor was not able to do anything about it.On 30 March I announced changes to increase the flexibility of superannuation for couples facing marital breakdown. These reforms are long overdue and only our government has had the commitment to act in this important area. Under current arrangements, superannuation accrued by one member of a married couple is locked away in his or her name. It is a fact that women today are less likely than men to be supported by private income in their retirement, and women who receive superannuation typically receive less than their male counterparts. As we speak today, only seven per cent—Senator Sherry interjecting—BE4Senator NEWMAN—Madam President, I am being sledged again. Would you please try to do something about the people on the other side, who do not seem to be ever pulled up. I am sick and tired of what I call male sledging.10000PRESIDENTThe PRESIDENT—Order! Senators on my left will cease interjecting.BE4Senator NEWMAN—I would suggest that it is about time some of them were named, Madam President. As we speak today—Opposition senators interjecting—10000PRESIDENTThe PRESIDENT—Order! Senators on my left will cease interjecting.BE4Senator NEWMAN—Only seven per cent of female age pensioners have incomes from superannuation compared with 14 per cent of male age pensioners. The government's changes will enable couples to agree to share their superannuation in whatever proportion they wish, or for the Family Court to share superannuation and for superannuation trust funds to put this into effect.It is important to understand that these reforms will not require that superannuation be split on a fifty-fifty basis, or any other set proportion. Where parties cannot agree, the Family Court will divide superannuation on a fair and an equitable basis. The court takes into account factors such as responsibilities for children, income, property, financial resources and capacity to earn future income. These reforms benefit men and women alike, and I am very pleased that there have been supportive comments from both men's and women's groups about these changes. They recognise that this issue was dodged for all those Labor years.Too often, the inflexibilities of the current law lead to decisions that are in neither men's nor women's interests. Typically a spouse who had been a full-time parent for much of the marriage is left on divorcing without access to the bulk of retirement savings built up by the couple during that marriage. Equally, partners with superannuation have no choice but to trade off other property and are left without financial resources until they retire, and that is a no-win situation.Under the government's reforms, divorcing couples will be able to agree to split their superannuation in ways which best meet the current and the future needs of both parties. These important changes will provide more flexibility and choice when people divorce by unlocking the inflexibility of the current superannuation law. It allows parties more choice in how to deal with their retirement savings, and that reflects the government's commitment to protecting the retirement living standards of older Australians.In many areas this government has moved to help women have access to private income on retirement through increased involvement in the work force, through the female dominated workplaces where women are likely to have certified agreements which cover superannuation—67.9 per cent compared with 46.4 per cent in workplaces with a low proportion of women. Contrary to the misleading report ing of the opposition recently, women's earnings are growing at a faster rate than men. (Time expired)3861Ferris, Sen JeannieSenator FERRIS5L6SALP10—Madam President, I ask a supplementary question. I wonder whether the minister could further explain how the flexibility of our new policy will assist both the men and the women in the community.3861Newman, Sen JocelynSenator NEWMANBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—I would be delighted to continue and to make sure that people understand what measures this government has introduced to make it fairer. For example, the government has introduced an 18 per cent income tax rebate for the contribution spouse for savings and contributions of up to $3,000 a year to the superannuation fund or retirement savings account of a low-income spouse. Through those retirement savings accounts, women can also accumulate financial resources for later life. Workers can now have longer to accumulate an adequate income by continuing to contribute to super well past the age of 65. That is particularly important for those who have had breaks from the labour force due to caring responsibilities.We have introduced the Commonwealth Seniors' Card expansion from 1 January. We have remained committed to a robust safety net for age pensions and have guaranteed it at at least 25 per cent of male average weekly earnings. (Time expired)38613861Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—My question is to Senator Ellison representing the Minister for Finance and Administration. Can the minister confirm that the government is planning to sell its IT Secure Gateway environment? What is the reasoning behind this decision? The SGE is the information security system which provides secure transfer of data not only between government departments but between the Commonwealth government and the rest of the world. How does the government justify selling to the highest bidder the IT central nervous system of government information? How does it propose to protect the public and national interests in the continuing security of government information?3861Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I will take that question on notice and get back to Senator Bishop.3862Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—Madam President, I ask a supplementary question. Whilst the minister is taking that question on notice, could he also advise: who will take responsibility if, after the sale, critical government information networks are penetrated?3862Ellison, Sen ChrisSenator ELLISON9X5WALPSpecial Minister of State10—I will take that question on notice as well and get back to Senator Bishop.LD4ALSTONSenator Alston—Madam President, I ask that further questions be placed on the Notice Paper .Questions Without Notice3862386215:01:003862Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—I move:That the Senate take note of the answers given by the Minister for Communications, Information Technology and the Arts (Senator Alston), to questions without notice asked today.One of the worst kept secrets around this building is that Senator Alston sees himself as the future leader of the government. After the performance of the last two days as acting leader, one thing is for certain and that is that Senator Robert Hill has got nothing to worry about from the doormat Senator Alston—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order! I cannot hear. Senator Forshaw, would you resume your seat for a moment, please. There is far too much noise, far too many conversations going on, on my left and on my right. If you are planning to leave the chamber, please do so speedily and quietly. If you want to hold a conversation, please resume your seat or go outside. Thank you very much.656Forshaw, Sen MichaelSenator FORSHAW—As I was saying, Senator Robert Hill has got nothing to worry about in terms of Senator Alston, after his performance of the last couple of days. Here we have a person who supposedly prides himself on being across his brief, yet we saw him today fumbling around at the table, and he could not answer one straightforward question. He was asked at least four or five questions on issues that he should have been across, and he fumbled around and could not answer one. He could not even answer a dorothy dix question from Senator Gibson.Senator Alston usually adopts the attitude in this chamber of throwing insults at everybody all of the time. But, when put to the test as acting leader, he has failed miserably. I am reminded of the words of the Premier of Victoria, Jeff Kennett, who does not have much time for his Victorian colleagues in this parliament—people like the Treasurer, Mr Costello, and certainly people like Senator Alston. I recall that on one occasion Jeff Kennett had a particular name for Mr Costello, and that name was `dog'. That was what he referred to Mr Costello as.I note that, on the spellcheck on the computers in this building—and I invite honourable senators to look this up if they have not already noticed—every time I type `Alston' into the computer, it does not recognise the word. It actually suggests, as an alternative, the word `Alsatian'. Maybe Jeff Kennett has got it right. What we have seen here is a real dog of a performance by Senator Alston in terms of dealing with the very important issues that were raised by opposition senators in questions today. For instance, Senator Cook asked Senator Alston a question about the impact of the GST upon pensioners.5K4FAULKNER Senator Faulkner—A good question.656Forshaw, Sen MichaelSenator FORSHAW—A very good question. Clearly, this government has got absolutely no idea about what the impact of its proposal will be on pensioners but at the same time refuses to accept the very clear evidence given to the Senate committees that the GST will seriously erode, over time, the level of pensions for people in this country.We have a tax policy from this government that is based upon two principles. One is to talk continuously about averages—not about real families, not about real Australians, not about real pensioners, but about the impact on `average families'. Senator Alston, all through his answer—not knowing the detail, not understanding his brief, fumbling around— resorted to talking about `the average family'. What the evidence shows is that real families and real pensioners will suffer.The second principle that this government pins its GST policy on is that this is a policy that requires compensation. You have to ask yourself a fundamental question: if you have to provide compensation for the imposition of a new tax, then it must be bad from the outset. What the evidence given to the Senate committee also shows is that two million Australians will be seriously and deleteriously affected by the introduction of a GST. Of course, this is a government that does not really care about those two million Australians. This is a government that talks about `average families', that comes into this Senate and gives information based upon even fictitious families. We all remember the Wright family—a creation of the previous minister.NB5CAMPBELLSenator George Campbell—We have got the wrong senator.656Forshaw, Sen MichaelSenator FORSHAW—Yes—the Wright family and the wrong senator. What is absolutely clear is that the government has got the wrong person as acting leader at the moment, and I doubt whether he will be there for much longer.At the same time as this government is introducing a policy that will seriously affect over two million Australians—particularly the low paid and those such as pensioners who depend upon fixed incomes for their livelihoods—they put in excess of $80 a week into the pockets of wealthy Australians. (Time expired)15:06:003863McGauran, Sen JulianSenator McGAURANWH4VICNP10—I join this debate yet again. We have already had four committees, meeting for four months. That is a total of 52 weeks. We now have a six-week debate, minimum, in the Senate on the tax reform package—even though the government took the matter to the election. We are confident that we have a mandate, so we are going to bed down for this very long, endless debate over the same issues. We know you are fixed on your position and we do not expect you to change. We know that this issue really comes down to the two Independent senators, and thank goodness for them. They happen to have the sense and balance that neither the Democrats nor the opposition have. You have traded your way out of this game. You are irrelevant to this debate. You get a bit of air time on this debate by taking note of answers, one of the most futile exercises in this place—AW5CARRSenator Carr—Why are you here so often?WH4McGauran, Sen JulianSenator McGAURAN—I do not know why this was ever introduced. When I first came to the parliament, Senator Carr, this taking note of answers was never part of the standing orders, never part of the procedure. Somehow, in that spell I took between 1990 and 1993, this irrelevant debate after question time has made its way into standing orders. I guess for oppositions it is an opportunity to speak their mind. The truth of the matter is that, in this debate, you are irrelevant, and you are going to be irrelevant for the next six months.Senator Forshaw, enjoy your attacks on Senator Alston, as pathetic as they are, because this is the only airplay you are getting. You are not getting it in the media and you are not getting it out in the community. Quite frankly, you are not going to get it when the vote comes. At the end of the day, this tax reform is going to get through for two reasons. We would be willing to take this to another election, if you want, and we will be taking this to the wall. We are not changing this tax reform package at all. We took it to one election and we got the mandate. As far as I am concerned, I would be happy to take it to another election. We are not backing down on this.Opposition senators interjecting—WH4McGauran, Sen JulianSenator McGAURAN—You may laugh, but I do not get the opportunity to have such powers, Senator Carr. I will be the first to admit that, but that is the feeling on this side of the parliament. We are determined to push through this tax reform because we won an election on it. For that reason, as I said, we are bedding down on this debate. We are not budging, and most of all we are not budging on the food issue. Be well sure of that. It is not just because we are stubborn in our idealism and in our belief in the package. We know that when you introduce such big tax reform that it is very difficult to digest. But you know as well as we do that food is the biggest area for revenue. It is the GST. It is the broad based area; the rest is irrelevant. We have our exemptions in health and education. You cannot pull food out. If you do, you may as well forget introducing the GST.Senator Forshaw interjecting—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order, Senator Forshaw! Senator McGauran, it would help if you addressed the chair. Senator Forshaw, you have already had your five minutes. I would appreciate it if you would refrain from further interjections. You know they are disorderly. Some of your colleagues are not much better but you have been the noisiest so far.WH4McGauran, Sen JulianSenator McGAURAN—Absolutely. Madam Chair, I commend you on taking charge of this unruly debate.AW5CARRSenator Carr—Pity you couldn't take charge.WH4McGauran, Sen JulianSenator McGAURAN—Senator Carr never misses an opportunity. He is my black knight. Senator Carr is quite right that I do take advantage of this take note of answers issue more often than I should. Next time you decide to stay in the chamber, as you always do, I am going to pull out of my top drawer what you did to the state of Victoria, as written by the former Premier, John Cain.Senator Carr interjecting—WH4McGauran, Sen JulianSenator McGAURAN—It is not irrelevant. I know you have been out of office for a long time in Victoria but that legacy is still with us. The politics of the Victorian Labor Party is still with you. You are divided; you are an absolute mess in Victoria.Senator Carr interjecting—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Order, Senator Carr! That is enough interjecting from you. Senator McGauran, you might like to vaguely address the motion to take note of answers. You are a bit off the track.WH4McGauran, Sen JulianSenator McGAURAN—If I have wandered off the subject, I am sure, given the opportunity over the next six weeks, I will be able to get onto it—and I will. In the days to come, I want to return to the government's compensation package for pensioners, to the concessions that the government has made for local government, and to the benefits of the tax package for rural and regional Australia.15:12:003864Quirke, Sen JohnSenator QUIRKEZS6SAALP00—I will respond very quickly to what Senator McGauran said. It does not take long to respond to what he says. He threw out the challenge when he said that he was happy fighting the election last year, fighting the good fight, and that he wants to do it again. When he made that comment, you should have seen the jaws drop on the handful of government senators over there. They were not exactly enthusiastic about this challenge that was thrown across the chamber. They don't have a piece of paper in the drawer which guarantees them one of the first few seats in there.Senator McGauran is a good-hearted bloke and I quite like him—he serves on some of my committees—but I have to say, `Senator McGauran, you should've seen the faces of your colleagues.' More importantly, when your colleagues listening to the TV or listening to the radio heard that they would have choked on their cup of tea.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Senator Quirke, could you address the chair.ZS6Quirke, Sen JohnSenator QUIRKE—All right. Madam Chair, I think good old Senator McGauran threw out the challenge today but I suspect that it will not be picked up. That is just my view. I am not a betting man—as most people know, I am a bit of a wowser—but I will bet a few bucks that we will not hear too much more about that one.I am pleased that Senator Alston is in here for this debate. When I was watching him about question seven or eight he could not get out of his seat quick enough. I thought he had to leave the room. I was not sure what was going on. But he wanted question time over and done with as soon as the one hour came up. In fact, yesterday, we were short-changed 40 seconds of question time.I must remonstrate with my colleague Senator Forshaw over there. Senator Forshaw made some unkind remarks about Senator Alston's performance over the past few days. I judged it as five out of 10 yesterday and four out of 10 today, but it is only his second day in the job. He was asked some very difficult questions. In fairness to Senator Alston, it is very hard when you are asked detailed questions about GST on pensions and that sort of stuff. I have listened to government senators get up and tell me that they are going to tax the living daylights out of the taxpayers, whether they be old, young or whatever, and that somehow or other everyone is going to be better off. I have listened to this for some time and I am honestly admiring quite a number of those opposite who have been able to keep a straight face. In fact, Senator Tierney almost ruined it yesterday.ZW4SHERRYSenator Sherry—He did ruin it.ZS6Quirke, Sen JohnSenator QUIRKE—I must say to Senator Sherry that it was not one of Senator Tierney's better interviews for the sake of the government, and I do not think he will be knocking on the door for one of those possies that the Prime Minister hands out for a little while. But, at the end of the day, over there they have generally kept a pretty good, straight face. I asked a question today about Mark Textor and I must say that the answer I got was exactly what I expected from Senator Alston. As the president of the Senator Alston fan club on this side of the Senate—ZW4SHERRYSenator Sherry—You'd be the only one.ZS6Quirke, Sen JohnSenator QUIRKE—No, no. I know you are barracking for Senator Herron and others; I understand that, Senator.ZW4SHERRYSenator Sherry—Senator Minchin!ZS6Quirke, Sen JohnSenator QUIRKE—No; no-one is barracking for Senator Minchin. He is very effective; we do not want Senator Minchin. We know that on this side there is an argument about who should really sit in that seat. My vote and the votes of my colleagues that I can influence will be for Senator Alston. We are sick of the knife being put in by Senator Hill. The argument for us as to who is going to get the Eric Abetz award for the best person to sit in the seat—an `Eric' being the Senate equivalent of an Oscar—10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—Would you please refer to senators by their correct name, Senator Quirke.ZS6Quirke, Sen JohnSenator QUIRKE—Senator Eric Abetz. It is an award, an Eric; and at this stage I think, as the president of Senator Alston's fan club, that he is in the running for this week's Eric. I have got to say that, straight up and down. It is very close. Senator Kemp has tried in very difficult times, and I noticed that some of his own people asked him questions today to try and boost his profile, but at this stage I think Senator Forshaw is too hard on Senator Alston. (Time expired)15:17:003865Eggleston, Sen AlanSenator EGGLESTON4L6WALP10—What an incredible little piece that was from Senator Quirke. When Senator Forshaw criticised Senator Alston's leadership, I must say that I went back to the days when I first came in here, three years ago or thereabouts, and the opposition looked like a beach wrecked after a cyclone. They were defeated, devastated, demoralised and depressed and they had nobody left with any ability. The only person that they could come up with as a leader was Senator Faulkner.The only man with any talent on the opposite side of the Senate chamber is Robert Ray, and he sits up on the back bench because he knows that the talent that we have got on this side of the chamber, led by Senator Hill and Senator Alston, is just the beginning of the talent team we have to go on through the ranks year by year with an endless series of highly qualified, highly talented replacements. It means that, from Senator Ray's point of view, there was no point at all in being on the front bench, because he knew that when Senator Alston got up and put his foot up on the bench and mowed you down across the chamber you people would not have a hope. And you will not have a hope of making any progress in this chamber while we have got people here of the calibre of Richard Alston speaking for us.Let me take up some of the other points that Senator Forshaw made in his rather sad and miserable little speech. Senator Forshaw says that we have no understanding of the impact of this wonderful tax package on pensioners. Goodness me! That is an amazing statement for someone to make who comes from a party that increased wholesale sales taxes in the most dramatic way in 1993 and gave not one iota of compensation to pensioners. If any party does not understand the impact of higher wholesale sales tax on pensions and pensioners, it has to be the ALP: the people who claim to represent the poor and underprivileged of this country offered no compensation whatsoever to pensioners.But what have we done? The government has come up with a tax package which provides an enormous amount of compensation to the poor and underprivileged of this country, with guaranteed—ZW4SHERRYSenator Sherry—Not according to Senator Tierney.4L6Eggleston, Sen AlanSenator EGGLESTON—Well, we have guaranteed a four per cent increase in pensions across the board, to compensate for any unlikely increase in the cost of living and food which a goods and services tax might bring. That four per cent increase will apply to social security recipients, students on Commonwealth income support, and child disability allowance and mobility allowance recipients. Pensions will not be allowed to fall below 25 per cent of average weekly earnings. We are going to reduce the taper rate from 50 per cent to 40 per cent. Overall, pensioners are going to be well compensated and well looked after by this government with its tax package; whereas, when you introduced wholesale sales tax increases of a massive kind six years ago, nothing was done to compensate the pensioners or the poor and underprivileged.What about the rest of the community? We are offering benefits across the board. Let us talk about the positives. We are offering $13 billion in tax cuts that are going to provide more spending power to average Australians. Average Australians are going to find that their tax comes right down and that their spending power is much increased. Business is going to benefit, which is going to bring more jobs, and—ZW4SHERRYSenator Sherry—Small business will love it. 4L6Eggleston, Sen AlanSenator EGGLESTON—Small business will be one of the most important beneficiaries. They are going to find that they have a simpler tax system.ZW4SHERRYSenator Sherry—How is it simpler to collect the GST?4L6Eggleston, Sen AlanSenator EGGLESTON—Because they are going to have to just fill in a return once a quarter and it will be much easier for them to work out what their tax will be than under any system that you people have held onto over the years. One of the great objectives of this tax reform is a simpler system, and that is what we will bring. We will bring a stronger economy, we will bring tax cuts for families, and we will do it under the leadership of great senators like Richard Alston.15:23:003866Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—I seek to speak on the motion to take note of the answers given today by Senator Alston. All I can say in opening is bring back Robert Hill. Somebody send a fax to New York and get him back here. At least when there are dorothy dixers to Robert we get some intelligent responses that provide us on this side of the chamber with a little bit of information. It is not often that we get much information from ministers' answers on that side. We get the usual waffle from Senator Kemp, the usual hyperbole from Senator Alston and the usual rambling by Senator Ian Macdonald about big trucks and so forth. But at least with Robert Hill, the Leader of the Government in the Senate, you usually get some reasonable answers and a smattering of information.There was some talk today in question time in a number of answers by Senator Alston about the average Australian family. Let me say to this chamber that the performance in the past two days by the acting Leader of the Government has been pretty average. He would understand the meaning of average. If he goes back and plays the tape of question time and has a look at his performance, he will understand what the meaning of average is. He performed well below the line in terms of what average is.It has been said, and it is well known around the communications industry in this country, that we have a pretty average com munications minister, that he is not up to the portfolio and that he does not understand the issues. In fact he is well known for constantly engaging his tongue when his brain is in neutral.10000DEPUTY PRESIDENTThe DEPUTY PRESIDENT—You are not reflecting upon an honourable senator, are you, Senator?NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—I am not reflecting; I am just repeating what the common knowledge and talk is in the communications industry about the minister for communications. This is all well known in terms of his performance in that area. That was demonstrated clearly again today in Senator Alston's response to the question from Senator Quirke about Pangea and the role of Mark Textor in providing research for that company. Senator Alston, in response to Senator Quirke's question, got up and tried to defend Mark Textor's performance as a pollster.Let us look at what was said on the Four Corners program last night, because I think it is pretty important to understand the difference in the views of people on that side of the chamber, particularly people in leading positions:The company wanting to build a nuclear waste dump in Western Australia says polling shows 35 per cent of Australians think it is in the national interest.Pangea has told the ABC's Four Corners program, the survey costing $250,000 was carried by Liberal Party pollster Mark Textor.It also found that 25 to 28 per cent of people think the dump would not be in Australia's interest, with the remainder merely asking the question why.However, Federal Resources Minister Nick Minchin—Senator Minchin, who sits directly behind the Leader of the Government in this chamber—has told Four Corners he does not trust the figures.`I've been involved in the professional side of the Liberal Party for 14 years,' Mr Minchin said.`I did a lot of polling myself. I'd have to say I know all the tricks of the trade and I know you can get any result you like depending on the way you ask the question.'In other words, Senator Minchin is calling into question the veracity of the polling carried out by Mark Textor on behalf of this company. But did Senator Alston do that when he got up in question time? No. On being questioned about it, he got straight to his feet and went straight to the defence of Mark Textor without any questioning at all in terms of the issues that were raised. It was not so with Senator Minchin. Senator Minchin is much more intelligent than that.It is quite clear from the performance of the past couple of days in this chamber that Senator Alston has lost it. He has lost total confidence in his ability to handle questions in this place and clearly he is not up to the leadership in this chamber. I draw the attention of the chamber to something that was in the Sydney Morning Herald a few months ago when they did a survey of the cabinet ministers in this government. It ran through their likes, their dislikes and their hobbies. Senator Alston put down that his hobby is pumping iron. One would have to question whether or not the steroids have got to Senator Alston's brain. (Time expired)15:28:003867Lightfoot, Sen PhillipSenator LIGHTFOOTWP6WALP10—I rise to speak on the motion to take note of the questions and answers with respect to the issue involving Pangea, particularly to add to or rebut, as the case may be, that contribution by Senator George Campbell. Let me make one thing as abundantly clear to the Senate chamber as I can: neither the Prime Minister nor the minister for resources, Senator Nick Minchin, nor the Premier of Western Australia has said that they want a nuclear waste repository in Australia or in Western Australia. The opposite is true. The three people who control any ingress or egress with respect to imports and exports have said that will simply not happen. It is simply not an issue. My view is that, as time goes by, we may have to revisit that. But that is only my view.AW5CARRSenator Carr—Do you support it?WP6Lightfoot, Sen PhillipSenator LIGHTFOOT—No, I do not; I support the view of the Prime Minister, the view of Senator Nick Minchin and the view of the Premier of Western Australia that it will not happen. The upshot of this is that nuclear waste will probably go to countries other than those where it is now. It is now in the UK, Switzerland, North America and France—which produces 80 per cent of its power from nuclear. And those countries do not have the geological stability that Australia has.One could say, `That is fine, as long as it is not in my backyard.' But I wonder just how far away are East Timor, Indonesia, New Guinea, Vanuatu or any other islands or independent nations throughout this world that can make up their own minds what they take and what they export. Is that then in our backyard? No, it is not, but it is only just across the fence. Are those countries geologically stable? No, they are not. Are they politically stable? No, they are not. It is not an issue that you can dismiss out of hand for ideological reasons.I support what the Premier of Western Australia has said, but it does not resolve the issue. In this global village in which we operate we have a responsibility as the country with the greatest reserves of uranium in the world to seek a solution to the enriched uranium and low-grade plutonium that is highly toxic which is deposited in areas around the world as a result of our exports. This needs to be resolved.ZW4SHERRYSenator Sherry—You would put it here? Is that what you are saying? Are you putting it here?WP6Lightfoot, Sen PhillipSenator LIGHTFOOT—Senator Sherry asks rather incoherently—and I expect better than that from him—`Would you put it here?' What does he mean? Does he mean somewhere on the three million square miles of stable country in Australia? I do not know what he means by that. Does he mean in Tasmania, his particular bailiwick? I do not know what he means, but he has an opportunity to answer this. The issue is far wider than the NIMBY—not in my backyard—approach. It is far wider than that. We export 16 per cent of the world's uranium. We could have exported much more than that had we not had the abortive three-mine—or effectively, two-mine—policy introduced for ideological reasons by the Hawke government. We would have had a greater share.Did it stop the export or use of uranium? Of course it did not. All it did was make the Rossing mine in Namibia the biggest uranium mine in the world; it made Canada, with 10 per cent of the world's deposits, the biggest exporter of uranium in the world; and it made Australia, with 30 per cent of the world's uranium deposits, one of the smallest, in terms of its recoverable reserves, with 10 per cent of exports. But it did not stop the export of uranium or the supply of U308 to nuclear power stations. It had the other effect, in fact: they grew during that period, as they are indeed growing now, as they are growing in Japan and China and as they will grow in any other part of the world that has smokestack industries which are contributing to the greenhouse effect.Nuclear power happens to be one of the most green and friendly ways to produce electricity in the world. It does not emit gases or, if it does, they are of an innocuous nature. I am not talking about radiation. I understand radiation; I have lived with it and worked with it for some years in exploration. It is a far bigger issue than `not in my backyard, thank you'. We do operate in a global village and we must take responsibility at some stage for waste created by our exports of uranium. (Time expired)Question resolved in the affirmative.386810001CLERK ASSISTANTThe Clerk—Petitions have been lodged for presentation as follows:386881LI4Patterson Sen KayTo the Honourable the President and members of the Senate in parliament assembled.The petition of the undersigned citizens of Australia draws to the attention of the Senate the need for changes to the Family Law Act of Australia and to the Child Support Scheme.Your petitioners therefore request that the Senate support the following changes:1. That the existing Family Law Act be scrapped and replaced by a more simplified version together with the minimum of rules and regulations necessary.2. That The Family Court be replaced by a Tribunal and that all matters resulting from divorce and family breakdown be heard before, and determined by a panel, the panel to be made up of persons qualified in matters arising from family breakdown. 3. That legal professionals be barred from appearing before the Tribunal resulting in vast savings to the disputing parties.4. That a modified fault clause be re-introduced to Family Law primarily designed to discourage adultery and to stop rewarding adulterers at the expense of deserted and innocent parties.5. That the Child Support Agency be scrapped and replaced by an appropriate administrative procedure within the Tribunal.6. That apart from cases of exceptional circumstances parental-child access become the inalienable right of all parents.7. That alternative counselling, (Government funded) be made available through the Churches and that much more emphasis be placed on mediation in resolving disputes prior to the commencement of legal proceedings.Senator PattersonLI4Senator Patterson(from 81 citizens)3869471X4West Sen SueTo the Honourable the President and Members of the Senate in Parliament assembled:The petition of the undersigned shows that a GST will impact adversely on community and charitable organisations. These organisations help those in our community who are most in need, and the introduction of a GST will result in a reduction of services for those people who can least afford it.Your Petitioners request that the Senate exempt community and charitable organisations from the GST.Senator West1X4Senator West(from 47 citizens)3869255BX5 6H4 ZW4Gibson Sen Brian; Harradine Sen Brian; Sherry Sen NickTo the Honourable the President and Members of the Senate in Parliament assembled:The petition of the undersigned shows that citizens of Tasmania think that the government's taxation package, including the goods and services tax, does not provide sufficient information nor detail and hence is open to inequitable application during its implementation.Your petitioners ask/request that the Senate should not pass the legislation until the following questions are resolved fairly and equitable for the citizens of Tasmania:1. How will the government ensure Tasmania is treated fairly in comparison to the more affluent and larger States? Tasmania, on a per capita basis, has the highest unemployment, lowest average weekly wage, the oldest population, the greatest number of people dependent on government income support and the most decentralised population of any state of Australia. The government's model for estimating the cost of the GST does not allow for the different economic and social patterns between states.2. How will the government ensure families can afford good food which will be relatively more expensive in respect to `junk' foods whose price will decrease after the removal of sales tax? Tasmanians pay the highest costs for food in Australia and are among the worst health status population in Australia.3. How will the government ensure that organisations and charities can continue to provide the necessary community services and support to disadvantaged citizens? Community organisations and charities in Tasmania will face a double jeopardy from the implementation of the Tax Package. It is predicted that poverty in Tasmania will increase and more people will be seeking extra assistance. At the same time organisations will have a reduced capacity to meet those needs because of increased administrative costs associated with compliance and in many instances reduced revenue because of the application of the tax to such things as membership fees and fund raising.4. How will government ensure that service quality and scope of education, child care and health services can be maintained without increasing the costs of these services? The government proposes that essential services such as education, child care and health will be GST free. However, community based organisations offering these services will have increased costs arising from the extra administration and accounting requirements of the tax package.Senator GibsonBX5Senator Gibson(from 85 citizens)Senator Harradine6H4Senator Harradine(from 85 citizens)Senator SherryZW4Senator Sherry(from 85 citizens)Petitions received.Notices38693869Senator Ian Campbell to move, on the next day of sitting:That the following bill be introduced:A bill for an act to amend the Broadcasting Services Act 1992, and for other purposes. Broadcasting Services Amendment (Online Services) Bill 1999 .Senator Ian Campbell to move, on the next day of sitting:That the following bill be introduced:A bill for an act to amend the Copyright Act 1968, and for related purposes. Copyright Amendment (Computer Programs) Bill 1999 . Senator Brown to move, on the next day of sitting:That the Senate congratulates Yvonne Margarula and Jacqui Katona for winning a 1999 Goldman Environment Prize, as leader and spokesperson for the Mirrar people, for their campaign to stop the Jabiluka uranium mine.Senator Ian Campbell to move, on the next day of sitting:That the following bill be introduced:A bill for an act to amend the Migration Act 1958, and for related purposes. Migration Legislation Amendment (Temporary Safe Haven Visas) Bill 1999 .Senator Brown to move, on the next day of sitting:That the Senate—(a) notes the statements by the Minister for Industry, Science and Resources (Senator Minchin) on the Australian Broadcasting Corporation program `Four Corners' that, `We're not interested in nuclear power and we're not interest in being the world's nuclear dump,' and that, `Australia won't be that nation that accepts the waste'; and(b) congratulates the Government on this decision not to allow an international nuclear waste dump in Australia like the one proposed by Pangea.Senator Calvert, at the request of Senator Chapman, to move, on the next day of sitting:That the time for the presentation of the report of the Parliamentary Joint Committee on Corporations and Securities on the provisions of the Corporate Law Economic Reform Program Bill 1998 be extended to 29 April 1999.Senator Calvert, at the request of Senator Allison, to move, on the next day of sitting:That the time for the presentation of the report of the Environment, Communications, Information Technology and the Arts References Committee on its inquiry into the powers of the Commonwealth in environmental protection and ecologically-sustainable development in Australia be extended to 27 May 1999.3870Motion (by Senator Crossin) agreed to:That general business notice of motion no. 187 standing in the names of Senator Crossin and Senator Woodley for today, relating to mandatory sentencing laws in the Northern Territory, be postponed till the next day of sitting. Motion (by Senator Margetts) agreed to:That general business notice of motion no. 188 standing in the names of Senator Margetts and Senator Brown for today, relating to the government's wine equalisation tax proposal, be postponed till the next day of sitting.Motion (by Senator Sherry) agreed to:That general business notice of motion no. 184 standing in the name of Senator Sherry for today, relating to comments made by the Prime Minister concerning income tax, be postponed till the next day of sitting.Motion (by Senator Bartlett, at the request of Senator Bourne) agreed to:That general business notices of motion no. 144 (relating to the 50th anniversary of the Chinese invasion of Tibet) and no. 147 (human rights abuses in China and Tibet) standing in the name of Senator Bourne for today, be postponed till 25 May 1999.Motion (by Senator Brown) agreed to:That general business notice of motion no. 178 standing in the name of Senator Brown for today, relating to superannuation pension benefits for members of parliament, be postponed till 29 April 1999.Motion (by Senator O'Brien, at the request of Senator Bolkus) agreed to:That business of the Senate notice of motion no. 1 standing in the name of Senator Bolkus for today, relating to the reference of matters to the Legal and Constitutional References Committee, be postponed till the next day of sitting.Documents387038703870Bartlett, Sen AndrewSenator BARTLETTDT6QLDAD00—by leave—I move:That the Senate take note of the document.I seek leave to continue my remarks later.Leave granted; debate adjourned.Business38703870Motion (by Senator Ian Campbell) agreed to:That the provisions of paragraphs (5) to (7) of standing order 111 not apply to the National Health Amendment Bill (No. 1) 1999, allowing it to be considered during this period of sittings. Miscellaneous3871Motion (by Senator Sherry) not agreed to:That the Senate—(a) notes that: (i) the base for calculation of the superannuation guarantee and the Liberals' new superannuation tax or `surcharge' are substantially different, the latter including most forms of income such as overtime whereas the former excludes many forms of income such as overtime, (ii) the superannuation guarantee still allows some employees to use a base for calculating the superannuation guarantee that is less than the definition of ordinary time earnings, (iii) as a consequence, some employees are receiving superannuation guarantee payments based on incomes less than $73 000 a year (the starting point for the operation of the superannuation tax or `surcharge') but are being assessed for the superannuation tax or `surcharge', and (iv) this unfairness is highlighted by employees at the Pasminco, Roseberry mine operation where the earnings base for superannuation guarantee contributions by the employer is $24 900 per annum but earnings range from $68 000 to $80 000 a year, requiring the payment of the Liberals' superannuation tax or `surcharge' by a significant proportion of the workforce; and(b) urges the Government, at the first available opportunity, to amend the appropriate superannuation legislation to correct this serious and grossly unfair anomaly.Miscellaneous3871Motion (by Senator Margetts, and also on behalf of Senator Stott Despoja and Senator Forshaw) proposed:That the Senate—(a) notes, with concern: (i) the decision by the Minister for the Environment and Heritage (Senator Hill) to give environmental approval to the proposed new research reactor at Lucas Heights in Sydney, and (ii) that there is strong community opposition to the construction of a nuclear research reactor in suburban Sydney; and(b) calls on the Government to delay the final decision on this controversial proposal until the tabling of reports on the new research reactor by the Economics References Committee and the Parliamentary Standing Committee on Public Works, and the government responses to those reports.15:45:00The Senate divided. (The President—Senator the Hon. Margaret Reid)31Allison, L. Bartlett, A. J. J.Bishop, T. M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Conroy, S. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. Faulkner, J. P.Forshaw, M. G. Gibbs, B.Hogg, J. Lees, M. H.Lundy, K. Mackay, S.Margetts, D. Murphy, S. M.Murray, A. O'Brien, K. W. K. *Quirke, J. A. Ray, R. F.Reynolds, M. Sherry, N.West, S. M.32Abetz, E. Boswell, R. L. D.Brownhill, D. G. C. Calvert, P. H. *Campbell, I. G. Chapman, H. G. P.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferguson, A. B. Ferris, J.Gibson, B. F. Herron, J.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. McGauran, J. J. J.Minchin, N. H. O'Chee, W. G.Parer, W. R. Patterson, K. C. L.Payne, M. A.Reid, M. E.Synon, K. M. Tambling, G. E. J.Tierney, J. Troeth, J.Vanstone, A. E. Watson, J. O. W.Collins, J. M. A. Heffernan, W.Hutchins, S. Hill, R. M.McKiernan, J. P. MacGibbon, D. J.Schacht, C. C. Newman, J. M.Stott Despoja, N. Alston, R. K. R.* denotes tellerQuestion so resolved in the negative.Notices38723872Motion (by Senator Brown) agreed to:That general business notice of motion No. 150 standing in the name of Senator Brown for today, proposing an order for the production of a document by the Minister representing the Minister for Defence (Senator Newman), be postponed till the next day of sitting.Committees387238723872Motion (by Senator Calvert, at the request of Senator MacGibbon) agreed to:That the Parliamentary Joint Committee on the Australian Security Intelligence Organization be authorised to hold public meetings during the sittings of the Senate, to take evidence for the committee's inquiry into the Australian Security Intelligence Organisation Legislation Amendment Bill 1999, at the following times:Tuesday, 27 April 1999—9 am to 2 pm and 3 pm to 10 pmWednesday, 28 April 1999—9 am to 2 pm and 3 pm to 5 pm.38723872Motion (by Senator Calvert, at the request of Senator Eggleston) agreed to:That the time for the presentation of the report of the Environment, Communications, Information Technology and the Arts Legislation Committee on the provisions of the Radiocommunications Legislation Amendment Bill 1999 and 2 related bills be extended to 29 April 1999.38723872Motion (by Senator Calvert, at the request of Senator Knowles) agreed to:That the Community Affairs Legislation Committee be authorised to hold a public meeting during the sitting of the Senate on 22 April 1999, from 3.45 pm, to take evidence for the committee's inquiry into the provisions of the Health Legislation Amendment Bill (No. 3) 1999. Miscellaneous38723872387215:49:003872Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Gibson, I present additional information received by the Finance and Public Administration Legislation Committee relating to the additional estimates hearings for 1998-99.Committees38723872387215:49:003872O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—On behalf of Senator Crowley, I present further supplementary information received by the Community Affairs References Committee as part of its inquiry into the GST and a new tax system.Miscellaneous38723872387215:50:003872Calvert, Sen PaulSenator CALVERT5F4TASLP10—On behalf of Senator Knowles, who is sitting up the back there and should be doing this herself, I present additional information received by the Community Affairs Legislation Committee relating to the budget estimates hearing for 1998-99.Bills3873r703Billsr667Billsr666Billsr702Billsr699Bills3873r698Billsr664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Billsr761Billsr765Billsr763Billsr764Billsr757Billsr760Billsr758Billsr759Billsr756Billsr7623873Debate resumed.(Quorum formed)15:52:003873Crossin, Sen TrishSenator CROSSIN7Y6NTALP00—I rise this afternoon—as these 27 bills come towards us—to talk about the impact of the GST in two areas: the Northern Territory and education. This was the GST that we were never ever going to have. I hope to prove to you after 10 minutes that, in relation to the Northern Territory—and in some aspects of the Territory, we are the never-never land—this is a tax that is not going to benefit the Territory or one Territorian.We went to the 1998 election on a platform of opposing a GST. It is my intention this evening, on behalf of the Labor Party and the people I represent in the Northern Territory, to stick to that commitment that I gave to Territorians during the last election. It is evident by their vote that Territorians resoundingly rejected the proposals of this government. Nick Dondas is no longer the member for the House of Representatives, Warren Snowdon has been returned and I retained the Senate seat with an increased majority. So we now have only Senator Grant Tambling representing this government. So there is evidence by the way in which Territorians voted at the polls. I heard Senator Crowley mention this morning that, in their evidence, Tasmanians reminded the committee that they rejected this government's proposal and the GST, and that is exactly what Territorians did. Everything we have seen through the Senate inquiry process confirms this.We may need tax reform in this country, but we do not need a 1960s European tax on jobs and the essentials of life. There is no doubt that the GST is an inequitable tax. Those on more than $75,000 a year would get a tax cut of nearly $69 a week or 7.3 per cent whereas for a single person on $20,000 a year the benefit would be only $4.28 or 1.3 per cent. For Territorians, the GST would increase the already high cost of living and lead to a lower quality of life. The compensation package does not take into account the higher costs of living experienced by households in rural and regional Australia.A GST would erode the quality of lifestyle that Territorians now have. The biggest problem faced by people in the Territory is the distance. In some cases, this also includes isolation from major capital cities and from their families. They are isolated from the services that major capital cities offer and from the goods that major capital cities sell but, more particularly, non-Aboriginal people are, by and large, isolated from their extended families. They are isolated from essential services that Australians in other capital cities and on the eastern seaboard in particular take for granted.Much of the evidence that has been presented shows that a GST would further exacerbate the disparity between rural and metropolitan living standards. The impact on prices in rural and remote Australia will be greater than in metropolitan areas. Costs are higher not only because of additional transport costs but also because these costs and margins are spread over smaller volumes and so add more to individual unit prices.Even though diesel fuel prices may fall as a result of the tax reform proposal, the National Rural Health Alliance—amongst others—has argued that it is unlikely that this will fully offset prices and the increases in goods for rural and remote areas. Not all transport is by road. I heard Senator O'Chee this morning talking about getting goods to places around the country in trucks and by road. In the Northern Territory that is not always the case. In the Northern Territory goods are supplied to remote communities by aircraft and on barges by sea. There are doubts whether any savings in the diesel fuel will be passed on to consumers, especially in remote areas, where there is little competition between transport companies.Let us have a look at food in the Northern Territory. Our urban shopping centres already pay 40 per cent more for foodstuffs and groceries than other Australians, and in remote communities this can be as high as 60 per cent more. The high cost of food in the Territory is due to the distance but also to the lack of competition, and this is one area of the GST that is not taken into consideration when we speak about remote Australia. Because the GST is on the retail price of the items, Territorians will be slugged twice: once by paying the higher prices for the item and then by having to pay a 10 per cent GST on that higher price. Currently a range of foods, such as fresh foods, are not subject to the wholesales sales tax. Therefore, fresh foods will be more expensive than they currently are. The Australian Consumers Association has estimated that the increase in food prices will be 8.8 per cent.A survey conducted by the Northern Territory government's health department showed that the price of a basket of vegetables in East Arnhem in the Northern Territory is more than double what you would pay in a southern capital city. If you took a basket of vegetables worth $100 in any capital city, you would be paying $212 for that very same basket of goods in East Arnhem. These are not figures that I have made up; these figures are from a survey conducted by the Northern Territory government's department of health when they did a survey of a basket of goods. Under a GST that $212 basket of vegetables would increase in price. So someone in East Arnhem will pay a goods and services tax on that basket of vegetables and in a southern city they will only pay a minimum increase. A GST on food would also impact on people in rural and remote areas who have limited access to a range of nutritional foods due to a great cost, poorer quality and reduced availability.ATSIC has shown how indigenous households in rural and remote communities in the Northern Territory—and Senator Bolkus spoke about this this morning—already spend between 40 per cent and 54 per cent of their income on food compared to 13 per cent for high income earners. A GST will further increase the pressure on indigenous households. In fact, in their media release of 7 February, ATSIC said:A Goods and Services Tax (GST) is inequitable because of its disproportionate burden on the residents of rural and remote communities, particularly Aboriginal and Torres Strait Islander people—the poorest and most disadvantaged sector of the Australian community.When we go on to look at the impact of that on Aboriginal Territorians, we find that, perhaps with the wholesale sales tax taken off, things such as soft drinks or biscuits and sweets will become cheaper, but fresh foods such as fruit and vegetables will become more expensive. I ask government senators: how can you sit opposite me and tell me that people in the Northern Territory are not going to be disadvantaged, that they are not going to be worse off, when fresh food in remote communities will increase in price? The compensation you are offering them is only four per cent, because by and large the majority of people who live in those remote communities are reliant on CDEP or social security benefits.We know that the health of Aboriginal people is not something that we should be proud of. We know that it deteriorates day by day. How can you possibly tell me that, by making fresh foods dearer and junk foods cheaper, with a minimal compensation package offering only a four per cent increase in social security benefits, these people are not going to be worse off? There is no evidence to suggest that the kinds of people that I am talking about in this country will benefit from this package at all.Let us have a look at the non-indigenous population of the Northern Territory. Already I have said that people in cities such as Darwin and Alice Springs pay 40 per cent more for a basket of goods. There are services that people in the Territory rely on. Air fares is one of them. The price of domestic air fares will increase. People who live in Darwin, Alice Springs and Jabiru and non-Aboriginal people who live in remote communities rely on getting out of the Territory to see extended families. Grandma and aunts and uncles are not 10 minutes down the road; they are six hours flying time away at a cost of nearly $1,200 return for an adult. So you are asking a family of two adults and a couple of kids who decide to relocate to Darwin to work to dip into their pocket to further pay for that service, to pay for that willingness to actually go to remote and rural places of this country. What might have been a holiday down south for the family every two years now becomes a holiday every three years.In their submission the Consumers Telecommunications Network predicted that low income families would be greatly disadvantaged by the impact of the GST, but more particularly they said that people living in remote communities rely on phone services to keep in contact with the rest of the world—with their families, with people down south. It is very hard to just pick up the phone and have a conversation with mum or grandma, because if you are in the Northern Territory, by and large, you are paying an STD rate for that. The Consumers Telecommunications Network says that they:. . . do not accept that the ACCC will be able to ensure the full value of cost savings are passed on to residential consumers. The difficulties that the ACCC has had in identifying the cost of Telstra's network through the process of declaring open access to local areas highlights the complexities that would be involved in such a task.There are also a range of other issues that will affect the Territory. We have had plenty of evidence presented to the Senate inquiry on the GST to confirm that the introduction of the GST would have a negative impact on employment in regional areas, particularly hospitality and tourism and building and construction. These are two of the main industries in the Territory that are probably on the crest of a wave, that we rely on greatly.The Tourism Council of Australia told the committee that I was on that if people flying to Cairns and the Gold Coast and Sydney do not go to Alice Springs, if parts of the Territory are not included in that loop, then we will be severely disadvantaged. Jobs will go in the tourism industry in the Northern Territory. Much of the economic modelling assumed that job losses in some areas will be rectified by jobs created in other industries. Well, we are not talking about major capital cities here that have a sustainable base of millions of people; we are talking about 25,000 people in Alice Springs, and at best 80,000 to 90,000 people in Darwin. It is unlikely that job losses in the tourism industry or construction industry in the Northern Territory will result in people finding jobs in other industries. They will be forced to relocate south or forced to go on the dole and unemployment benefits.In the time that I have left I want to talk about the effects on education, just moving away for a minute from the effects on the Territory, which I could spend much time talking about, having just scratched the surface here. What we have seen in relation to education is that the GST is in fact a tax on learning. The claim that education will be GST free has been shown during the Senate inquiry process to be baseless. This is another attack by this government on the right of ordinary Australians to receive a decent education. The education community has been under siege since 1996 in the context of several years of serious decline in government funding.There are many problems with this bill in the area of education. I seriously urge the government not to go down this path blindfolded, pretending that there is no need for any amendments with respect to education. There are serious flaws in the bill. There is a narrow interpretation of curriculum related activities. The bill talks about educational related activities being GST free if they are linked to the curriculum, but not if they are predominantly recreational. Who is going to determine that? The bill does not say. Is it the Taxation Office? Is it the principal?We had a debate in the committee I was on about whether excursions from, for example, the Northern Territory to the snowfields were education related or purely recreational. As an early childhood teacher, if I take my kids to the movies at the end of the year to see a film about Santa Claus, is it education related or recreation related? If I am taking a group of 30 little kids to a cinema and expecting them to sit quietly and interact with each other in a civilised way—something they would not do with mum and dad because they would be going just with the family—I would argue very strongly that that is education related. But the tax office may say that it is not.Then again, a GST will be payable on food in relation to excursions that have a food component, such as camping excursions, outdoor education or sporting events. What a minefield for the administrators in schools who will have to collect GST for some parts of the excursion but not for other parts of the excursion.We had discussions about what constituted an accredited course. Adult Learning Australia and adult education experts came before us and talked about what we commonly call stream 1000 courses. Stream 1000 courses are called that because of the way in which they are funded. I guess members of the government might call them hobby courses. Yet these courses, as compared to others, will have a GST component in them. I say to the government: rethink that, rethink the logic of that.We heard from an occupational therapist who is doing basket weaving, not because it was a hobby for her but because she translated that skill to her work where she interacts with patients in a hospital. We heard about chefs who did special Thai cooking courses because that is what consumers are demanding in this country now, not because they think it is a hobby. We did hear about people—we did hear about women and young kids who have left school—who re-enter the educational loop via these hobby courses. At least they have jumped back into the learning process. At least they jump back into the lifelong learning system. If that is their only attempt to have another go at obtaining some kind of qualification, some kind of credibility, some kind of worth out of learning another skill or learning a hobby, why tax it?Turning to upgrading skills, there is an inexplicable distinction in the bill between courses to obtain qualifications which are GST free and courses to maintain qualifications which are not GST free. Yet we talk about lifelong learning. We talk about wanting to maintain skills of people in this country, of encouraging people to get not only a diploma but also a degree or maybe their masters. We encourage child-care workers to get a certificate and maybe a bachelor of education. But they are going to have severe barriers put in front of them. There seriously are problems with this bill when you look at the education components.Teacher development is another area. State and territory governments have washed their hands of teacher development. We had that argument years ago. The Professional Teachers Association have picked up the challenge and now offer teachers in-service courses. Teachers pay for those courses themselves and are happy to do so. They are happy to attend those courses on weekends and in the holiday periods. We heard an argument that you can claim them on your tax. They will still be able to do that, but they do not want to pay an extra $8 or $10 for every course they go to. We heard, for example, that primary school teachers are not in just one professional association but are in many—maths, or social education or the Early Childhood Association or a sporting association. So some teachers are going to be involved in multiple associations.There are problems faced by universities. The Department of Education, Training and Youth Affairs, in response to questions, said:Treasury has not undertaken specific modelling of the impact of the ANTS bill on Australian universities.What does that say about Treasury? What does that say about their view of the university sector and the higher education sector? There will be problems faced by universities. There will be problems faced by students, particularly those who do not qualify for the youth allowance.Charges at boarding schools will be GST free. But I have heard from the Isolated Parents Association and people on pastoral and rural properties in the Northern Territory who have said to me, `I want to send my kid to the Northern Territory University or a university down south. I don't want them to board in commercial accommodation; I want them to live in the accommodation that the university provides, but they have to pay GST on that. If they were between the ages of five and 18 and I wanted to send them to a boarding school, then that boarding component is free.' There are people out there who do not understand why a line has been drawn in the sand when it comes to boarding—boarding schools are GST free but you have to pay GST when you board at a university.The last thing I want to say is about GST on books. I do not understand that. There will be many parents in this country who do not understand that. As we go through the checkout at supermarkets we encourage our kids to buy a Little Golden Book and not a bar of chocolate. (Time expired)Motion (by Senator Vanstone) proposed:That the debate be now adjourned.10000PRESIDENTThe PRESIDENT—I put the question that that motion be agreed to. Those of that opinion say aye, to the contrary no—5K4FAULKNER Senator Faulkner—No. What are we adjourning for?10000PRESIDENTThe PRESIDENT—It was my understanding there was an agreement to adjourn briefly so that I could make a statement. It was an agreement between the managers of business, I was informed.5K4FAULKNER Senator Faulkner—I am not aware of it.YE4BOSWELLSenator Boswell—Are you denying the President?5K4FAULKNER Senator Faulkner—I have not been informed as to what is going on. If you care to inform me, I am happy to cooperate.YE4BOSWELLSenator Boswell—The President wants to make a statement.5K4FAULKNER Senator Faulkner—I don't know that.EU4O'CHEESenator O'Chee—I told you.7E4VANSTONESenator Vanstone—Senator Faulkner might like to take the opportunity to take some advice from his manager as I am advised by the Manager of Government Business that there is some agreement on this matter. Perhaps, rather than simply interjecting and yelling over the table as he does at question time all the time, he could take a bit of advice for the smoother running of this place.Question resolved in the affirmative.Committees3878387838783878The PRESIDENTThe PRESIDENT10000PON/A10—During the adjournment debate last night Senator Conroy made several allegations about matters relating to the Select Committee on A New Tax System. One of those allegations was that I and the Clerk of the Senate improperly authorised the payment to Mr Chris Murphy, the consultant to the committee, of a sum specified in a consultancy contract with him. I reject that allegation. The question of whether Mr Murphy had fulfilled his contract and should be paid was considered at a meeting I had with the chair and deputy chair of the committee, Senator Cook and Senator Ferguson. It was agreed that Mr Murphy would be approached concerning work it was suggested he had not done. This resulted in an offer by Mr Murphy to perform additional work for an additional sum.After viewing the correspondence with Mr Murphy which was forwarded to me, I concluded that there was no basis to withhold payment from him and I also thought that his offer settled the matter. It was in that context that I wrote to the Leader of the Opposition in the Senate indicating that the matter had been settled. I table a letter from the Clerk of the Senate setting out the history of this matter and related correspondence.Senator Conroy also made allegations about the conduct of Senate staff who served the committee. The letter from the Clerk indicates that those allegations are unfounded. I deprecate the making of such allegations under privilege against staff who serve the Senate so well.16:15:003878Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—I seek leave to move a motion that the Senate take note of your statement.Leave granted.5K4Faulkner, Sen JohnSenator FAULKNER—Thank you very much, Madam President. I move:That the Senate take note of the statement.Let me commence my contribution on this particular motion to indicate that I am concerned that, as far as I am aware, the usual courtesies in presidential statements have not been extended to my office in relation to your statement, Madam President. I have just been informed by the Manager of Opposition Business that an indication was made a short while ago that you did intend to make such a statement. As you would be aware, Madam President, ordinarily the Leader of the Opposition is extended the courtesy by you or your office of notice of such a statement.I appreciate that, in the statement you have read to the Senate of which I have had no notice and of which I do not have a copy, you are including a letter from the Clerk of the Senate and also correspondence on the issue that the statement is concerning. I would ask you, Madam President, to undertake to ensure that that is all the relevant correspondence. I am not suggesting for one moment that that is not the case, but I am suggesting that it is important in this circumstance that all the relevant correspondence is provided for the benefit of senators. I would also ask, Madam President, that you table all advices from the Clerk and any other advices you may have received in relation to this particular matter. I must say that I do not believe that it is appropriate that such a statement be made in such a fashion in the middle of the second reading speech debate we are having.TH4KNOWLESSenator Knowles—But you approve of Conroy's statement.Honourable senators interjecting—10000PRESIDENTThe PRESIDENT—Order! The Senate will abide by the standing orders and Senator Faulkner has the call.5K4Faulkner, Sen JohnSenator FAULKNER—Thank you, Madam President. I do not believe that it is appropriate that such a statement be made without consultation in the middle of a second reading debate.TH4KNOWLESSenator Knowles—Who cares what you think!5K4Faulkner, Sen JohnSenator FAULKNER—I know that government senators like Senator Knowles do not care about the forms of the place, but I know, Madam President, that you do, and I draw that to your attention. I do make the point also, Madam President, that the opposition has bent over backwards to cooperate with the government in relation to the Senate's program to the extent that, even though it was a matter of controversy in this chamber, the Senate met this morning to deal with the tax package for the second reading debate only and that the Senate will be meeting tonight, even though it is not the unanimous view of senators that it should, to deal again with the second reading debate on this particular package of bills. I do think in that circumstance that consideration ought to be given to extending the normal courtesies to the opposition in relation to a statement made from the chair by the President. It is simply not adequate to receive literally a couple of minutes notice by the Manager of Opposition Business without consultation in relation to the substance of the statement you were intending to make.You would be aware, and you referred to it in your statement, of my request to you which we corresponded on in relation to matters of concern being appropriately dealt with by the Senate Staffing and Appropriations Committee. I assume the matters that we will see in the Clerk's letter and the appended correspondence go at least to the matters that I raised with you and perhaps to other related matters. Again, it is difficult for me to make a judgment while I am on my feet because I have not been extended the courtesy of any advance knowledge or warning about the statement that you have made in relation to this important matter.Madam President, I think it would have been more appropriate in these sorts of circumstances to have those discussions. It may have been more appropriate in these circumstances to have the Senate Staffing and Appropriations Committee look at these issues before you deemed it appropriate to come into the Senate in the middle of the second reading debate and make the statement that you have in response to a senator's contribution in the adjournment debate last night. So I am concerned about what I consider to be a lack of the usual courtesies, particularly in the circumstances where I believe we have seen from the opposition an extraordinary level of cooperation with the government in relation to the Senate's program.It is obviously difficult for any opposition senator without a copy of your statement, and certainly no copy of the Clerk's letter or any of the appended correspondence, to be in a position to make comment on the substantive issues that the Clerk's letter and the appended correspondence go to. It may be that members of the Senate Select Committee on A New Tax System—my colleagues in this instance being Senator Cook, Senator Conroy and Senator Sherry—are in a position to do that. I suspect they will find themselves in the same situation as I am.Given we do not have a copy even yet of the material that has been tabled, it is difficult for us to debate this at length. It may be appropriate at some stage to have a senator either adjourn this particular debate and for it to be brought back on at a later stage when we have had that opportunity—I ask for your consideration and cooperation, and the government's, in that regard—or it might be appropriate for a senator to seek leave to continue their remarks. But I do think the opposition is entitled to have some prior knowledge of the detail of such a statement if it is to be made in this unprecedented way before the Senate.Madam President, I commend to you the substantive point I made at the beginning of my contribution. I do think it appropriate that we be assured that all correspondence has been tabled in the Senate. Given there has been a considerable correspondence flow on this—and you would be aware that I am at least apprised of some of that because of our communications—it may be that that corres pondence trail has not concluded. It is also imperative that the Clerk's advice, if there is any, or other advices that you have received ought to be tabled in this chamber for the benefit of all senators. I ask as a matter of urgency that you deal with those substantive issues.16:23:003880Carr, Sen KimSenator CARRAW5VICALP00—Given the comments that have been made by Senator Faulkner, I indicate that, while the Manager of Government Business did approach me about this statement, we have not received any documentation nor copies of your statement and they have not been made available. I seek leave of the Senate to continue my remarks after we have had time to consider these matters.Leave granted; debate adjourned.Bills3881r703Billsr667Billsr666Billsr702Billsr699Billsr698Billsr664Billsr660Billsr658Billsr657Billsr701Billsr663Billsr659Billsr700Billsr661Billsr754Billsr755Billsr761Billsr765Billsr763Billsr764Billsr757Billsr760Billsr758Bills3881r759Billsr756Billsr7623881Debate resumed.16:24:003881Gibson, Sen BrianSenator GIBSONBX5TASLP10—Having read the statement last night, I commend you for your statement, Madam President. Moving on to A New Tax System (Goods and Services Tax) Bill 1998 , Australia is a small country that trades 20 per cent of its GDP with a world which is becoming more and more competitive. Over the last two years, we have had nothing but turmoil with the economies to our north but, in spite of that, the Australian economy has gone on with great strength. Why is that? Because it is a recognition by the rest of the world and by Australians that we have had good economic management over the last three years since the Howard government came in. We have brought expenditure back within income. We are reducing government debt. Interest rates for housing are down from 17 per cent to six per cent. We have low inflation and we have locked in openness and transparency in government reporting with regard to its accounts, so we are well regarded by the rest of the world. What should we do now? Should we sit still and do nothing for Australia and for our children? No. We have to keep up with the reform process because, in economic terms, we are just a tiny island in comparison with the rest of the world.The next big step is taxation. Australia needs tax reform desperately. There is a long history of this—the Asprey committee of 1975 and the Hawke government's option C in 1985. I will quote a few words from a former Treasurer, Mr Keating, from June 1985 on that issue:For too long the politically unpalatable decisions have been put off in this country because our politicians have not had the strength of purpose to tackle the hard issues. When it comes to the crunch, short-term political interests have always come first.Then we had Fightback in 1993. What this means is that both sides of politics here in the national parliament have shown by their words and by their deeds that Australia does need tax reform. Australian tax is far too complex. It is inefficient and it is unfair. As a little example, the income tax marginal rates impinge heavily on low- and medium-income people, destroying their incentives to work, to save and to do any overtime.In August 1997 the Prime Minister announced that the government was going to tackle tax reform. I chaired a coalition tax task force soon after that. We received about 650 submissions and met with many groups. The task force inquired into what was wrong with the tax system and suggestions for change. Virtually everyone agreed that the system needed reform, that it was basically broken and must be fixed. There were many suggestions for change that were passed on to the government, so late last year the government put out its ANTS package. The A New Tax System package is comprehensive. It is integrated with income tax cuts and a reform of all the indirect taxes, with the GST replacing 10 indirect taxes.We won the election in October with the weight of tax reform in our saddle. Since then the Senate committees were set up, with the main question—the considered question—out of the committee process which has gone on for the last five months being whether food should be in or out of the GST.First of all, virtually all economic modellers of repute in Australia have recommended that food should stay in and should keep it simple. We had a visit just a few weeks ago from an international expert from Europe, Professor Cnossen, who said:Research and experience in other countries proves that the best GST is a GST with a single rate applicable to all goods and services. A zero rate on food is largely ineffective in mitigating the GST burden on the poor. Zero rating food is like giving stones for bread to the poor . . . Further, from the same person:Studies in Canada and Ireland show that although the poor spend on average more of their income on food than the better off, the better off spend twice as much on food as the poor do.. . . . . . . . .This is also confirmed by a study in Sweden which shows that the main beneficiaries of a zero rate on food would be yuppies—single people with dual incomes living together. These people buy more expensive varieties of food, eat out more often, and tend to throw food away . . . Paul Keating, again, in an interview with AAP on 13 June on the issue of whether food should be in or out, 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.What we are saying is you buy the same necessities, but out of your relieved tax income.. . . . . . . . .. . . The best way of making these taxes operate effectively and efficiently is with minimum exemptions and with a single rate; that is the lesson which comes from all over the world. Once you have different rates all of these anomalies appear, and if you had exemptions, it means you have got a very complex administration.The other key thing that came through in the inquiry was compliance costs. Late in the inquiry the Senate select committee received an excellent paper summarising compliance costs, done by Dr Jeff Pope from Curtin University in Western Australia. I will quote just a few words from his executive summary:1 Food should be included in the GST base at the full 10% rate.There is no evidence to show that zero-rating food, as in the UK and Canada, leads to lower compliance costs than in New Zealand, which includes food.He also said:On the basis of international and Australian compliance costs research, overall, the Government's estimates of gross and net compliance costs of the GST are reasonable.It is time for the Labor Party to do the right thing by all Australians—to leave their rhetoric behind and to look for what is right for Australia, what is right for our children and our grandchildren, and to support tax reform. I think they do support it and they do not believe the rhetoric which they are saying. It is no wonder that the community gets very annoyed with politicians saying one thing but, underneath, believing something else.In the past, when Labor were in power, the coalition supported the float of the dollar, freeing up the banking and finance industry, reducing tariffs, and competition policy. Why? Because it was good for Australia, and we have a better Australia for it. Now it is time to move on to tax reform. This is the best time for tax reform for Australia. It is time for Labor to back the government and pass the tax reform bills.16:31:003882Evans, Sen ChrisSenator CHRIS EVANSAX5WAALP00—I did not expect the good senator to make such a short contribution, given his interest in the matter. I rise to speak in this debate with the same background as most of the senators in this chamber. I was elected to this place promising not to introduce a GST. That was the platform on which I was elected. I share it with all Labor senators, most of the Independent senators and half the Liberal senators—because half of them were elected in 1996 promising never, ever to introduce a GST. So, if you go around this room, a good 75 per cent of us were elected promising that we would never introduce a GST. I for one will be continuing to honour that promise to the Australian electorate.I want to start by making a couple of comments about process. I notice Liberal senators in this debate have concentrated a lot on process. I do not want to spend much time on it, because I think for some it is an excuse for avoiding debating the real issues, but I was concerned by an editorial in the Australian today which described the committee process inquiring into the GST as `a long, expensive, tedious and ultimately fruitless distraction from the goal of taxation reform.' I think that is an unfortunate view.The Labor Party was not responsible for setting up the committee process in the form that it finally took, but I think it is correct to say that the committee process was an involving one, it did allow community voices to be heard, it was educative, and it did enable further debate about the goods and services tax propositions of the government. So I think it is very churlish for people to refuse to recognise the role that that process has played in educating both the electorate and members of this parliament. It has allowed the voices of people like the disability pensioners, the surf lifesavers, the boy scouts and the self-funded retirees to be heard in a way they have never been heard before. They were not heard during the election campaign and they were not part of the government's very limited consultative process. The Senate inquiry process has allowed their voices to be heard and their concerns to be aired.It will be interesting to see whether the government listens to any of those concerns, because many people have raised very real issues about how the GST will impact on people's lives in this country. I am not talking about economic modelling or theories but real impacts, real imposts, real hurt and real damage to people's ability to conduct their lives and their ability to feed, clothe and house themselves. I think any process that allows debate about those issues and allows those concerns to be aired is, by definition, good for this country.My major concern in the debate today is to make the point that this is not a debate about economic modelling. I heard Senator Gibson's contribution and I recognise the very valuable contributions made by Senator Cook, Senator Conroy and others from this side, but I think what we have to do in this debate is to concentrate on how these bills would impact on real people. We have to use economic modelling and we have to inform ourselves about theories, projections and assumptions, but we also have to deal very much with the impact on Australian citizens—what this means for people trying to survive and bring up their families in this country. I think that has been a little lost in this debate, as we hear arguments from one economist trying to dispute the assumptions of another economist. I do not know about the Australian community, but I get pretty turned off by it and I get lost in a lot of the argument.What I want to concentrate on is the impact of these bills on Australian people, their families and their dependants, and I want to concentrate on the question of fairness. In response to a question I asked yesterday, Senator Alston dismissed the issue of fairness as being irrelevant. I think it is very relevant to this debate; I think it is at the heart of the debate. It is certainly at the heart of Labor's opposition to the GST. We say the GST is unfair, we say it is regressive. We say that any tax on necessities of life impacts more on people on low and fixed incomes, and it impacts unfairly. That is why, traditionally, countries with a GST have not taxed food and in many cases they have not taxed electricity, housing and other basic essentials. They accept that it is a regressive taxation regime if imposed on those basic necessities.The interesting thing people should ask in this GST debate is: if it is so fair, if it is such a good idea, why is the major debate in this country about compensation? Since when do you offer compensation for a fair and equitable measure? The only time you offer compensation is when people have been adversely affected by a measure or unfairly treated. There has been a concentration on compensation in this debate because people will be unfairly treated as a result of the measure. The Labor Party maintains that you cannot make it fair. Other parties and senators have different views, but fairness must be at the centre of this debate.It is not enough for the government and their supporters to all the time mount the mantra that tax reform is necessary. They have to be judged and held to account as to whether the tax reform they propose is fair. I say it is quite clearly not fair. In their tax package, a couple with two young children on $25,000 per annum will receive a tax benefit of $21.00 per week. A couple on $75,000 per annum, with children of the same age, will receive $121 per week. That is patently not fair.It even represents a distortion in terms of the percentage of benefit. If you are on $25,000 per annum, you get a 3.9 per cent increase. If you are on $75,000 per annum, you get a 12.5 per cent increase. This is just not a fair measure. These bills are not about improving the fairness of the Australian taxation system. They are about giving half of the tax benefit to the top 20 per cent of income earners in this country. It is skewed to the top end of town. For that reason, the Labor Party will be voting against it. It is not fair and that must be one of the criteria used to judge anything that is marketed as tax reform in this country.One of the other major issues that concerns me is this question of the economic modelling and averages. The government has done population wide averaging based on the CPI and they have tried to assess the impact then on all people in our community. That is just not good enough because we know people consume differently. Their experiences are different. The impact of measures on people on different incomes with different consumption patterns is quite different. People do not eat averages. What is also clear about averages is that for every average there must be people above and below the line. What must concern us here is the fate of those people who will be below the line, below the average, in terms of the impact of the GST.From the work that I did, and other senators did on the Community Affairs References Committee report titled The lucky country goes begging, it is clear that the people who fall below the line are the pensioners, the people with disabilities, the self-funded retirees, the people on fixed and low incomes. They are the people who fall below the line of the average. There is a greater impact on them. Their consumption patterns are such, and the overall impact of the GST is such, that they will be worse off than the average. So compensation based on the average automatically leaves them worse off. It seems the government does not care about this because whenever I have asked them about the modelling they have done or the work they have done in the departments of health, Social Security, and family services to analyse the impact on these people in our community they have said, `We have not done any of that sort of work.' They have let Treasury do it. Treasury tell you that they have just done the population wide average. That is just not good enough.We are talking about people in the community on fixed and low incomes. They are the people who are already struggling to make ends meet. We ought to know what the impact will be on them. We ought to have taken the time and interest to find out, but the government has not taken the time and interest to find out. They have just said that the averages are good enough for them. As I say, it is clear that the impact on them will be greater. The cost of the GST to people on low and fixed incomes will be larger and therefore they will be worse off. This matters very much.Quite frankly, if you are on $80,000 per annum and you are getting $120 per week in tax cuts, it does not matter if the economic modellers have got it a bit wrong. Let us say they got it half a percentage point out and instead of getting $115 per week you get $110. That is only $5, but you are getting $80,000 per year, so what does it matter? But, if you are living on a pension of $180 per week and they get it wrong, it really does matter. That is what we are dealing with here, not averages and not economic modelling. We are dealing with Australian citizens—age pensioners, disability pensioners—who currently live on $180.50 per week.They are doing it tough in the current environment. They would argue that the CPI does not take account of the real increases in food prices that are currently going on. They are supposed to be accepting of changes and of the government's proposal that gives them $6.48 per week increase, which is the extent of the government's generosity for those who are on $180.50 per week—that is, the age pension or the disability pension. We are not giving them the $120 per week that we are giving the top end of town; we are giving them $6.48.On the government's first go at the figures, on the 1.9 per cent CPI increase they predicted, the GST would allegedly only cost those people $3.60. Therefore, the government argues, they would be $2.89 in front, or enjoy a 1.5 per cent margin for error. That was the government's first go. It has been widely accepted now that the first-year CPI increase will be 3.1 per cent and not 1.9 per cent. I would argue that that is also a very conservative figure. Again, we are dealing with averages. If you apply the 3.1 per cent increase which, as I say, is now much more widely accepted by economic modellers and I think by the Treasury, the cost of the GST will be $5.60. The government says that they will get $6.48, so they are getting 88c a week above what the government says will be the GST increase. They are left with a margin of error of 0.48 per cent—that is, 88c per week.That is the standard of generosity we are prepared to apply, even if all the assumptions are right. I say they are clearly wrong and I am not the only one who says that. St Vincent de Paul says it; Aged Care Australia says it. All the church, charitable and community groups that work with aged people, with people with disabilities, with people on low and fixed incomes in this country, say that the assumptions in the government's figures about the GST and the impact on consumption by these people are all wrong. They say the costs will be much higher.Even if you accepted the government's figures, on the latest estimate of the CPI increase in the first year those on $180.50 per week will have a margin of error of 88c per week. This is from a government which is proposing to give those on $75,000 per year a $121 per week tax benefit. That is the kernel of the question of fairness about this tax package. We are dismissing concerns from the pensioners, the disabled and those with fixed and low incomes in this country, and from the people who represent them. We are assuring them, `There is an 88c margin there; if we have got it a bit wrong, you have got 88c of comfort'—at the same time that we are saying to the top end of town, `Have $120 per week.'This is not a fair package. It does not meet the needs of those on lower and fixed incomes. The compensation does not go anywhere near meeting their needs. All the evidence to the committee about the impact of the GST, from the people who work with the people on lower and fixed incomes in this country, is that the costs will be much higher and that therefore those people will clearly be worse off under a GST. There is no question in my mind about that.It is important because, when we are talking about these people, we are not talking about whether they can afford to go out to a restau rant at night; we are talking, for the disability pensioner, about whether they can afford to catch the bus to get out of the house during the day. For the age pensioner, we are talking about whether they can afford to buy medication or basic foodstuffs or to pay an electricity bill. We are talking about them meeting the very basic necessities of life, living on $180.50 per week. It seems to me that this package is not fair to them and does not attempt to be fair to them. It attempts to woo those on higher incomes in this country with huge tax breaks and says, `Don't worry too much about the others.'The reality in the countries that have introduced the GST in recent times is that those on fixed and low incomes have been worse off. Their compensation has been eroded over time. The poor have got poorer, and many people who were previously just making ends meet have been forced to rely on church and charitable groups for support because they are no longer able to meet their basic needs. These are real issues for real people, issues that have not been addressed by the government. The most callous thing that I find about the government's approach to this is that they refused to do the work to find out this information. They refuse to acknowledge that there needs to be more work done to assess the impact on the people on fixed and low incomes.There is a lot more that I would like to cover, and obviously I will make some contributions at the committee stage of the debate. But I think it is important that the focus of this debate moves away from all the talk of economic modelling, of averages, assumptions and predictions and we start to concentrate on the real-life impacts on ordinary Australians living in our community today: people who are surviving on fixed incomes, surviving on age pensions, surviving on disability pensions or struggling on low incomes to bring up children—people who will be faced with enormous costs because we, if we pass these bills, are going to tax the necessities of life for the first time in this country. We are going to tax food, housing and electricity.One of my favourite examples of how all this economic modelling means nonsense in the real world is the example used in the housing debate. Those people who are paying rent will have a GST applied on the rent. The government says that the average housing cost increase—and this includes owner-occupiers and tenants, et cetera, and so it is really a nonsense in terms of tenants anyway—will be 2.3 per cent. You can imagine how likely it is, if you are paying $100 per week rent—which is a low rent—in a suburb of Perth and bringing up a couple of kids, that the landlord is going to come in and say, `Well, the GST impact has just come through the economy, and I am going to have to increase your rent. Instead of your rent being $100 per week it is going to be $102.30 next week, because there has been a 2.3 per cent increase in housing costs as calculated by the government.' What nonsense! Rent goes up by $10 per week. It goes up in $10 increments. We all know that. Anybody with any experience in the rental market knows that.HX5WOODLEYSenator Woodley—If you're lucky.AX5Evans, Sen ChrisSenator CHRIS EVANS—If you're lucky. If you pay $100 per week in rent now, your rent after the GST will be $110. It will not be $102.30. The difference in the rental increase will wipe out any benefit that you might have got, even on the government's figures, in terms of compensation. That one decision, that one calculation on your rent, would be enough to wipe out, in the pensioner's case, the 88c per week that the government alleges they might be in front. For people on low incomes, it would wipe out the $5 or $6 per week that the government says would be in the compensation package that would put them in front. The reality of people's lives is that rent does not go up by $2.30 per week. It goes up by $10 per week. The reality of the GST is that those costs will flow through the system and will hit those people on low and fixed incomes much harder.The compensation package is inadequate, but fundamentally the GST is unfair. It cannot be made fair. The government has made very little attempt to make it fair. I suggest that we ought to reject these bills because they are not fair, they are not equitable, and they are not in the interests of a better Australian society.16:51:003886Woodley, Sen JohnSenator WOODLEYHX5QLDAD00—I also wish to address the legislation on a new tax system, and I want to speak about three issues today. The first issue is the impact the new tax package and specifically the GST will have on rural communities and industries. I agree with Senator Evans on this: the reason the compensation package will not work is not only that it will be eroded—and you only give compensation where something is fundamentally unfair in the first place—but also that the whole idea of compensation reinforces the deep divisions in this nation, made deeper by this government over the last three years by a tax on those at the edges. So the compensation package will not work for more than one reason. The third issue I want to raise is the failure of this government to understand the nature of the Australian community.Let me begin with the effect on rural communities. I will quote from the majority tax report—not from any of the minority reports. Under the heading `Impact on Rural Industries' it is very interesting to compare the submission made by the National Farmers Federation with submissions made by a number of the independent commodity bodies which are either members of the National Farmers Federation or are agricultural industry bodies not affiliated with the NFF. It is interesting that the National Farmers Federation right through has solidly opposed the idea of any exemptions from a consumption tax regime. In fact, we were told in the committee hearings that at its council meeting in November 1998 it was resolved:That the NFF continue to press for a broad-based GST and strongly oppose any further narrowing of the base to which the GST applies.The sad thing about the National Farmers Federation is that before it had heard any of the debate, before it had seen any of the reports from the Senate tax inquiries, before it had had a chance to hear from any of the other agricultural bodies which surely it ought to have been listening to, it had already made up its mind. Last November it had a position which it refused to alter. In conversations with some of the state branches of the NFF, the Democrats have discovered that in having those conversations those state branches themselves have been pulled into line by the National Farmers Federation, because it does not want to hear any of the evidence. It already has decided, as it usually does, that it will go with the government.But now I want to place on the record what many of the individual agricultural bodies have said about the tax package and particularly about the GST. The Australian Fresh Stone Fruit Growers Association told the inquiry that their organisation was not a member of the NFF, which tended not to represent horticulture. They said:Agriculture cannot be lumped together in one hit.They went on to say that the GST would certainly affect their industry. The government's own package indicates that the GST will result in much higher price increases for fresh food products. The estimation is somewhere between six and seven per cent—three times that of the economy as a whole, at 2.2 per cent, and four times that of confectionary and snack foods. In the long term, the Murphy and Monash models forecast a modest one per cent rise in agricultural output as export growth outweighs falls in domestic demand, although Murphy forecast a long-term loss of 500 jobs in agriculture. However, in the short term additional modelling for the employment committee shows that there could be a loss of 10,600 jobs across agricultural and food industries. That is according to the Monash modelling. So there is a loss of jobs that we are facing in these industries.The Australian Beef Association opposed the GST outright, arguing that it would lead to a major nine to 10 per cent reduction in domestic beef sales. The Dairy Farmers organisation predicted a major reduction in the supply of milk and called for milk to be zero rated as one of the staples or necessities of life. The Australian Fresh Stone Fruit Growers Association warned:There is a very real risk of the Federal Government inadvertently steering general community consumption away from fresh fruit and vegetables towards manufactured snack foods because of the proposed change in tax and associated price initiatives.So you can understand why I am cynical about the NFF's position—one which took no account of these submissions from agricultural bodies not sitting in an office in Canberra but working on the ground in their industry in the places where they know they will be affected. Mr Trautwein, the Deputy Chairman of the Australian Fresh Stone Fruit Growers Association, in his evidence expressed serious concern about the impact of such price competition on sales of output from his industry. He said:There should also be consideration given to the diet of Australians and appropriate exemptions dealt out to those foods which are essential for a person's diet and which lead to a good and healthy life.The Mackay Fruit and Vegetable Grower Association also called for staple food to be excluded from the GST. They argued:The Government should be doing everything in its power to educate people to the benefits of consuming fresh food and making these foods as attractive as possible in the market place. In fact, we view a GST on staple foods as a real kick in the guts after years of devoting ourselves to quality management and safe food ideals such as HACCP.You can see that the Democrats are concerned not only about the impact of food on the diet of Australians but also about the impact on the suppliers of those fresh foods, the farmers and growers of Australia. It should not be the Democrats who are defending the farmers, but here we are doing that. Dr Graeme Cole, a former university lecturer and New South Wales fruit grower, also argued for a fresh food exemption. His argument was that a failure to do this would mean:Producers will suffer severe economic losses due to reduced returns. The Government which imposed such a tax would be seen to be uncaring of its effect on the poorer section of the community despite protestations that compensation is being considered. The Government would also be seen to be uncaring of the effect on the bulk of the primary producers of Australia.The Banana Sectional Group Committee of the Queensland Fruit and Vegetable Growers—which is the representative body of 800 Queensland banana producers, producing about 75 per cent of Australia's total production—also argued that the GST would affect them and that there would be a downturn in consumption of their product. You can understand why the Democrats are so concerned about the impact of this tax package on rural communities. EU4O'CHEESenator O'Chee—Tell the rural communities what you are going to do on diesel.HX5Woodley, Sen JohnSenator WOODLEY—Yes, that is going to be addressed—EU4O'CHEESenator O'Chee—You are going to take the knife to them.HX5Woodley, Sen JohnSenator WOODLEY—We know what you are going to do. Let me give you a few more quotes, Senator O'Chee. Mr Christopher Simpson and Ms Margaret Milgate, who appeared before the committee in Brisbane, also represented the Queensland Fruit and Vegetable Growers and advised that, even though the study was done on behalf of the banana industry, the results were common across the fruit and vegetable industry. Ms Milgate said her organisation did not have a firm view on removing the GST on food as `we have not modelled it'. However, she said her industry was greatly concerned that a failure to pass on transport fuel price reductions to growers, or supermarket chains insisting that growers absorb the cost of the GST into prices—which is what they always do—would see medium producers' net disposable income reduced by 55.7 per cent.EU4O'CHEESenator O'Chee—You want to take the savings away so they can't be passed on, don't you?HX5Woodley, Sen JohnSenator WOODLEY—The problem, Senator O'Chee—and why I have touched a raw nerve with you—is that, as we know, the National Party in Queensland has been decimated in farming communities because it simply does not represent them. It will be sad when we see you disappear on 30 June because you have made a great contribution to the Senate, but the problem is that farmers and voters in Queensland have abandoned the National Party in droves. I am trying to put on the record the reason for that: if you would only listen and change your ways, perhaps you may be able to recover all the ground that you lost. Let me continue to give you the record, because I think it is very instructive. I can understand why you are sensitive about it, Senator O'Chee.EU4O'CHEESenator O'Chee—I'm not sensitive about it; I just want you to tell people the truth for once. HX5Woodley, Sen JohnSenator WOODLEY—I am telling you the truth because I am reading from the submissions of the various commodity bodies who have put on the record their concern. The Australian Beef Association expressed grave concerns at the impact of the proposed GST on beef producers, processors and retailers. The ABA questioned the validity of economic modelling run by Canberra's Centre for International Economics. In their submission they claimed:The models showed an 8.9% rise in the price of beef at retail level.. . . . . . . . .Anecdotal experience in New Zealand points to a 10 to 15% fall in beef consumption following the introduction of their GST.We have these real examples, Senator O'Chee.EU4O'CHEESenator O'Chee—Then they had to admit that beef consumption went up in New Zealand, contrary to what they said.HX5Woodley, Sen JohnSenator WOODLEY—I can understand why you are interjecting, because I know you do not want to hear. I realise you do not want to hear and I know that you are sensitive, but I will continue to put on the record what the submissions said.In a supplementary submission to the committee, the ABA quoted the New South Wales Meat Industry Authority in their claims that demand for beef rises and falls in direct response to fluctuations in cattle prices by around 1.15 per cent for every one per cent price rise or fall. Results from further studies show that beef consumption could fall by 11.8 per cent, as opposed to a fall of 0.4 per cent predicted by the government. You can understand why the Democrats are concerned; we have listened to all of these various commodity bodies' concerns about the effect of a GST on fresh fruit, fresh meat, et cetera. No wonder the National Party should be so sensitive about this; it knows that the effect on primary producers is going to be quite devastating.As well as affecting rural communities in terms of farmers, a survey of 20 Aboriginal community stores in the Northern Territory revealed that breads and cereals, fruit and vegetables were on average, without any GST, 35 per cent, 28 per cent and 26 per cent more expensive respectively in Aboriginal community stores than in the supermarket in the nearest regional centre. The highest price paid for fruit was 72 per cent more than the supermarket price. In November I visited the Aboriginal community on Cape York at Aurukun. We went to the store there and found that the price of both bread and milk was double that of the same items in Brisbane. You can see that, if you add to those communities a further cost with the GST, the impact on the nutrition in Aboriginal communities is also going to be devastating.As Senator Evans said in his contribution a while ago, why would you want to have a compensation package unless you were compensating for the unfairness of the government's proposal? That of course is exactly why the compensation package will not work, but there are other reasons. The other reasons really are to do with the failure of this government to understand the nature of community in Australia. It has become clear over the three years this federal government has been in power that a radical redefinition of what constitutes the nation has taken place. Clearly, the nation is to be seen not as community but as a collection of competing individuals. Not only, in ex-British Prime Minister Margaret Thatcher's words, is there no such thing as society; there is no such thing as community either, at least in the sense of community being the building block or foundation of the nation.Community is merely one sector within the nation, in competition with other sectors such as business. This may be seen in the way in which charities and the not-for-profit sector have been treated in the new tax regime. Until there was a public outcry about it, the proposal was to tax many fundraising activities in the community sector which previously had not been taxed. They included commercial activities such as second-hand clothing shops operated by Lifeline, for example, because they were seen to be in competition with commercial operators also selling second-hand clothing. The reasoning behind the move is to do with a change in definition from who you are—that is, a charity set up to benefit the community, especially disadvantaged members of the community—to what you do. In the original proposal, even the boy scouts bob-a-job annual fundraiser was to be taxed. In reply to a letter from Scouts Australia, the office of the Assistant Treasurer wrote that the scouts job week fundraising income would attract a GST. The letter stated:These activities are taxable in the same manner as if they were provided by a private sector organisation. To make scouting products GST free would confer an exemption to Scouts Australia which is not available to other such organisations, increasing the pressure to extend the exemption.So it does not matter who you are. It does not matter that you are a charity. It does not matter that you are the boy scouts or the girl guides, or whoever. All that matters is what you do.Again, there is no understanding of what constitutes `community' in this country. I believe that is what lies behind much of this government's misunderstanding about its compensation package. In political terms, the market economy defines `society', as I said before, as `a collection of competing individuals held together by self-interest'. But I believe that this market definition of society is not merely inadequate; it destroys the meaning and essence of community.By definition, `a collection of competing individuals' is made up of winners and losers. The winners are the true members of the community. Their very success determines their membership as a right. The losers exist at the edges of this kind of community. They have no rights. They belong to the community only in a secondary and inferior sense. The losers are permitted to exist by the good grace of the winners, who may offer them charity as long as they fulfil certain mutual obligations. They are to blame for the fact that they are losers. That is the way that this government defines `community'. I have to say that, in that kind of community, obviously the only way you can treat losers is to give them some compensation—but certainly do not treat them fairly. 17:11:003890Lundy, Sen KateSenator LUNDY7G6ACTALP00—I also rise today to speak of the devastating impact the GST will have on a significant number of areas in both our personal and professional lives. I will focus my comments on its impact on sport and recreation in Australia, and also take a look at its impact on emerging information technologies.In blunt terms, regular physical activity—be it through a gym, aerobics class, competition sport or recreational and quite pleasurable activities like fishing—generally results in improved productivity, enhanced quality of life and lower mortality rates. Everyone in this country is entitled to have access to those types of opportunities. But this government is about imposing barriers rather than removing them. The GST will raise the bar for many lower income Australians who now will be forced to view sport and recreation as a discretionary expense.The government's so-called tax experts have failed to acknowledge or detail how the GST will impact on sport and community health. The Vos report made a number of recommendations about particular health services that it believed should be GST exempt. In fact, the government's own Tax Consultative Committee separated the health sector into seven subsets. Apparently these experts did not consider physical activity as part of preventative health or as of specific benefit to the nation. If the Howard government had any understanding of the role of sport and recreation in Australian society, perhaps it would not be so happy to slap a 10 per cent tax on every single Australian who wants to participate in their own sport.For the record, let me remind the Senate of what Mr Howard's so-called expert committee had to say to justify keeping a GST on sport and recreational activities. It said:It was also recognised by the Committee that many recreational pursuits may have health benefits, but [we] decided that it was necessary to `draw the line' at a reasonable point. The Committee also kept in mind that such an extension could have had significant revenue implications for the Government.There you have it. The government thinks that recreational pursuits having a distinct health benefit must be taxed, otherwise there might be revenue implications.It is an interesting issue in thinking about the bigger picture and the way this government develops policy. How convenient it is for a government not to factor in something like preventative health through physical activity and recreation and acknowledge the fact that, indeed, the federal government itself invests a great proportion of money in this activity every year? So, whilst the government hands out with one hand support for community based sport and recreation, it takes away with the other. I should note at this point that commitment to federal funded sport and recreation has declined during the period of the Howard government.During the GST inquiries, the Australian Olympic Committee gave evidence that the GST has the potential to impact adversely both on the AOC as an organisation that supports athletes and on Australian athletes themselves. It will also impact on the value of grants from the AOC to nonprofit sporting organisations, grants funding to athletes, the value of sponsorship programs and the medal reward scheme.Womensport Australia's submission to the GST inquiry demonstrated that the GST is likely to have several negative impacts on women's participation in sport. They raise particular concerns about the taxing of membership fees, which many women's sporting organisations rely on, particularly due to the difficulty that Womensport have in attracting sponsorship for the sporting activities undertaken by them. They stated that any increase in the cost of memberships and sporting goods is likely to increase the barrier for women's participation in sport, as women are more likely to be on lower incomes.An example of how the GST will negatively impact on sport is Riding for the Disabled. To date, that organisation has been sales tax exempt on purchases such as stationery and saddles and other riding tack. In addition, the services which Riding for the Disabled utilises—namely, farriers, veterinary services and horse feed—will now attract the full 10 per cent GST. As sport is not directly taxable on its output under the present wholesale sales tax system, the GST will effectively tax an activity that has previously been free of such impositions. For the first time we will see sport and recreational activities taxed, yet approximately 70 per cent of sport revenue is derived from the supply of services and goods to consumers who cannot claim GST input tax credits. As a consequence, many consumers may simply stop buying sporting equipment. This will have a tremendously negative effect on participation in sport throughout the country.The GST will also mean that, for the first time ever, attendance at sporting events will be taxed. According to an Ernst and Young report, the GST will significantly increase admission charges and club membership fees. Under the coalition's GST tax package, it will cost more to register in a sporting competition. It will cost more to enter as an individual or a team in a sporting competition. It will cost more to attend a sporting event. It will cost more to buy equipment and to participate in sport generally, and it will cost more to buy uniforms. And that is not all. The GST also applies to coaching and training courses. So if you or your family members want to take swimming lessons, tennis lessons, aerobic classes or attend referee or umpire courses, you will be slugged with a 10 per cent GST on the costs.This will have major ramifications throughout the sports sector. The select committee heard evidence on this matter. It will cause a downturn in equipment sales and a downturn in attendance at venues and competitions. For many Australian families, participating in organised physical activities is an essential not a discretionary expense. They should be encouraged and supported by government, not taxed beyond the means of most families. Many Australian families are also involved as volunteers and club administrators, and the imposition of the GST will place a potentially unworkable burden upon them.The GST will turn every community based club into tax collectors, once they have obtained a GST number. For nonprofit clubs, volunteer administrators will have to calculate for the first time the taxation on the combined income of the club and then submit these returns to the government. Those clubs without qualified personnel will have to use their precious funds to pay for accountants to do their books. I recently spoke at a soccer function where I pointed out that the only people to benefit from the GST in the sporting community will indeed be accountants. Whilst there were some sports participants in the room who happened to also be accountants, the general consensus was that the GST was a bad thing for sport.Instead of concentrating on promoting their clubs' activities, these volunteers will be fundraising to pay for the accountants they will need to calculate the tax on canteen profits and raffle ticket sales so they can forward it to the Treasurer. Sure, some of these clubs will be able to claim a rebate on the GST paid on equipment purchases, but the time and money involved in calculating and submitting these forms is beyond the reach of many of these organisations. If the New Zealand and Canadian experiences are anything to go by, the volume of work in keeping these records and transactions will cause many clubs to fold.It should be obvious that it requires a high level of expertise in administration and accountancy for volunteers to keep these detailed records on fees, charges, equipment purchases, canteen sales and so on. Once again, New Zealand gives us a classic example of how the GST can cripple the sports sector. When the GST was introduced in New Zealand, there was a very marked decline in volunteers and those people affiliated with sport and recreation. This decline has not been arrested, and the outcome is that the GST has effectively stunted sports participation and undermined significantly the sports industry in that country.When I talk about the sports industry, it is easy to think of it in terms of the clubs and the economy of sport and the growing industry that sport is in this country at the moment. But, beyond the damage that it will potentially do to our growing sports sector, we have to consider the impact on the role that community based sport plays as a force for social cohesion in our society, as a source of what creates a sense of local identity. Sport in Australia is far more than just something we do on the weekends, worthy of some government recognition. It is very much a part of Australian culture.One of the most disturbing aspects of this whole debate around the GST is that the government are so keen to keep the debate narrow. They express concern and disdain about the absolutely thorough job that the select committee has been able to do in drawing out all of the aspects of how the GST will impact on the Australian community. We have stepped outside the accountancy books as part of this inquiry. The evidence presented and the subsequent report presents the Australian community with the real picture for the first time—the impact on people in this country as a result of the legislation that the government currently have before us in this place.It is not good enough to approach the GST in that narrow fashion. It is not good enough because of the social price. I have traversed the issue of sport and recreation here today, and many other speakers from this side of the chamber have traversed the absolutely mind-blowing plethora of issues that the GST touches upon. Whilst sport is just one perspective, it forms this critical jigsaw that makes up our life experience in this country. Just by looking at the sport experience, I think you can see very clearly that the impact of the GST will be far from innocuous. It will go further than any compensation package could possibly address. We are dealing with a shallow government with a shallow plan that will no doubt have shallow outcomes.There are many other areas that the GST impacts upon. One I would like to turn to now is the fact that the GST is a tax for times past. It does not suit the emerging information economy and what we call the `information society'. Convergence, the coming together of computers, media and content, is changing the way we live our lives and it is changing our economy in a fundamental way. It is changing the way we spend our time, in a social sense. It is changing the way we communicate. These changes and the tools of this new economy, like the Internet, start to change the rules on how people transact, how they exchange goods and services, how they express themselves in social terms and how they engage in electronic commerce. We have to have a tax system that addresses those changes. The GST does not; in fact, it moves it in the opposite direction.The GST is a tax that applies to the concept of an identifiable commodity that is passed on, sold, et cetera, in a certain place at a certain time. What happens if you are dealing with a digital product or a digital service in a global environment with a GST based on a singular nation-state with a national economy? Suddenly, the challenge to revenues derived from the taxation system takes on a whole new meaning. It is not just a whole new challenge for the Australian government but also, as was traversed at the OECD Ministerial Forum on Electronic Commerce in Ottawa in October last year, a challenge for all governments to look at the revenue depletion capability that this global economy will actually introduce to governments as time goes on. It is not as if the government is not aware of this; it is not as if the Australian Taxation Office has not even begun to look at this; they are. It is an issue of international concern—how electronic commerce on a global scale can actually undermine a government's ability to derive revenue. A goods and services tax does not sit comfortably in this new environment.So here we are in 1999 sitting on the brink of massive changes with respect to the information society, putting in place a tax system which has declining relevance. It can only decline because of the nature of this new economy. Surely that in itself is a reflection on a government that has its mind-set back in an earlier part of this century and is not thinking in terms of what comes next. It is not even thinking in terms of the year 1999, let alone what the circumstances are going to be with respect to the information economy in, say, the year 2005. Yet it is in this chamber today pushing through this taxation framework.There is another aspect to information technology that is worth mentioning, and that is the practical side of things: how it will impact on a business's or a citizen's ability to involve themselves in the information society. I refer to the way taxation rates will be altered with respect to desktop products, computer services, telecommunication services and all of the expenses that go towards making it possible for someone living in Wagga to get on the Internet or for an emerging business in Perth which is trying to set up shop to look at global export markets through a digital environment. How these people enable themselves to participate in the information society will now be taxed like it has never been taxed before.Obviously, the services which are a growing proportion of business and consumer expense in relation to information technology are starting to shift that balance—greater imposition, but at a tax to those services. It is not just a matter of a simple margin being added on the top; it is actually a significant cost increase that goes way beyond what would be a relative growth of 10 per cent across their expenses. That trend of costs in relation to enabling yourself to participate in the information society, from hardware to software and services, areas that have not previously been taxed, is significant and documented at length.Input taxed organisations will also be unable to claim back the GST paid on their IT purchases, so for these organisations the cost of the IT hardware will also increase. Suppliers of IT equipment are expecting a large amount of volatility in the months of June, July and August 2000 as suppliers attempt to juggle massive fluctuations in supply and demand. This will be at a time when we should be focused as a nation not only on growing the capability of Australian citizens and businesses to participate in the information society but also on growing our own IT industry. There is a number of very sound and well-documented economic reasons for them to do that.Large numbers of businesses associated with the Internet—where, as I said, it is technically difficult to impose a GST—will not be able to claim back those credits. Enterprises in some sectors, such as insurance and finance, are likely to have extensive layers of customised software in addition to their packaged financial applications to automate transactions, new services and the provision of those services. They will face even greater costs beyond those associated with the purchase of packaged software applications.It goes on. Services such as credit cards provided by banks and emerging electronic commerce services will pay tax on hardware, software and the service inputs to the business sector, but they will not be able to claim them back unless these input taxed organisations force these cost increases onto consumers through other mechanisms, such as increased transaction fees and other bank charges. So the IT industry sector, like the sports sector in this country, will have to pass costs on to the ultimate end user, and that is the citizen of Australia who, through this package of bills, will have to find the bit of extra money from their weekly income to service all of these growing costs.In closing, let me say a few things about young people. The generational perspective of this debate is devastating. For the first time ever I see young people shaking their heads, wondering why the focus is on the GST when we should be at a turning point as a country in terms of growth in the investment in education and looking at new job opportunities in industries. We have seen, through this contribution, that this is not going to happen with the GST.17:31:003893Gibbs, Sen BrendaSenator GIBBS6L6QLDALP00—I rise to speak on the A New Tax System (Goods and Services Tax) Bill 1998 and related bills which, if passed, will force the proposed GST on all Australians. Having been a member of the Community Affairs References Committee inquiry into the GST, it is abundantly clear to me that this package of bills is inherently unfair and inequitable, with the potential to adversely affect the living standards of many Australian households.The so-called ANTS bills are indicative of this government's ongoing disregard for social policy. Its inability to comprehend the potential long-term implications of the GST for Australian society exposes a government that is seriously out of touch with the values and standards that prevail within the Australian community. Nowhere is this disregard more blatantly apparent than in the proposed GST's treatment of charitable and community organisations. The government's tax package would draw many charitable and community organisations into the tax net for the first time, forcing them to compete with profit making enterprises when raising funds for services. The implications of a GST on charities are enormous when we consider the size of the charitable sector and the magnitude of the work they do within the community.Evidence provided to the Senate inquiry by the Industry Commission concluded that in 1993-94 the community welfare sector employed over 100,000 paid staff and had a total annual expenditure of $4.8 billion. The work of the sector is also supported by volunteers who donate 95 million hours of their own time each year. In 1995-96, nonprofit organisations spent over $25 billion in operating expenses, which was at least six per cent of gross domestic product. The NSW Council of Social Services also pointed out to the committee that the nonprofit sector in Australia is as large as the NSW and Victorian governments combined. Clearly, these groups have traditionally made a substantial contribution to helping Australians in a multitude of different ways.The commercial activities undertaken by charities and community organisations are a means of funding the nonprofit services they provide. The funds available to such organisations will be severely diminished if they are forced to compete on an equal tax footing with regular businesses. Charitable and community organisations will also be hit with significant increases in administration and compliance costs under the GST regime. The effects of these costs will be intensified by the corresponding loss of funding from commercial activities.The GST will therefore increase the operating costs of charitable and community organisations while their funding base will be significantly diminished. Ultimately, this will mean that these organisations will be forced to cut back on services to the community. Disadvantaged groups will suffer the most as they are the main recipients of charitable and community services.The generosity and close-knit nature of the Australian community are manifest in the work of our many charitable and community organisations that are funded directly and indirectly by Australians in the form of donations, government assistance and general fundraising activities. The very mateship and camaraderie that characterise the Australian people were important enough to the Prime Minister for him to feel they needed to be incorporated in the language of the constitutional preamble. However, it now seems that he is unwilling to provide for the concept of mateship in his tax package. The willingness and ability of people to help others will henceforth be constrained by tax measures that inhibit the provision of services by charitable and community organisations. These groups are the very vehicles through which Australians are able to help their mates.This government has chosen to attack charities in a tax package that will inevitably leave more Australian households needing these charities' help. Low income families and individuals will undoubtedly be among the big losers if the GST is allowed to proceed. This is because the GST is inherently regressive, whichever way you look at it. A family earning $100,000 a year pays the same amount of GST on the same purchase as a family earning $30,000 a year.People on low incomes will also be disadvantaged because they tend to spend a higher proportion of their income on items that are currently untaxed. A 10 per cent GST on fresh food and clothing—which are currently free from wholesale tax—will impact heavily on poorer people. Such measures also have long-term implications for public health. Foods that are currently not taxed will become more expensive, and these include the very foods advocated in the government guidelines as vital for good health. Nutritious foods will become more expensive relative to many highly processed, unhealthy foods. Good nutrition is essential to ensuring good health. This government has obviously not thought through the implications of creating disincentives to healthy eating. Many poorer people may eventually become a drain on the public health system as a direct result of poor nutrition. Denying people healthy food therefore is not only morally and socially unacceptable but also demonstrates economic foolishness in the long term.The so-called `compensation' package for families is significantly flawed and incapable of sheltering families from the effects of the GST. According to the government's tax reform manual, the GST will increase the costs of a couple with no children earning $30,000 a year by $9.33 per week. If the same couple had one child, their costs are expected to rise by $9.63 per week. This government is so out of touch that it thinks raising a child costs only 30c a week. No wonder their compensation package is such a joke. According to the Australian Consumers Association, a typical shopping basket of groceries will actually cost around 8.8 per cent more under a GST.Families on low incomes will also be hit hard by the GST's impact on the housing sector. Queensland Shelter was one of the many organisations to point out to the committee that the government's $7,000 compensation package for first home buyers will not be enough to offset the effect of the GST. The Housing Industry Association argued that prices for new homes would rise by at least $16,000 for an average house and land package worth $194,000—a rise of eight per cent to $210,000. The GST on new homes will in effect become a `tax on a tax', as most current charges, such as stamp duty, will be retained. These taxes will be included in the price on which the 10 per cent GST is calculated.Public housing tenants pay a quarter of their income in rent and would therefore automatically lose one-quarter of their GST compensation in rent increases. The Queensland Shelter organisation also pointed out in their submission that, if rents charged by the community housing sector and the State Housing Authority are greater than 50 per cent of the market value, they may be treated as a commercial entity whose services are therefore subject to a GST.Unlike the private housing market, state housing authorities and the community housing sector provide housing assistance to low income households and those with special needs. These organisations will therefore be stuck between a rock and a hard place, trying to decide whether to pass on the additional costs associated with a GST to tenants in the form of increased rents or to absorb these costs internally. The latter decision could further erode housing assistance revenue in the light of declining funds provided by the Commonwealth under the CSHA.In addition, the government has misled pensioners by claiming that its GST compensation is in addition to existing pension increase entitlements. The government has merely `rebadged' normal indexation as GST compensation. The Australian Pensioners and Superannuants Federation provided some compelling evidence to the community affairs committee's inquiry into the GST, outlining the inadequacy of the government's compensation package. They said:We do not believe that the compensation is adequate. Firstly, government figures are wrong in very many areas. One of them is that everybody spends the same proportion of their income on food and services. That is quite wrong. Aged pensioners spend a large proportion of their income on food and on things like housing and utilities.The federation went on to stress the impact this will have on older people, who largely rely on a finite level of saving to get them through retirement. Pensioner groups were also highly concerned that the value of the already inadequate compensation package will be eroded over time. Anglicare Australia expressed its concern very succinctly to the committee inquiry, stating:Compensation packages are unlikely to remain intact for long. They require highly visible government expenditure and there is always pressure on governments to reduce expenditure. This is likely to lead governments to allow inflation to erode compensation packages over time.The concerns of Anglicare are reinforced by evidence from overseas. In New Zealand, GST compensation measures lasted only a few years, illustrating the very real danger that already inadequate compensation will be further eroded for the elderly and other low income and disadvantaged groups.The GST will make independent living more difficult for people with disabilities. The tax package will apply to services which are luxuries for most households but essentials for people with disabilities. Services such as lawn mowing, home maintenance, home cleaning, cooking and shopping will all be taxed. These services make independent living viable for people with disabilities for whom institutionalisation is inappropriate.Local government will be under increased financial pressure as a result of the GST. Services such as swimming pools, public transport, meals for seniors and school holiday activities will all be subject to a 10 per cent GST. In addition, administrative and compliance costs will have a large impact on the capacity of councils to provide services to the community. Local government expects the cost incurred to collect the GST will be $1 million per council initially and up to $100,000 per annum thereafter.Even the Scouts and Girl Guides have not escaped the government's tax net. Membership fees will be subject to the GST while administrative and compliance costs will create an additional financial burden. The Scouts and Guides are already at the crossroads of financial viability and any new tax or loss of current earnings will result in fragmentation, closure and the ultimate reduction of services for youth in local Australian communities.The Australian Council of Social Service has estimated that at least one million households will be worse off during the first year of the GST's implementation. This is a reflection of the GST's real impact on low income families and individuals. ACOSS data reveals most households that rely mainly on government income support would be worse off during at least the first year of the GST. This is because estimated price increases exceed the government's proposed four per cent compensation benchmark. According to the ACOSS data, the estimated price increases faced by various low income households after the first year range from an average of 3.2 per cent to four per cent when rent assistance is included and from 3.7 per cent to 4.9 per cent when rent assistance is excluded from household income. When considering these figures, it is vital to note that only a small minority of social security recipients receive rent assistance. Consequently, these figures suggest that a significant number of households would be worse off over the medium term, as well as the short term, under the government's proposed compensation arrangements.In addition, this government has continued to demonstrate its disregard and apathy for those in rural and remote areas with the provisions of its GST. People in rural and remote areas are, on average, less well off than their urban counterparts. The GST on food in particular will therefore have an extremely harsh effect on country households. Country people already have more limited access to a range of nutritious foods due to greater costs, poorer quality and reduced availability. In North Queensland, for example, a basket of `healthy' foods has been found to cost 175 per cent more than Brisbane prices. This will compound the effect of price rises for low and middle income families in rural and remote communities. The consequences of imposing the GST on all foods are therefore likely to lead to a deterioration in the dietary situation of people in these areas.Clearly, the government's tax package reveals a departure from social responsibility as much as it depicts the abandonment of community values. The concept of mateship, so revered by the Prime Minister, is nowhere to be seen in the GST, discouraging the charitable and community sector which has been such an integral part of Australian society. It will take more than a $20 million advertising campaign to convince the community that this is not an inherently unfair and inequitable tax. This legislation is complicated, unworkable and regressive and deserves to be thrown on the scrap heap.17:48:003896Lees, Sen MegSenator LEES8U4SAAD00—I rise in this place to advocate a position on taxation which I strongly believe will best serve Australia in a new century. I make the point that the Democrats believe that one 20-minute speech by each of us in this place to deal with what is, I think, a package of 29 bills left in the pot is not adequate, and obviously we will have to take other opportunities to make our points on a range of issues that we have not been able to get through. But, as we have some weeks set aside for this debate, no doubt we will be able to do that during this time.But I am rather concerned about some of the understandings, arrangements and agreements we did have with government that have already been breached. We have suddenly had placed on us some seven extra hours of second reading speeches which has pushed out by two days the time during which we should be dealing with amendments. So the government is beginning to run us up against a wall in terms of reasonable time to deal with bills that numbered 16 when we first began dealing with this, and the number is continuing to grow.To set the scene, I remind the Senate that the Democrats accept that our rather decrepit taxation system is in need of some repair. We have stayed at the table in good faith. We realise the ALP, for their reasons, have not. But we have not, as they have done, gone wandering off from the table muttering about caviar, orange juice and lear jets. Nor have we presented a two per cent cascading tax, as the dear departed Ms Hanson did. We do see benefits in fair, responsible and environmentally friendly tax reform, but we also see the costs. What we want to do as we approach the committee stage is to maximise the former and minimise the latter. Indeed, unlike the ALP we have actually accepted the risks of doing that and accepted the challenges of staying in the debate.We accept the coalition has a majority in the House of Representatives and therefore has the right to present legislation. They also have the right, obviously, to have that legislation dealt with fairly and reasonably, and we will do that in detail. But their claim, which is pushed incessantly by the executive, that they have the right to have every minute part of every bill passed without so much as a serious comment or amendment will not be accepted by us. It is patent nonsense. And this mindless claim that is reiterated from time to time by some—how shall I say it?—less intellectually rigorous sections of the media is in indirect conflict with the Constitution. So I direct those who still want to argue that the Senate should not be touching these bills back to what is very clearly stated in the Australian Constitution: that we have two houses of federal parliament with nearly equal powers.What this constant claim does is deny the right and the obligation of both houses of parliament to review and amend legislation on behalf of the Australian people. Indeed, what we have seen with the committee process over the last weeks and months is actually an opportunity for the Australian people to become involved in the federal parliamentary process. There is a certain wry amusement in being attacked in newspapers, editorial after editorial, for daring to suggest that we want some changes to the GST when those very proprietors appear before the Senate committee asking that newspapers actually be exempt from the GST. There were more than a few people who had a bit of a smile over that one.There is also the claim that the original 16 bills were the product of some sort of immaculate conception, that they are a true and full reflection of the ANTS package and are sanctioned by some sort of golden mandate. We could talk about mandates forever. I could spend my entire speech on it, but I just want to make three points. Firstly, the government's claim of a mandate, in that sense, is irretrievably flawed. Mr Howard has a 12-seat majority in the House of Representatives, with 48.7 per cent of the two-party preferred vote. Secondly, over 63 per cent of people—a record number of people—did not vote for the coalition in the Senate. Voters rejected the coalition and voted for parties who either opposed this package outright or who want to see it substantially modified. Thirdly, if Mr Howard and Mr Costello are to be consistent in their argument, they would insist that the tax bills be dealt with by the Senate that was actually elected to deal with them—that is, the Senate that was just elected, that will sit from 1 July.But let us get back to the tax package. If the tax package is so perfect in every detail, if it was all finished as it was rushed through the House of Representatives in those—what was it?—20 hours for the whole 16 bills, why then are we seeing it multiply like rabbits? Obviously, it is a working document. It is a work in progress. Also, if we look at the two bills that this Senate very cooperatively agreed to deal with—the two bills that had early start-up dates—we see the government itself with 15 amendments and an amendment from the Labor Party. Just looking at the technical problems within these bills, we have hundreds of amendments coming just to fix that part of legislation.I remind the government—not that Mr Costello needs reminding—that it was the Democrats that initiated and negotiated a very comprehensive Senate committee review process of this overhaul of our tax system. The major report of the Senate tax committee was released yesterday, and I believe it is a very damning indictment of the government's tax plans. No wonder the Treasurer and Treasury fought tooth and nail to prevent the inquiry. However, industry, business, community groups, environment groups, welfare groups and churches all had the opportunity—and, indeed, welcomed the opportunity—to contribute to the process. There were some 1,500 submissions. And, as that went through, my team of researchers—and I thank them, particularly John Cherry, for their work—worked behind the scenes testing all the propositions and probing every strength and weakness of the various arguments, and this is what has led us now to begin working through and preparing amendments.So what have we found out? We have found out that a GST that excluded food would deliver essentially the same level of GDP growth, consumer welfare, investment and export gains as would a GST with food, but it would do so with much lower inflation, and a much less regressive tax system would result. Despite the evidence that everyone has accepted, the government still carries on with the claim that the tax system would be better—and, indeed, would be unworkable with food out of it—with food left in. I just say to Mr Costello: go back and read the evidence.If we are going to address the integrity of the package and argue, `No, food will unravel the integrity of the package,' why then has the government taken out health and education? If the government can alter its pure model to accommodate those two areas, why can't it do the same for food? I argue that we have seen the Treasurer forfeit the point. Indeed, it is game, set and match on that one.To my mind, the most significant finding of the first round of this Senate tax inquiry was that government senators finally conceded that taking out food would still allow the GST to deliver the same level of macro-economic benefits to the economy. Indeed, Peter Dixon's modelling showed that taking out food would generate an extra 8,000 to 12,000 jobs in the short term by eliminating much of the harmful tax mix change—the change between direct and indirect tax systems.It was acknowledged that taking out food would increase compliance costs. However, the evidence from overseas and also the growing computerisation of business basically mean that those costs have been hugely overstated. And that, again, was borne out in the evidence before the committee. As for compliance costs, I think we need to look at the claims that up to 370,000 businesses would be affected. In fact, what we saw was that something closer to 40,000 businesses could be affected, and that it could cost as little as $13 million. We have to put that beside the potential for nearly five million losers if we tax food.As for general complexity, I think that Senator Murray put it very well recently on Meet the Press when he observed that those 27 OECD countries that have some sort of a GST or VAT have 700 million people in them and, if they can cope with this, what is wrong with 18 million Australians coping with it? In any case, for the Democrats the task has always been to balance simplicity and equity.The government's other basic claim is that there will be no losers. No-one who listened to the evidence before the inquiry and no-one who has read the reports with anything like an open mind believes that one any more. Certainly, most Australians do not. But the executive marches on regardless, pushing the line which is now right up there with the famous and laughable proclamation that `no child will be living in poverty by 1990'. So here, again, the government has failed to make a case. Indeed, polling shows that they are hugely losing out there in the electorate, with some 66 per cent of people believing that food should be zero rated.Increasingly, the executive's public case is now being prosecuted more through discredited rhetoric and repetition than by rational argument. Indeed, I find it interesting to hear ministers, such as Mr Costello, on John Laws's program this morning, basically arguing that they are, in fact, bastards who want to be kept honest—a task, I think, for Hercules.But Mr Costello now has an important choice to make. He knows that this package is unacceptable to the majority of senators. He now has to choose between either negotiating down the `food out' road or negotiating down the `compensation up' pathway. Mr Costello knows by now that the Democrats will not go down that second road. We will not go down the `compensation up' road. So he will have to choose between a fair Democrat modified package or, basically, chance his arm with some sort of offer on compensation going down that other road.Today I outlined our preferred definition of food, and basically the last piece in the Democrat negotiating position is now on the table and firmly in place. We fought the last election with a very clear broad principle—no GST on food. We said then that we were leaning towards a wide definition—the broadest possible definition—but the question was open and left open by the party room. After weighing up the evidence, the final report outlined three possible definitions for food, all of which work in practice—the Dutch model, the model from the United Kingdom and the Irish model. In its treatment of food, the Dutch model basically takes everything out, and that includes restaurants and takeaways. There is no tax on any food for human consumption. The British take a narrower model, and this is where some of our definitional problems start occurring. They actually tax restaurants and takeaway food. That is more progressive, but it creates many of those problems that we have had explained to us in great detail in the media over the last few months. And then, of course, there is the Irish example. This is the one used by most European countries which defines fairly tightly what are basic or essential foods. This is the choice that the Democrats have made.I am recapping all this to underline the importance of the Senate inquiry. It was through that inquiry process and listening to the evidence that we selected that last model. I want to say that all the models remain on the table. We are happy to talk through any. Indeed, listening to Mr Costello over the last few weeks, one would expect that if he had to deal with food being out he would have chosen the first model with everything out, because that is the easiest one to define. He would not have to go around worrying about hot pies and cold chooks. The Dutch model is the easiest one in terms of simplicity, which is what he has been arguing for. Perhaps we should have invited him before the Senate committee to put his case for the `all food out' option.The definition that we have chosen—the Irish model—is $1 billion less than the British one which we initially had on the table. It zero rates basic food—that is, fresh fruit, vegetables, meat, dairy products, bread, cooking ingredients—but it does tax soft drinks, ice-cream, confectionary, bakery products other than bread, and prepared meals in whatever form they are served. It overcomes those sideshow issues that have been dragged out time and time again over the last few weeks and months—the ones about doughnuts and gingerbread men et cetera. It is progressive. Data shows that high income earners eat a lot more takeaway meals, pre-prepared meals and restaurant meals than low income earners. It also serves public health interests in that the price of fresh, healthy food would actually fall but the price of some junk food would rise. This was an outcome sought by the Dietitians Association, the Public Health Association and a range of other organisations including the Australian Council for Health and Physical Education.The Irish option is also pro-jobs, increasing the number of jobs generated by the tax package by about another 8,000. In fact, I wish Senator Boswell was here because I would urge the National Party to get behind us on this. They know, as we do, that the GST on food would hurt their rural constituents the hardest. The Nationals should listen, as we have, to the evidence from the dairy farmers, the beef association, the fresh stone fruit growers, the fruit and vegetable growers associations et cetera and join us in defending rural Australia.The $4 billion cost of exempting food from the GST can easily be paid for by a new and more progressive tax scale. The way we would pay for this will make it even fairer for rural Australians. Let us look at the cost of fresh food in many rural areas. Discounting some of the claims made by government relating to diesel fuel—it will simply not be passed on at that rate—if food remains in the basket, rural people will be paying a lot more than they are now for their fresh food compared to what people in the cities will be paying. This is not to mention the job losses in rural areas if people move away from fresh vegetables and fresh fruit, particularly to imported products in tins that are cheaper because of the additional cost on the fresh product.A combination of zero rating food and a new progressive tax scale, such as put forward in the response package that we released today, will see low income earners—on, say, $30,000 a year—upwards of $4 to $6 a week better off than they are under the existing ANTS package, while high income earners on $80,000 or so will still receive substantial tax cuts of around $38 per week. This is arguably a much fairer outcome than a new regressive $5 billion tax on food that is basically there to pay for the extra tax cuts for high income earners—that top 20 per cent. But food is not the only issue the Democrats insist that the government addresses. It is just one of the many concerns we have. We can add to that list, as I mentioned before, the definitions in health and education, the treatment of books, the treatment of tourism and housing, et cetera.In my last few minutes, I want to turn to our concerns about this GST ANTS package and its drastic effect on the environment. The information given to the Senate on this aspect of the package was compelling. It demonstrated that there would be significant increases in the use of diesel fuel, particularly in urban environments. The current definition, for example, brings four-wheel drives into the definition of small urban run-around vehicles.Diesel fuel has recently been shown to be highly carcinogenic and contributes considerably to greenhouse gas emissions. In fact, the committee heard conservative estimates that at least 65 more people, predominantly young children and the elderly, would die each year if the ANTS package goes ahead unchanged. Just last week, one of Ford's senior executives criticised this policy as being out of step with recent moves by our major trading competitors in Japan, in Europe and in the United States. In fact, Australia is the only country in the OECD to introduce these sorts of measures at a time when the trend is to give incentives for reducing fossil fuel use.With a little negotiation, the negative impacts of the GST on diesel would be easily and totally avoidable. With some very small and minor amendments, we can get a big change. We can still deliver the benefits to rural Australia in respect of the big vehicles used for rural transport. We can still deliver the 100 per cent to farmers. But it would make a very big difference if we made changes in respect of the tonnage of trucks and the size of vehicles used in our cities that would not be allowed to run on or convert back to diesel.Finally, I want to turn to the issue of compensation and whether or not the `compensation up' pathway leads to fairness. I do not think it does. The Senate inquiry concluded that adjustments to all of the following would have to be made if we went down that road: initial increase in social security payments, quarterly indexation of those social security payments, indexing the tax cuts, indexing family benefits, increasing the aged person bonus, rural industries assistance, zone rebates and family payments. The total of this benchmark compensation comes to around $5.9 billion. This compares very favourably with the $4.2 billion it would cost for our option on food. Even then we still have problems with losers. We still need to look at the compensation package and the way it is structured. Remember, of course, those 1.1 billion Australians who do not at the moment fit into any compensation package.EP5FERGUSONSenator Ferguson—You mean million, not billion.8U4Lees, Sen MegSenator LEES—Yes, 1.1 million. Thank you, Senator. I stand corrected. I have been talking billions for so long. They do not earn enough to pay tax and they are not eligible for social security. I am sorry, but I do not believe that is the road to go down. Unfortunately, we see close to us in New Zealand that what can be given with one hand by one government can be taken away with the other hand by another government down the track. I have to ask: why are we putting up the need for compensation and then looking for ways to undo it and make it fairer? We should not be looking at the road that increases the need for compensation in the first place.Finally, we will be pursuing our amendments on the Senate floor. I say to Mr Howard and Mr Costello that we will hold firm on our commitment to make this package fairer, to make this package more workable, more jobs friendly and more environmentally friendly. It is over to Mr Costello now to indicate his interest in talking to the Democrats. The next call is his and I am sure he knows my number.18:08:003901Ferguson, Sen AlanSenator FERGUSONEP5SALP10—I rise to speak in the second reading stage of this debate on the ANTS package of bills, and I do so bearing in mind that the Manager of Government Business has asked us to be as brief as possible because the important thing will be getting on with the debate of this legislation in the committee stage. While there are lots of things I would like to say and could say, I am quite happy to confine my remarks to those things that I think are the most important.The one overwhelming feature I have noted as I have moved around the community in the last 18 months—and remember this tax debate has been on the table for 18 months, because it is almost that long since I was first appointed to the Gibson committee to take submissions and listen to community propositions in relation to taxation reform—is that there is an overwhelming view that this country needs taxation reform. There is some dispute as to what form that taxation reform should take, and that is why we have had so many submissions throughout the course of our inquiry. But I must tell you that there is an overwhelming view in the community that the government is on the right track, that we do need tax reform and we need it urgently.Of the 1,500 or so submissions that have been received by the select committee of which I was deputy chairman we have had a number of submissions from interest groups, whether those interest groups be business or whether they be welfare groups, the Council of Social Service and all of those other groups who feel they have a particular interest in aspects of the tax reform package. The one group of people in Australia who have been overlooked in the whole of this package is the average Australian on average wages paying income tax rates that are far higher than they should be paying in relation to the wages they earn. If they lived in Australia 20 or 30 years ago, the percentage of their take-home pay that would have been taken out in income tax would have been considerably less than the income tax that is taken out of the wage earner's take-home pay today.While we have heard the social security side of the argument—we have heard from the Council of Social Service, we have heard from the Catholic Social Justice Council, and every welfare lobby in Australia has come to us—who has come to represent the average wage earner and give evidence on their behalf, seeking some relief for the enormous income tax imposts that they are currently paying, which have grown over the last 20 years so that their income tax represents such a high proportion of the income that they actually earn?I think it is time we sat and listened to those middle income earners, those people who at the last election voted for the return of the Howard government because they knew it meant that as middle income earners they were going to be recipients of income tax cuts, they were going to be recipients of family benefits that would make them better off than they are today. Those middle income earners are the people who have been forgotten in the whole debate that I have heard from opposition senators in particular, who have gone to every interest group and every welfare group and every group who has lobbied for a special section of their community to be either exempt, GST free, or to have special treatment. Very little has ever been said for average Australians.I want to say in my contribution to this debate that they are the people, they are the silent majority, who we need to listen to and who we need to look after. Over the last 15 or 20 years they have been neglected more than any other group in Australian society. Just imagine if you were a single income earning young family with a couple of children in a low paid job. Today the poverty traps are such that in many cases you would be better off if you do not work. The dole or the welfare payments that you would receive would exceed what you would receive by way of salary. The story has been told quite often about someone who is on an income of somewhere near $23,000 a year. If their boss were to say, `You are such a good worker that I'm going to give you $8,000 a year increase,' they would have to refuse it because they would be worse off.What sort of a taxation system is that? What sort of a taxation system have we inflicted on the Australian people that has been allowed to develop over a period of 60 years from when wholesale sales tax was first introduced? Where would we be if our communications industry was in the same state that our taxation mechanisms are in Australia? If we had not progressed them in the last 60 years, we would have been left behind. If we do not change our taxation system, we are in danger of being left behind again. I support totally the move of the government to make sure that middle Australians—those who work hard for a living, those who would choose to work extra to get on in this world—got some consideration and that we place some emphasis on their ability to work, their enthusiasm to work, to be productive and to earn more for their families.During the course of the inquiry much of the emphasis has been on whether or not food should be included in the GST base. Today I see that the Democrats have made another statement in relation to food. I did notice that the Democrats have called the statement `a defining moment for food'. This is the Irish option. I have nothing against the Irish. I know some wonderful people of Irish descent who live in Australia.ZS6QUIRKESenator Quirke—Senator Quirke!EP5Ferguson, Sen AlanSenator FERGUSON—I note Senator Quirke does too. There are some wonderful people of Irish descent. I am pleased Senator Cooney is in here as well. It is unfortunate it is called the Irish option.EU4O'CHEESenator O'Chee—What about me?EP5Ferguson, Sen AlanSenator FERGUSON—Sorry, Senator O'Chee. I forgot Senator O'Chee with his Irish background. I think the press release that Senator Kemp, the Assistant Treasurer, put out this afternoon is far more appropriately entitled `Democrats choke on food'. In fact the Democrats are going to choke on food because of the ridiculous nature of the proposals they are putting forward in relation to the exemption of food.ZS6QUIRKESenator Quirke—Not on junk food though.EP5Ferguson, Sen AlanSenator FERGUSON—Well, the Democrats suggest that tea, coffee, cocoa and milk will be GST free, but what about iced tea, iced coffee, flavoured milk or soy milk? I have no idea. I know, Mr Acting Deputy President Chapman, you are a great consumer of orange juice. I am not quite sure what they are going to do about orange juice because it does not say anything about it, not that I can see. Just imagine all those people who are going to watch the Crows play footy at Football Park next week.RD4BROWNHILLSenator Brownhill—Who's going to win?EP5Ferguson, Sen AlanSenator FERGUSON—I am not worried about who is going to win, Senator Brownhill. If the Democrats had their way, if you took your sandwich to the football, it would be GST free but if you buy the sandwich there or you buy a pie you are going to have to pay the GST.ZS6QUIRKESenator Quirke—No, you can't have a pie.EP5Ferguson, Sen AlanSenator FERGUSON—It looks as though you are not going to be able to have a pie, but you have this strange situation where they are going to now once again follow the options that have been taken in overseas countries where some things are GST free and some are not. Where do you put the dividing line? I noticed that Senator Lees even mentioned Senator Boswell and how she wished he was in the chamber. I am sure he would be pleased to know that the Democrats want to tax peanuts and roasted nuts. As a very loyal Queenslander, I am quite sure that Senator Boswell will not be too pleased to think that nuts are included in those things that are going to be taxed by the Democrats when they determine what food is.EU4O'CHEESenator O'Chee—Or the sugar industry.EP5Ferguson, Sen AlanSenator FERGUSON—Yes, or the sugar industry. Senator Murray got it right when he spoke to Meet the Press the other day. He said:I mean, essentially, if you go too narrow you make it too complex and if you go too wide there's a great deal of money at stake.The comment in the Australian was that it is not the government but the Democrats who are writhing and turning over in this debate. That is a fact. If you make it too narrow, you make it too complex. If you make it too broad, there is too much money at stake. So what do you do? Choose the Irish option every time because that gives you a little bit of leeway. In relation to what Senator Lees has said today and from what I have been able to glean from the information that was given at the Press Club, I have never seen a decision which will confuse the issue more than the decision taken by the Democrats today.We heard economic modeller after economic modeller, some of whom were not in favour of introducing a GST. I will be quite up-front about that. Some were not interested in a GST and did not prefer it, but they all said, `If you introduce a goods and services tax, make sure that food is included, because the only way it will work and work efficiently and effectively is to make sure that it is simple and efficient and that compliance costs are kept down.' They all said that the best way to deliver equity to low income earners and welfare recipients is to target compensation so that it reaches those who need it the most. There was not one economic modeller who demurred from that.Instead of listening to those people whose profession is economic modelling and drawing up systems and putting assumptions into models to try to work out whether or not what we are intending to do is going to benefit the people whom we want it to benefit, the Democrats have disregarded the advice of the economic modellers who said to keep food in and have come along with their own hotchpotch idea of the Irish option where things like tinned spaghetti meals will not be taxed but the same spaghetti meal served in a plastic ready-to-eat container will. How ridiculous can you get! Tinned caviar is GST free but fish fingers are taxed. It is a really good system! I can imagine that some of my colleagues who are in the legal profession will have some friends who will absolutely be making a fortune.ZS6QUIRKESenator Quirke—They don't eat fish fingers, though, Senator.EP5Ferguson, Sen AlanSenator FERGUSON—Senator Quirke, they do not all eat fish fingers; I will agree with you there. But what will happen is that we will get to a situation which was described by none other than the Tax Commissioner as a recipe for disaster. If you want to talk about food and talk about recipes, what the Democrats have done today is provide us with a recipe for disaster. You will not find it in any cookbook, but you will find that, just as the Democrats have tried to cook the books with this issue, they have in fact come up with a process which simply is not feasible.I only want to make a couple of closing comments. In recent days we have heard the Democrats say that up to 4.9 million Australians will be worse off under a GST. They have done pretty well. I hope they do not put out too many more press releases, because a week ago it was only a million. They have now got to 4.9 million. There are only 18 million people in Australia. I reckon that three or four more press releases and we will have more people worse off than we have in the whole of Australia. We will see how they go.What the Democrats have done in determining that figure is to use NATSEM's figures—that is, the figures of Professors Warren and Harding—but they have taken the worst possible option, the worst and the most unrealistic assumption, the option which Warren and Harding themselves have discarded because they say it is totally unrealistic. I am talking about option 4, which has a higher inflation figure as a result of lopsided assumptions and only includes a 70 per cent pass through of savings. In other words, as Professors Warren and Harding said in their report to us, and I will read it so I get it right:"It is important to recognise that this 70 per cent scenario should not be viewed as the standard case. A strong defence can be mounted for the ANTS assumption of 100 per cent shifting forward.""The preferred position is probably to exclude the effects of tobacco excise from any distributional impact analysis." "Good reasons therefore exist to exclude new home price increases from the distributional impact analysis, as was the case in the ANTS report.""So which measure of the impact of the tax reform package . . . is the most appropriate? For the reasons noted earlier, the methodology adopted in Option 3B, where the tobacco and new home prices are excluded, is probably the most appropriate."Why don't the Democrats like that? Because when option 3B was modelled it showed that every single group in Australia benefited—every single group. They modelled 547 different household types from pensioners to families to self-funded retirees on all sorts of income levels and found that every single household group would be better off—every single group.So, if the Democrats want to use shonky figures and unrealistic assumptions which the modellers themselves said were unrealistic, and come up with a figure of 4.9 million Australians who are going to be worse off using that scenario, they ought to be treated in the way they deserve to be because they are using unrealistic assumptions, and even the modellers themselves said that. I have gone longer than I said I would to the Manager of Government Business in the Senate, but there were a number of things that I thought were important to get on the table in this debate.It is 18 months since I started on Senator Gibson's committee listening to submissions. It is 18 months that we have been working on this tax package. It is 11 months that we have been hearing 700 submissions from the Gibson committee. Then we went through the election campaign after the package was announced for another five or six weeks and we had five months of inquiry with the select committee. I said to my wife the other day that I have had tax just about up to here, which is just about over the top of my head.This taxation debate has continued for far too long. It is time that we in the Senate deal with this matter, that we deal with it speedily and that we make sure it is done so the whole proposals can be put in place. We should ensure it is dealt with by 30 June this year so on 1 July 2000 we can in fact implement this new taxation system, which is good for Australia, good for the Australian people, good for the Australian economy and good for our future.18:24:003904Cooney, Sen BarneySenator COONEYSF4VICALP00—Senator Ferguson said that the debate about taxation—although I think he meant this particular aspect of taxation—has gone on too long. The debate about taxation has been going on for centuries because it is a debate about how resources are to be gathered from the community to pay for the various things that the community needs such as schools, a good environment, defence forces and good health, and those matters have been touched upon for a long time in parliaments like this.It is said that this is a new tax system. Whether it is a new tax system or not, at the centre of it is the consumption tax, the goods and services tax. A tax upon consumption is not a new issue and is not a new tax, and an illustration of that comes from looking at the Rights of Man, written by Thomas Paine in 1792. I will read this on the following basis: to show that the issue of a tax on consumption has long been an issue in places like this. We, of course, inherit our system from England, and Thomas Paine was writing in respect of England at the time but it does illustrate the issue of tax on consumption and it does show that we are not dealing with a new tax in that sense but with an old concept which has again been brought up, has again been reinvigorated for the purposes of the new tax system.The sorts of objections that we are putting up now were put up then. Not only is the tax an old concept; so too are the arguments against it, which we on this side of the chamber say are very accurate and very compelling. In that context, before we rise for dinner, I will just read from the Rights of Man by Thomas Paine. He is talking about the House of Lords, which is presently under scrutiny in England, and he says that they, in 1792, were approaching things in terms of their own interests as land holders. He says:What pillar of security does the landed interest require more than any other interest in the state, or what right has it to a distinct and separate representation from the general interest of a nation?He is referring there, of course, to the House of Lords. He goes on to say:The only use to be made of this power, (and which it has always made,) is to ward off taxes from itself, and throw the burden upon such articles of consumption by which itself would be least affected.He goes on to say:That this has been the consequence, (and will always be the consequence of constructing governments on combinations,) is evident with respect to England, from the history of its taxes.Notwithstanding taxes have increased and multiplied upon every article of common consumption, the land-tax, which more particularly affects this `pillar,' has diminished. In 1788, the amount of land-tax was £1,950,000, which is half a million less than it produced almost a hundred years ago, notwithstanding the rentals are in many instances doubled since that period.Before the coming of the Hanoverians, the taxes were divided in nearly equal proportions between the land and articles of consumption, the land bearing rather the largest share: but since that era, nearly thirteen millions annually of new taxes have been thrown upon consumption. The consequence of which has been a constant increase in the number and wretchedness of the poor, and in the amount of the poor-rates. Yet here again the burden does not fall in equal proportions on the aristocracy with the rest of the community. Their residences, whether in town or country, are not mixed with the habitations of the poor. They live apart from distress, and the expense of relieving it. It is in manufacturing towns and labouring villages that those burdens press the heaviest; in many of which is it one class of poor supporting another.The same can be said about the goods and services tax.Sitting suspended from 6.30 p.m. to 7.30 p.m.SF4Cooney, Sen BarneySenator COONEY—Before the dinner break, I was talking about the concept of the goods and services tax, the concept of a tax upon consumption, and I was saying that that concept is not new, so to call this a new tax package is perhaps a misnomer. I was quoting from Thomas Paine's book the Rights of Man , which talks about a consumption tax and its impact on the poor back in 1792. The point I want to make is that this is not only a tax that has a long history in its imposition; it is a tax whose disadvantage to the poor is long recorded. `Poor' in those days meant other than those who were aristocrats.It is interesting to look at the works of other people who were writing at that time. In that context, I will quote from a work by Sir John Sinclair, The History of the Public Revenue of the British Empire, whose third edition was published in 1803. It is very interesting to read him talk about the impact upon the poor. The note that is written against these words I am about to quote says, `Consequences of taxing the necessities of life'. The passage says:The excises levied on what may be called the necessities of life, exclusively of coals, which has been already taken notice of,—he had already written about that—and salt, to be afterwards mentioned, but including candles, leather, soap, and starch, are on an average above a million.It is said that the levying of these duties, so considerable a part of which must necessarily fall upon the poor, has the effect of raising the price of labour—And then he goes on and talks about other issues. He talks about, first of all, the effect on the poor and the effect on labour, and he says, `That is right. It does do that, but it has some good sides to it.' He says:It is remarked in manufacturing towns, that their commerce never flourishes so much, and is never carried on to such advantage, as when, from the high price of provisions, the workmen are compelled to labour with uncommon assiduity. Though a considerable part of the above taxes is paid by the poor, yet the rich are far from being exempted—There are two things about that which are part of the argument in favour of this new tax system. The first is that people have to work harder. If there is an increase in prices, then they have to work harder for that. That does not refer to the poor, as we understand it; that refers to people who are earning a wage or are on a salary. If this impacts upon them, then the cure for that is to work harder, but that is a concept that not everybody might agree with because people do work very hard these days. The hours that are spent at work and the intensity of that work is getting beyond what is reasonable, and to expect people to work harder is not right.The second argument I want to refer to is the concession that this does fall upon the poor, but it also falls upon the rich. That is an argument that is again run, if I can use that expression, today—that nobody escapes from the goods and services tax and, even though it might fall heavier on the poor, nevertheless, it falls on everybody. That it does fall upon people in society who are less able to bear the increase in prices is borne out by the fact that compensation is going to be paid here. The point has been made again and again in this debate that compensation is going to be paid to offset the effects of these taxes.The answer to that, which has been given by speakers before me, is that it is better to give people the opportunity of getting goods at a reasonable price than to force them onto compensation. So they should be able to buy without the help that is extended. In other words, they should not need help; they should be able to buy the necessities of life from their own efforts.There has been an argument—and it is a correct one, in my view—that taxes, wages and social security should all be seen as part of the one system. But that is not simply a matter of doing the right thing by the vulnerable and the poor; that is a matter of doing the right thing by society as a whole. In other words, the payment of resources to people in society who cannot as readily obtain them through their own efforts—in other words, by giving out pensions and compensation—helps not only them but society as a whole.Again I go back to history, and I think this will be my last reference to it. I am fascinated by the fact that the sorts of arguments we are having now are the same as those that have been had over the years, and the material I have been quoting comes from people who lived about 200 years ago. I quote now from material which was written as recently as 1913, in French. I will not read the French version but its English translation.AX5EVANSSenator Chris Evans—Is it a letter to you?SF4Cooney, Sen BarneySenator COONEY—No, Senator Evans. This comes from Halevy's History of the English People in the Nineteenth Century , Volume 1, which I know are you most familiar with.2L6BISHOPSenator Mark Bishop—You should read it in French; we would be familiar with that.SF4Cooney, Sen BarneySenator COONEY—Yes, I should have brought the French version, Senator Bishop, but this is the English version. This extract speaks of the poor rates that were then imposed upon people to pay for those who were not well off. These rates were imposed upon landlords and occupiers of land, and it was said that one would have thought those people would object to the paying of this sort of tax. The point being made by the historian Halevy is this: those people were not reluctant at that time to pay that tax because they were concerned that society would otherwise become restive. This was around the time of the French Revolution and its aftermath. Halevy says:In the second place, since the war, the justices and the landlords—the people who were administering and paying the taxes for the poor—the governing classes in general, and in particular those who administered the Poor Law, were obsessed by the fear that an agrarian revolution might occur in England as in France; not to speak of an industrial upheaval which France had been spared in 1792. In their opinion the poor rate was an insurance against unrest; and they were prepared to pay an enormous premium to safeguard themselves against this terrible danger. I am not suggesting for one moment that Australia is in a state of unrest in the sense Halevy speaks of there. But I do say that a good society, a society that is well balanced, a society that functions well throughout, needs to ensure that everybody in that society has a stake in it; also, that those of us who are able to contribute to the way a society is run and able to contribute to those who are less well favoured ought to do so not only in the interests of those who are less well favoured but also in the interests of ourselves, and generally. People have come to realise that this is so. The government gives the answer that compensation will be paid. But it has been pointed out—and, I think, very effectively—that that compensation will not be sufficient and, in any event, in a sense, it demeans those who have to receive it.There are many problems with this new tax system. I have not investigated it in the same way as have those who have been on the committees looking at it. Also, to a certain extent, what I have said has been impressionistic. But my impression is that there are many problems with this tax, and that has been conceded. I believe I have read enough and listened enough to say that my impressions of this tax are likely to be right.In support of that statement, I look at the main report from the Select Committee on A New Tax System, which has been quoted extensively throughout the debate. Just looking at the table of contents, we see the problems. There is `Economic Modelling' about which there seems to be insufficient agreement. There is the issue of `Local Government' in chapter 3. Chapter 4 is `Impact on Low Income Groups and Compensation'—and I have already commented upon that. There is `Proposed GST on Food'. I think that proposal shocks everybody. Even people who say, `No, it has to remain on food,' do so through gritted teeth, in the sense that they realise there is something a little bit wrong. Even those most in favour of having a GST on food say, `Look, there really are some problems about putting this extra tax on the necessities of life.' The index goes on with `Impact on Australian Business' and impact on `The Arts, Cultural and Sporting Activities'. I think it is conceded generally that the GST is not good on those things. Then there is the impact on `Education', and so on.This new tax system is based on old concepts and contains all the problems engendered by those old concepts. In spite of the investigations that have taken place and the changes that have been put in place, just as they were problems 200 years ago, so they are problems today. We ought to have another look at what a proper tax system should contain.19:44:003907Bishop, Sen MarkSenator MARK BISHOP2L6WAALP00—Madam Acting Deputy President, thank you for the opportunity to make a contribution to this debate concerning the government's proposed new tax system. As we all know, the new tax system has been discussed extensively around Australia since last July. We have had almost 12 months of discussion around the tax system, and many possible alternative variants have been floated.Many individuals in our nation have firm views on a whole range of relevant issues: the wholesale sales tax system as it exists at present; the proposed goods and services tax; the elimination or replacement of incidental or transaction taxes; the reduction in corporate taxation rates and to what level, if any; the alteration of PAYE tax scales; the quantum of compensation; the form of compensation; which sector of the community should receive compensation; the utility or otherwise of the range of minimisation measures proposed by the government; and a lot of discussion, almost an excess of discussion, about models and modelling and their effects.I must say at the outset that I am sure there is a lot of value in this discussion about modelling, but it seems to be somewhat archaean and to centre around the interests of aficionados in this debate. All of those issues have been fully fleshed out by both the government and the opposition, and there is plenty of argument which addresses those issues in the relevant, recently tabled Senate reports. I am sure a lot of my colleagues are more capable than I am of addressing the nuts and bolts of those issues.This leads me to put on the public record what I regard as the important priority in this ongoing debate. As one of the submissions to the public inquiry said, it is useful in developing a framework of analysis to have a number of core principles which should guide deliberations in this important matter. It seems to me that there are three core principles which policy makers would be wise to have regard for in this debate concerning a new tax system for Australia: firstly, a recognition that the family is a fundamental group in our society; secondly, that a standard of living consistent with human dignity is or should be the fundamental right of all Australians; and, thirdly, that it is appropriate for government to support families and that such support should be consistent with an absolute priority to be given to low income families.Low income families tend to be those dependent solely on award based income or income marginally higher than that offered by the relevant award or enterprise agreement. For a single income family it is in the order of $18,000 to $24,000 per year; for a dual income family it is in the order of $28,000 to $34,000 per year. The work of those low income earners is unskilled or semi-skilled. They are often dependent on the vagaries of the economy and may be commonly found in the working section of our population, in manual occupations or emergent service industry occupations—occupations like labourer, trades assistant, driver, storeman, cleaner, shop assistant and barman come readily to mind in those classifications.A feature of all these industries and the major occupations found within major industries is an increasing proportion of casual and part-time work—non-full-time work—which leads to less than adequate incomes to enable people to marry, raise a family and build the life that all Australians regard as their birthright. Low income families effectively spend all of their income in order to meet their needs to sustain themselves at adequate levels. They have little, if any, discretionary income. Indeed, recent debt and credit statistics show that an increasing and alarming number of Australian families are now dependent on debt to survive, and debt servicing is becoming an increasing proportion of net income.It is clear that middle and high income earners—those who have income streams unrelated to work, those who have the ability to plan and arrange their incomes and finances to minimise tax obligations—will benefit from the government's package. They will benefit because they have the benefit of receiving income which allows them choice as to how they spend or dispose of that income. In an ideal world, we would all like that choice. Low income families do not have that choice. If there is an increase in the cost of living, accepting that low income families are already spending all or nearly all of their income to meet those needs, it follows that any increase that is not compensated must have an impact on the standard of living of those low income families.In this context, it is trite to say that taxation is a major drain on the income of low income families. NATSEM research shows that federal, state and local government taxes on average are 48 per cent of family income. About one-fifth of weekly income goes in weekly income tax. Indirect taxes levied by the Commonwealth, including wholesale sales tax, excise duty and customs duty, take up to 22 per cent. State and local government taxes—notably land tax, stamp duty, payroll tax and, increasingly, gambling taxes—absorb about 20 per cent of the tax take. Local council rates account for another 4 per cent of taxes.Overall, the least wealthy one-fifth of households pay 36 per cent of their total income in tax. Importantly, families with children are the hardest hit by indirect taxation. They pay, on average, 48 per cent of their income on tax. That outlay grows as children grow and consume more in their formative years. All tax systems can be improved. There is no perfect tax system, and the current Australian tax system is not perfect. However, some imperfections have been exaggerated by the current government, and some have been ignored altogether. Some problems that currently exist and cause harm to ordinary Australian wage and salary earners include the following four points. Firstly, the taxation system is not simple and is not easily understood. There are various complications with respect to deductions that can be made. This is often unfair as it treats similar taxpayers and taxpayer entities differently.Secondly, the taxation system is unfair as it treats PAYE and non-PAYE taxpayers differently and has directly led to the large increase in self-employed workers under the guise of independent contractors. The continuing failure of government to adjust or index tax rates to take account of wage movements leads to many low and middle income families being forced into higher tax brackets, although the actual value of their wage has not significantly changed. The tax system is unfair as it allows certain individuals to set up family trusts, shelf companies and other avoidance mechanisms to avoid or minimise taxation obligations.Thirdly, the taxation system creates poverty traps. This issue has become rather topical of late, and part of the government's new taxation system attempts in a minor way to come to grips with this problem. NATSEM, in recent research of working families and their associated income tests, looked at a low income family with three children. They found the family is financially worse off if the mother works between 10 and 24 hours a week rather than just nine hours. By increasing her hours of work from five to 35 hours per week, the family benefited by only a miserable $12 per week. That particular study concluded that for many families the joint impacts of tax and overlapping means tests for government programs meant there was little benefit for some types of paid work.Indeed, NATSEM research conclusively demonstrated that high effective marginal tax rates often render participation of both spouses rather than one in the paid work force as having only a marginal benefit. That research by NATSEM found that some families actually keep less than 20 cents from the extra dollar of earned private income due to the combined impacts of income taxes and the withdrawal of means tested government assistance. To make matters worse, many low income families are denied access to family payments. Initially, these payments were available on a fairly reasonable basis. There was widespread access to them. But now many low income families no longer receive the non-HCCA component of the parenting allowance. This is because of the very stringent income test provisions applying to this payment, which mean that only those on exceptionally low incomes receive it. The fourth point is in respect of payments by government to families. It should be noted that the real value of family payments has declined over time and fewer families receive the full current value of these payments. There are significant problems in the current tax system which particularly and inequitably impact on low income families. These problems, as I identified, include: the lack of simplicity in the system; the unfairness in the system between PAYE and non-PAYE taxpayers; the real problem of the taxation system creating poverty traps for working families and perversely acting as a serious disincentive to work; and, finally, the stringent means testing of many government payments, particularly family and parenting allowances, resulting in fewer and fewer families benefiting from government redistribution and assistance policies. The situation will soon become so bad that assistance programs for low income families will only go to welfare dependent families. Families with one or two incomes will receive little benefit. In time they will legitimately question the whole basis of the welfare system and ask why there is little, if any, benefit for them.Let us now turn to the proposed taxation reform package. The coalition promise improvements in three areas. Firstly, they argue that the reduction of effective marginal tax rates will lessen the impact of poverty traps. They argue that this is a major reason for supporting the entire package. As I have just argued in this area, their reforms are minor and at best on the margins. They do not eliminate poverty traps and they do not go a significant way to doing this. At best, it is mere dressing. Secondly, the coalition argue their proposals to reform fringe benefits tax and family trust provisions result in more equity in the taxation system. Again, this is true on the margins, but nowhere near enough is done to get rid of tax avoidance. Thirdly, the government argue that government payments over time will lead to a less confusing taxation and social security system. This may be true, but the real problem over time is the increasing number of low income families who are being denied access to traditional government assistance. The inadequacy of family support payments needs to be addressed in the new taxation system. However, the key feature, as we all know, of the coalition tax reform package is the proposed GST and the proposed tax cuts. Both are essentially regressive as they benefit high income earners at the expense of low income earners. Consumers will pay this tax for all goods and services on which they spend their money each week: all food at the supermarket checkout; all shoes, clothing and other necessities; all home services such as gas, electricity, water, telephone and rates; all doctors' bills, prescriptions, medicine and other health expenses; rent and mortgage payments; all insurance premiums; and all sporting, leisure, recreational and gambling activities—in other words, virtually everything an ordinary family spends their income on would be subject to a GST. Low income families already spend most, if not all, of their weekly income. High income earners often save, or at least have the capacity to save, a substantial proportion of their income. Such savings are not taxed by a GST. Hence those in a position to save also benefit from a GST. Consequently, it is not surprising—although it is certainly a matter for concern—that the ACOSS research has shown:. . . households would be on average $7.69 out of pocket but Australia's high income earners—with weekly incomes averaging $855—would benefit by $9.41 a week.Thus it is clear that under the proposed tax package high income households will gain substantially whilst low income households, including pensioners, unemployed people and sole parent families, will lose. ACOSS commissioned Neil Warren of the Australian Taxation Studies Program to identify the impact of higher consumption taxes on households. That research has shown:. . . at the bottom end of the income scale—the lowest 20%—married pensioners would lose $15.36 from average disposable income of $383 a week and single pensioners averaging $232 a week would be $8.92 worse off.ACOSS goes on to state:Unemployed households and sole parents in the bottom 20% would be $13.14 per week and $13.80 out of pocket.Families with one parent working would see average weekly disposable income fall by $7.31 a week from $590. Couples without children—averaging $457 a week—would see income fall by $7.45 per week.The bottom 20% of households working part-time, self-employed or relying on superannuation and investments—averaging around $300 a week—would lose more than 3% of disposable income, $10 a week.At the high end of the income scale, the top 20%, working couples with children would increase their weekly disposable income of $2,326 by $24.88 a week and couples without children would see $19.81 a week on top of their existing $2,455 a week.They go on to say:Households with one parent remaining at home averaging weekly disposable income of $1,731 would gain $13.15.. . . . . . . . .Self funded retirees, with weekly disposable income of $1,127 from superannuation and investments gain $30.17 a week.Having demonstrated that the new reform package of the coalition is at its heart regressive and unfairly penalises low income families and low income earners, let me suggest a number of measures that could be categorised as desirable reforms in this area. As the coalition parties aim to benefit high income earners, I believe that the reform package should be targeted at the lower end of the scale and accordingly I support significant tax relief for low and middle income families, with the greatest relief to those families at the bottom end of the income scale.As wages are adjusted, so too should be the tax scales so that low and middle income earners are not pushed into higher tax brackets. There needs to be serious attention paid to the elimination of tax avoidance schemes, and targeting of family trusts would be a worthwhile initiative in this area. Similarly, poverty traps need to be eliminated so that families seeking to earn sufficient income are not penalised financially because one or both of the partners gains extra work. Finally, family payments need to be increased to realistic levels.Any worthwhile taxation system would incorporate these features. The key features of the coalition's package do not seriously address these issues as they affect low income families. Accordingly, this package of bills should be rejected.20:02:003911Brown, Sen BobSenator BROWNQD4TASAG00—by leave—I move two amendments to this package of legislation. The first is to A New Tax System (Goods and Services Tax Transition) Bill 1998. I move:At the end of the motion, add "but that the Senate:(a) notes that the Government's proposed $3.5 billion reduction in taxes on diesel will result in: (i) increased greenhouse gas emissions; (ii) increased air pollution, especially in urban areas; (iii) reduced markets for solar and wind energy; (iv) the demise of the oil recycling industry; and (v) contraction of gas-fuelled transport; and(b) considers that taxes on diesel for road transport should not be cut".The second is an amendment to A New Tax System (Australian Business Number) Bill 1998 . I move:At the end of the motion, add "but that the Senate considers it wrong to impose new taxes on not-for-profit community groups working in the public interest".I will come back to those matters a little later. First, though, let me nail the Deputy Leader of the Government in the Senate by exposing the weakness and in fact the falsity in the government's argument that Australians would be better off with this tax package. Just today in here Senator Alston said:. . . 81 per cent of people are better off as a result of the change in the system. Ipso facto, 19 per cent of the people will be worse off, by government admission—three million-plus Australians. I await Senator Alston's response to what he said in question time today. Here from the government itself is a statistical admission that more than three million Australians are going to be worse off under this tax package. We do not have to ask which ones. They are going to be the poorer, the people already on low incomes, those who are having the hardest trot of the lot, including indigenous Australians.This tax package is going to lead to an increase in the gap between the haves and the have-nots in Australia, between the rich and the poor and between the powerful and the powerless. It is going to accelerate the disturbing trend in this nation under successive Labor governments and now this conservative government of the increasing gap between the poor and the rich, as we have seen in the United States where there are some 35 million people living below the poverty line. Those of us who have been there will attest to the numbers of people begging on the streets—the panhandlers, the people who simply cannot make ends meet because they do not have an income or receive social welfare or because if they do get either of those they still do not have enough to feed and facilitate themselves and their families.In particular, there is now no doubt that this tax package is going to attack those people in Australia working because government has defaulted in delivering welfare and a fair go to all Australians. I am referring here to community groups and non-government organisations. The common theme in the argument from such groups against this GST package has been that it will be forbiddingly expensive for such organisations to implement. Our calculation is that another $100 million-plus would have to go to such organisations just in Tasmania—with three per cent of the country's population—if they were not going to be worse off in their community activities whatever they might be under the GST. Such groups will lose income, sometimes substantial, because subscriptions and fundraising will be taxed.The GST applied to community groups is essentially a tax on volunteer work. People in this field will attest to the fall off in voluntarism in this nation since the heydays of the 1980s. I believe that one of the underlying factors there is the realisation by many overworked volunteers that they are being taken for suckers by successive national governments, but none so much as the Howard government. People are saying, `Why should we give up our time? Why should we give up our money? Why should we act as volunteers to fill the deficit which occurs as this government continues to cut community welfare and community services, not just marginally but by billions of dollars each year?'Now on top of that, those community groups which utilise volunteers are going to find themselves faced with awesome added costs as the government moves even to tax them. Those community groups are aware that the hardship they face is not being visited upon corporate Australia and the wealthy in Australia. They realise that serial adjustments to the taxation system in this country, including this package, are transferring the wealth, sweat and labour of volunteers in this country across to the already wealthy and that this is being fed into the profit lines of a booming stock market and the take-home money and spending ability of those people who are already wealthy at the expense of the poor or the people who work for the poor.This package is going to put almost impossible extra burdens of work on voluntary treasurers in organisations throughout this nation—people who work for Little Athletics through to surf lifesaving and charitable organisations. Volunteer treasurers are going to become a much rarer species as these organisations have to take on professionally paid experts to deal with the GST and therefore give good money to pay for professional services at the expense of the people to whom they deliver such services. And, of course, low paid workers and charities will be hit by changes to the fringe benefits tax.I did not miss the statement that Senator Lees, the Leader of the Democrats, made on television on 4 March. She said, `I think the question as to whether or not charities will be worse off has been answered, and it is yes.' This is the very point on which the Greens went to the last election. We appealed to the Democrats not to cushion the GST through the elections because, amongst others, charitable organisations around this country were going to be hit. We had done our homework. We understood the impact this was going to have on community groups, but we did not have the firepower and we did not have the public and media space that the Democrats had when they said to this nation, `We will cushion this GST if you take it off your worry list at these elections.' `We will be the agents of a nice GST,' said the Democrats. `We will take food out. We will make sure you are not worse off because we will have the balance of power in the Senate.' And I will come back to this in a minute.The GST will impact on the poor and on the organisations which work for them—whatever it might be further down the line—precisely because the Democrats cushioned this tax package through the last elections by telling the electorate at large, `We can make it better. We can make it nice. Don't worry about it; vote on other measures.'Let me give some specific examples from evidence that has been forthcoming post-election of what the GST might do to various people and groups in this country. It is unfair that 15,000 members of the War Widows Guild of Australia in New South Wales, with an average age of 76, should have to pay a GST on the maintenance costs of home units that they have built for their needy members. It is unfair that there will be a rise in subscriptions from $20 to $22 for those elderly members on low incomes. That will be too much for many members, who are subsisting on a meagre pension, to be able to cope with.It is unfair that the community club at Dulwich Hill Public School in Sydney should have to charge the GST on food sold through the school canteen and on presents that children buy at stalls on Mother's Day and Father's Day at the school. The GST is effectively a tax on the voluntary work of the parents who run the canteen and stalls. It is unfair that ethnic and multicultural broadcasters, who mobilise 3½ thousand volunteers in Australia to provide 1½ thousand hours of broadcasting in 90 languages each week, should have to lose 3½ to six per cent of their gross income because of this GST package. It is unfair that the ACT Monaro District Golf Association, which is non-profit and has no employees, should have to pay a GST on its income from affiliation fees and entry fees. The increased costs and administrative workload could spell the end for smaller golf clubs and, of course, other similar recreational and community service outlets from many small country communities.It is also unfair that the West Australian Deaf Society should be $49,000 a year worse off under the GST and have to increase the cost to deaf people for its interpreter services because of this tax system. It is unfair that Company B—the Belvoir Street Theatre in Sydney—will be $24,700 a year worse off under the GST. Everywhere you look you see that people providing for the wider benefit of the community are going to be hit by a government which, I submit, has already cut billions of dollars from essential services in this country.Beyond this, what should we be doing? I will not elaborate again on the Greens' alternatives. We should not be using a fifties, sixties and seventies tax from elsewhere, now outmoded and superseded, when there are better taxing alternatives. The Greens have been pointing to eco taxes which give incentives to those people who do the right thing by the environment, in the widest sense of that word, right throughout our community from the bush to the cities, and which penalise those people who do the wrong thing—the polluters, the despoilers; those who work against the environmental amenity. These taxes are implemented in Europe. They raise billions of dollars in countries like Sweden, Denmark and Germany. But this tax package not only does not address that alternative; it is also going to block the path to that alternative for a long time to come. Worse still, it goes in the opposite direction. This tax package will give a $3 billion per annum windfall to fossil fuel guzzling industries in Australia which are polluting our environment, including the living environment of all Australians, and adding to the global warming phenomenon which itself promises to have massive economic as well as environmental consequences for the next generation.It is almost unconscionable that, in a world in which Australia has been seen as recalcitrant and dragging the chain on its environmental responsibilities, this Howard government should actually be giving a $3 billion a year incentive to the transport, mining and logging industries to use more fossil fuels. I note that the Democrats have said, `Well, let's have a halfway house here. Let's only give them a little bit. Let's preserve it, and'—I would agree with this—`let's not add further tax imposts to the rural community. Let's preserve it for some other activities, for example trucks carrying 20-tonne loads or more,' which I presume means every woodchip log carrying truck and mining truck in the nation.I do not believe one dollar extra in tax incentives should be given to the big mining and logging corporations as an incentive for them to go about their work. I believe the incentives should go to those industries which are doing the right thing. But what is the Howard government doing? As far as solar power and wind power, the clean green alternatives, are concerned, it is going to add a GST to those industries. So, on the one hand, it gives an incentive—billions of dollars—to the polluting part of modern industry and, on the other hand, it actually adds tax, a disincentive, to the clean green alternative.I today picked up in the Parliamentary Library an article called `Painting China Green' from Foreign Affairs magazine, a US journal which is conservative, to say the least. Let me read to you two excerpts from this current edition. It says:According to the World Bank, water scarcity and pollution alone annually cost China about $14 billion in lost industrial output and about $24 billion in crop loss. The health costs of air pollution will skyrocket—reaching $98 billion by 2020.Perhaps the most dramatic example of the costs of China's decision to trade the environment for economic growth was 1998's flooding of the Yangtze. Official indifference and decades of poor environment choices—failing to protect wetlands and clear-cutting forests for timber, farmland, and industrial development—contributed to the unrelenting floods which killed more than 3,000 people, destroyed 5 million homes, and inundated 52 million acres of land. The economic losses are estimated at more than $20 billion.This story, written by the fortunately named Elizabeth Economy, says:If fully understood and thoughtfully addressed, however, China's environmental problems offer a unique opportunity for the United States to cooperate with China on a vital issue.The vital issue of the environment. She goes on to say that these environmental activities are a multimillion dollar potential. She also says:. . . as the United States attempts to reduce its growing trade imbalance with China, it should not overlook the sale of technologies and products protecting the environment. The World Bank estimates that between 1995 and 2004, China will require about $100 billion of infrastructural investment in water conservation, treatment, and sanitation. The market for environmental goods and services, already estimated at around $4 billion, is growing rapidly.That is our future. Where is our attempt to capitalise on this market to the north? This government, through this tax package, is killing it. The United States is way behind Japan, says that article, in capitalising on these emerging clean green industries for the future—with, I might add, hundreds of thousands of potential jobs. But here in Australia, with this tax package, the Howard government is giving billions to the fossil fuel industries and is actually adding the impost. It is killing the clean green future coming from such industries as solar power and wind power.Let me conclude by coming back to the Democrats. They did cushion the tax package through the election. They lowered the angst that was out there in the community. They said, in effect, `We can make this a better tax. Relax. Vote on other issues.' But we now have the list of Democrat amendments. They want to zero rate food, inbound tourism packages, books, legislated and regulatory services of local government, local government community services run on a not-for-profit basis, public transport, renewable energy equipment, grants to arts and cultural organisations, some forms of sponsorship, telecommunications equipment for the hearing impaired, government approved therapeutic goods, complementary medicine, goods with a specific public health benefit, membership fees for charities, fundraising by charities, hire of facilities and associated catering by charities, advertising by charitable institutions, fees for recreational programs for under 14-year-olds, lifesaving and first aid, tuckshops, purchases by libraries made on a not-for-profit basis, educational institutions, not-for-profit parent and teacher organisations, and adult and community education courses.The government is not going to wear that. As one headline said today: `The Democrats have been left out in the cold'. They are responsible for this package, but the deal will now be done with the Independents. If the Prime Minister can buy the states, I submit to you, Madam Acting Deputy President Reynolds, that the Independents are also going to be able to pass this package with or without the Democrats. (Time expired)20:22:003914Mackay, Sen SueSenator MACKAY9L6TASALP00—What we have before us is a tax package that is fundamentally unfair. I am going to deal tonight with three particularly unfair elements of the package: its impact on local government, its impact on regional Australia and its impact on my home state of Tasmania. This government has cut local government out of the picture every step of the way. Repeated requests by local government representatives for consultation prior to the announcement of the tax package were ignored. Repeated requests by local government to have its concerns addressed since the tax package was released have been ignored. The Howard government has consistently ignored local government's serious reservations about the GST and tax package.Local government has been excluded because local government is being dudded. The Howard government has shown utter contempt for local government across the board, hinting at the abolition of the National Office of Local Government and now wiping its hands of any semblance of Commonwealth involvement and support for local government. It is pretty clear that the Prime Minister has given the Minister for Regional Services, Territories and Local Government the job of doing himself out of a job.The major concerns local government has raised, and which have been ignored by the government, are as follows. The many services and facilities that councils provide to their communities on a not-for-profit basis, subsidised by rates and small user fees, will be subject to a GST. This could include swimming pool fees, senior bus services, school holiday programs for kids and a whole plethora of activities. Councils provide these services because their communities expect them to and because no-one else will. People already pay for these services through rates and small fees, and to slap a GST on top is just plain unfair. It is, in fact, a tax on a tax.Local government Commonwealth financial assistance grants will no longer be paid to local government by the Commonwealth. FAGs funding is to become the responsibility of the states as part of the GST deal. The Commonwealth and the premiers have included the transfer of local government funding to the states in the premiers' agreement—an agreement that local government had no say in. This agreement includes an opt-out clause that will enable the states to vary the functions and the role local government and, thus, its funding—so much for guaranteed funding.Local government expects the start-up costs of administering the GST to be up to $1 million per council, based on the Municipal Association of Victoria's estimates, and up to $100,000 per annum after that. However, the government has claimed that the cost of administering the GST will be minimal for local government and has refused to extend the small and medium business compensation package to local government.Local government has rejected the government's estimated $70 million saving as a result of the GST as simply not credible. Treasury has failed to produce modelling that proves it. The Office of Local Government claims that they have undertaken no such modelling, nor have they been asked to undertake the modelling. Not surprisingly, local government rejects this figure, and Labor challenges the minister to provide even the most perfunctory rationale for the figure. Each of these concerns highlight just how unfair a GST is. This is why the position of Labor is clear: we oppose the GST. At the General Assembly of Local Government last year, some 700 local government representatives attended, and they passed the following motion:That the General Assembly calls on the Federal Government:1. to admit ALGA to the special tax reform Premiers' Conference to allow Local Government to press for:. rejection of any proposal to transfer responsibility from Local Government FAGs to the States and Territories; and. allocation of a 6 per cent share of a GST as Local Government financial assistance to be administered by the Commonwealth, under the current principles; and. access to the compensation funds available to business to offset administrative costs occurred in the transition to a GST.2. to ensure that, in determining the scope of `commercial activities', activities of local government should not be subject to a GST:. where the activity embodies a significant community service obligation; or. where only a nominal charge is levied.The government has ignored every single aspect of this motion. Not one part of this request, made by 700 local government representatives from around the country, has been met by this government. If you wanted to go out and deliberately antagonise local government, you actually could not have done a better job. We have to ask ourselves: what is the agenda behind all of this? It could mean the end of local government in many areas, particularly in regional and rural Australia. And, as we move around councils in these areas, that is precisely what they are telling us.The coalition has taken a very narrow view of local government, relegating it to be `a creature of the states'—a phrase that was used many times in the House of Representatives by coalition speakers. The coalition has ignored the importance of our third sphere of government. The Labor Party, on the other hand, has always regarded local government as a partner and as a fundamental contributor to the wellbeing of the community. The end of the 25-year partnership between the Commonwealth and local government that the coalition seeks is a sad indictment of the coalition's understanding—or lack thereof—of the importance of local councils not just to their own communities but to the country as a whole.Local government is fundamental on a number of levels, and let us look at what they are. Australia's 710 local councils collectively spend $12 billion, or around 2.4 per cent of GDP, annually and employ 142,000 people. Local government accounts for five per cent of total government outlays and nearly four per cent of total national taxation receipts. Local government touches the lives of all Australians and provides vital infrastructure, including local roads, rubbish collection, recycling, footpaths and, in some states, sewerage and water. Local councils also deliver an enormous range of community services for families, the elderly and people with disabilities.The range of services and facilities provided by local government is either not understood or conveniently ignored by the coalition. In its submission to the tax committee, the ALGA listed the broad categories of local government activity that are provided in one or more states. They are, inter alia, road maintenance and building, provision of water and removal of sewage waste, domestic water disposal and recycling, environmental health, child care and aged care, provision of housing and public transport and so on—an extraordinary diversity of service provision.Most local government community activities and facilities are provided on a not-for-profit basis and are subsidised up to 90 per cent by local government rates base. Local government provides such services and activities to meet a community need that is not being met by other governments or by the private sector. To claim, as the coalition has done, that many of these activities are commercial is ludicrous. Councils will be under pressure not to pass a GST on for many of these services—for example, meals for seniors. They may have to subsidise the service themselves up to 100 per cent or scale it down, which many of them are considering. A GST is not fair for coun cils and the communities they represent. Labor understands this and we will oppose the GST.During the election, the coalition promised in a letter from Lynton Crosby on behalf of the Prime Minister, John Howard, that non-commercial activities of local government for which a small fee is charged would be GST free. This has subsequently been revealed to be incorrect by the local government minister, Senator Ian Macdonald, in answer to a question from me at estimates—much to the horror of local governments across the country.Local government is not a trifling concern and the Commonwealth should not treat it as such. The Labor Party has long recognised the importance of local government as the third sphere of government. We recognise the vital role of local government, not only in community life but in local economic development. It is a vital stepping stone in national economic development, and the role of local government in achieving that goal is absolutely fundamental. Labor's long-held commitment to local government was why the Whitlam government introduced Commonwealth financial assistance for local government in 1974. The Labor Party has maintained its support for a direct relationship between the Commonwealth and local government since then and supports the continuation of that relationship now. Direct Commonwealth funding is a way of recognising the role of councils in our community and of building their capacity to provide the services, facilities and infrastructure that every community needs.The Australian community benefits from competent local government participating as a partner with the Commonwealth and the states. However, this government has entered into an agreement with the states that, whilst purporting to protect local government funding, actually contains a clause that will enable the states to dud local councils and their communities. Around two-thirds of the grants currently go to rural and regional councils, with over half to rural councils specifically.Many councils in rural Australia rely heavily on Commonwealth grants to provide essential services to their communities. Many of those councils have a very narrow rates base because of the small population, and a community that cannot afford rates increases. These councils rely on Commonwealth grants for up to 50 per cent of their income. In fact, it is more in some states—particularly in Far North Queensland, where I understand it gets up to 70 per cent of their income. Any threat to funding for these councils is a threat to their very existence and the communities that they serve. It is farcical for the government to claim a commitment to struggling regional communities while stepping away from providing funding assistance to local government.What this government proposes is not acceptable. The abandonment of a Commonwealth-local government partnership is not acceptable. The ALP is committed to a direct funding relationship between the Commonwealth and local government. The existing system works well and ensures that national standards in service provision are possible. I will later move a second reading amendment condemning the government for attempting to break this critical nexus.The coalition has comprehensively dudded local government and local government know it. The Labor Party will not stand by and watch 25 years of history destroyed. The GST and tax package are not just going to hit local government hard—they will have a particularly deleterious effect on regional communities. I will touch briefly on some of those issues here, but I intend to address them more fully in the committee stage of the bills.Before I move away from local government, I should highlight the particular impact the GST will have on councils in regional areas and the consequential impact on those communities. The ALGA stated in its submission to the Senate select committee that:There is a real resistance in a lot of country areas that are really doing it hard—those that have been depopulated; they are just keeping their community together and there is a real resistance about passing on any increases in charges caused by a GST, and resistance is expected from the community. So a lot of them would be looking at the possibility of reducing services so that the charge remains the same, and others would be looking at more subsidy through rates. But there is a real limit to that, because the same community that would be paying through the increased charges would also be paying the rates.Precisely. Councils in regional Australia have an enormous impact on the quality of life for communities. I think that is something we can all agree on. And it is those very councils and the services they provide that are most under threat from the government's tax package.People in rural and remote communities are on average lower incomes than those in urban areas. There are far less employment opportunities and, most significantly for this debate, they pay a far greater price for food and basic groceries. Evidence to the Senate select committee highlighted just how hard regional Australia will be hit by the tax package. Evidence to the committee showed that up to 120,000 jobs will be lost, with the most severe job losses being in Tasmania, Queensland and regional Australia; and the disparity between country and city petrol prices will increase. This government has already washed its hands of regional communities by abandoning a proper regional development strategy, and the tax package will only serve to exacerbate the disadvantage these communities suffer.Finally, I want to spend some time looking at the impact of the GST on Tasmania. As you know, Madam President, Tasmania has more than its fair share of economic difficulties at the moment and has had for some time. I would like to advise the Senate just how severe the impact of these proposals will be on my home state. The Tasmanian Premier and Treasurer appeared in Hobart before the Senate Select Committee on A New Tax System and put an extensive and well-argued submission to the committee. This appearance was unique. No other Premier appeared before the committee in person. The fact that Jim Bacon did appear is a measure of how seriously the Tasmanian government views this issue. It is just plain dishonest—there is no other word for it—to argue that because Jim Bacon signed the intergovernmental agreement on the reform of Commonwealth-state financial relations, the Tasmanian government is eager for the GST to be introduced. Have any senators on the other side who are making this allegation actually read the agreement? If they want a copy they can come around to my office and I will show it to them, because it does not indicate that position at all. This line has been tried in relation to Premier Bacon. I simply need to point out paragraph 3 of the agreement, which says:While a majority of the States and Territories support the introduction of the Goods and Services Tax (GST), the agreement of New South Wales, Queensland and Tasmania to the reform of the Commonwealth-state financial relations does not imply their in-principle endorsement of the GST.Premier Bacon has made very clear statements in relation to that which I am happy to provide later on. In their submission to the committee, Premier Bacon and Treasurer Crean said that the ANTS changes would involve:. . . a major redistribution of the taxation burden across industries and as a result there will be significant transition costs which will impose a much higher burden on Tasmania because of its economic and social circumstances. While other more robust economies may be able to cope with these changes, the Tasmanian economy is already vulnerable and has a limited, if any, capacity to deal with such impacts.That is what Premier Bacon and Treasurer Crean said. They said that the Tasmanian economy was vulnerable for a number of reasons. I urge senators to read the submission provided by the Tasmanian government.The Tasmanian Labor state government is moving to address many of these issues at long last. The innovation industry development strategy is being warmly welcomed by the people of Tasmania, who at last have a majority Labor government that is prepared to do business and is confident enough to get Tasmania moving. But the Tasmanian recovery strategy will take some time and nobody is resiling from that. There is no quick fix. In the meantime the GST proposals could fatally wound the Tasmanian economy.Let us look at what the state government said about the real impact of GST on Tasmania. The Econtech research says that there will be `shifts in the distribution of employment across states and differential impacts across sectors of the economy'. Using the language of economists sanitises this issue. It dehumanises the impact to the point where it seems like some sort of shift on a balance sheet printed on paper. What this shift in the distribution of employment actually means is that Tasmania is predicted to lose 1,000 jobs—1,000 jobs. Even repeating the statistic does not convey the human impact of losing 1,000 jobs in a small state like Tasmania. Potentially 1,000 families will lose a source of income, 1,000 families will be uncertain about their future. Some of those people, in fact a lot of those people in places like Tasmania, the older workers particularly, may never get jobs again. We just cannot sit back and say, `Oh, well, 1,000 jobs are going in the state of Tasmania,' without recognising what that means in terms of the human impact.Why will the ANTS proposal have this impact in Tasmania? There are very specific reasons for that, and Tasmania is not unique in relation to this. Those industries that are forecast to grow are relatively underrepresented in Tasmania—mining, property, business services, finance and insurance—while those that are relatively important to the state are not expected to achieve significant growth—agriculture, forestry and fishing, electricity, gas and government services. I do not think government services are predicted to grow in Tasmania, not after the slash and burn approach of the coalition to the state. Capital intensive industries will benefit to a greater extent from the reduction in the non-salary costs of business inputs than will service industries that have a large labour component. Service industries in Tasmania are under pressure from population decline, given their dependence on the local market for expansion.The ANTS package is expected to see an appreciation in the currency, we understand. This will work against industries producing world market tradeable commodities. In particular, this will disadvantage Tasmania's food exporters as this is a relatively labour intensive industry. The higher exchange rate will also lead to more international than domestic travel. Tasmania's tourism industry is based largely on domestic travel, not international travel. This is another blow that the state cannot afford.What I have outlined is the long-term impact on employment in Tasmania. We are talking about 0.45 per cent increase in unemployment. In the short term the impact could be even greater. One particular industry that will be enormously affected by the ANTS proposal is the boutique wine industry. The wine industry in Tasmania is growing. In fact it has grown tenfold in the last 10 years. The ANTS proposals put continued growth of this industry at risk.We cannot sustain a long-term increase of 1,000 people, human beings, on the unemployment list. The individual impact on Tasmanians will also be greater in Tasmania because of the relatively high proportion of residents reliant on Commonwealth welfare transfers and the generally lower levels of household incomes. Tasmanians will cop the brunt of this regressive tax more than any other state. The goods and services that will increase in price are those which low income earners spend a relatively higher proportion of their incomes on. This will hit Tasmania at both the systemic and individual level. To impose the ANTS proposals on Tasmania will be an extraordinarily callous act.What we face is this: a negative impact on individuals and a negative impact on the state as a whole. We cannot sustain the impact of these proposals on Tasmania. Every member of this chamber who votes for the proposals will be taking an anti-Tasmanian stance and will be attacking Tasmania's economic recovery. The Labor Party is clear on its position—the GST is unfair. That is why we oppose it. These proposals should be voted down and all senators with the interests of local government, regional Australia and Tasmania at heart should vote against them. In respect of the A New Tax System (Commonwealth-State Financial Arrangements—Consequential Provisions) Bill 1999, I move:At the end of the motion, add "but the Senate condemns the Government for seeking to end the 25 year Commonwealth-local government funding partnership because: (a) it is a regressive step that fails to recognise local government as an important sphere of government in Australia, a partner of the Commonwealth, and as a fundamental contributor to the wellbeing of the community; (b) it places the future of many councils and the vital services and facilities they provide to their communities, particularly those in rural and regional Australia, at risk; (c) it signals the abandoning of a national approach to standards for local government; and (d) it has been universally and strongly rejected by local government in Australia"20:42:003919Boswell, Sen RonaldSenator BOSWELLYE4QLDNP10—We are getting near the end of the road in this debate on the legislation for a new tax system and the goods and services tax. This package was taken to the election. It was soundly debated out there. People voted on it. No-one can say that the population were not aware of the new tax system that was offered by this government. An election was won on it. We proceeded back to parliament. Three Senate committees were set up and those committees have travelled extensively around Australia at great expense, carting around with them Hansard reporters and various senators. No-one has moved their position one iota. Now we are back to the debate. If no more speakers are added to the list, we will probably be concluding the second reading stage shortly.One just has to wonder what we have achieved when we asked the electorate to endorse the tax package. The conservative coalition had some momentum up. They had a vision for Australia. They showed quite conclusively to the acceptance of the community, the electorate, that they had momentum up, that they had a vision and that they had a plan for Australia. On the other hand, the Labor Party went to the election full of negativism, with no plan for the future and no drive. Consequently, they were rejected.Tonight we face a new tax system that I believe will make the economy work better. It is certainly going to be better for the constituents in rural and regional Australia. Not only will those people get the benefits, but Australian business enterprises will also get many benefits. The benefits will be felt right across Australia, right across the community, but it will be more beneficial, I believe, for rural Australia and small business.I have been going around Australia in the last couple of weeks on the market domination inquiry. We have heard from just about every food retailer, processor and wholesaler from the big end of town like Coles, Woolworths and Davids to the absolute other end such as the small tobacco retailers and the small family corner stores. Right across Australia the message is universal: `Please do not exempt food from the GST. You will drive us to the point where we will not be able to run our businesses.' That is not coming from one sector of the food retail outlets or the food wholesalers or the processors but from right across the whole broad band.Senator Mark Bishop interjecting—YE4Boswell, Sen RonaldSenator BOSWELL—No, they do not. No, that is quite incorrect. Food retailers want and are asking for a sales tax system that will not drive them crazy, where they have 22 per cent on this and 32 per cent on that and 10 per cent on something else and nothing on something else. They are adamant that they want this tax system up and running. I will tell you another reason why they want the tax system up and running: there is a problem with sales tax at the retail level which—EU4O'CHEESenator O'Chee—Advantages the big fellas.YE4Boswell, Sen RonaldSenator BOSWELL—It certainly advantages the big fellas to the tune of about $30,000 a year for a retailer who sells in the vicinity of $12,000 to $15,000 worth per week. The GST washes the penalty away from small business. That is another reason why the retail sector is demanding that this new tax system go ahead. But it is interesting to hear that only a couple of weeks ago Labor Premiers Carr, Beattie and Bacon came here and ticked off on the new tax system which was going to give them another $17 billion over four or five years. I do not have to tell senators on the other side how stressed health delivery services are and how stressed the hospital situation is. This money will be able to relieve that situation.So that is $17 billion to the states. They have come down here and they have ticked it off but, because they want to stay on line with party policy and because there is some sort of unity between the state Labor parties and the federal Labor Party, they put out a mealy-mouthed statement which was read by Senator Mackay saying, `Really, we'll take the money and run but we're not going to give it our blessing.' They wanted the money, and they have got the money. The states need an extra stream of revenue and the new tax system is going to benefit all states and those people who use public hospitals and schools, police and all those services that states provide which are financially stressed and at cracking point. This is one way to ensure that there is going to be a new revenue stream that will deliver services back to the states.But this new tax is also going to encourage investment in industries that contribute to the growth, employment and prosperity of Australia's rural industries, which provide export markets all over the world. I have continued to use this figure, but some 25,000 farmers are needed to feed and clothe Australia. The other 120,000 or 110,000, depending on how you count them, have to get their income from exports; and they realise that. Our exporters have invested time and capital to become world-class traders. They have gained efficiency and increased productivity. They have had great leaps forward in sectors like the sugar industry, the wine industry and the dairy industry, which exports $2 billion a year. The wine industry is also very successful. The sugar industry also exports $2 billion a year.But those industries are continually being saddled and burdened with a cascading wholesale sales tax system. That system increases production costs and takes away Australia's competitive advantage. Wholesale sales tax compounds throughout the value adding and the production phase of exports, making them dearer and less competitive. Our overseas competitors do not have that burden at all. In fact, we are handicapping ourselves with a wholesale sales tax system. We are encouraging imports by making them cheaper and we are saddling our own home-grown product with a lot of wholesale sales tax.Every $2 of revenue collected by tax comes from the wholesale sales tax on goods purchased by a business. Australian primary producers compete under a very indiscriminate, unfair tax at the moment. We have now changed all that. We have a comprehensive tax package which takes into account Australia's people and its exporters. It is now up to the Senate to give the exporters, the lifeblood of this nation, a fair tax regime that they deserve. The new tax system is going to wash out of the system $4.5 billion in savings to Australia's exporters with a fall in production and value adding costs of 3.5 per cent. That is going to make us more competitive in the market.It is a dog-eat-dog competitive market out there when you are selling sugar, wheat or wine on world markets, many of them corrupted by people devaluing their currency or by banks and governments giving monetary support to growers. We have to compete in that and we have to accept it. As I pointed out, there are 100,000 farmers out there who depend totally on exports. We have to have a tax system that makes us competitive. When you give $4.5 million worth of savings to Australian exporters, that is going a long way to solving many problems.There is going to be an additional reduction in costs for Australian firms competing with imported goods. Agricultural industries alone will have a reduced cost of $1.1 billion a year—and that makes the average farm business about $7,000 better off. I cannot understand why the Labor Party, the Democrats and the Greens want to deny rural Australia this export opportunity and also block billions of dollars worth of fuel rebates that try to make us competitive.Australia's comprehensive disadvantage is distance. We have to move our produce many, many miles—probably through the equivalent of several European countries—to market. High transport costs and diesel excise impact heavily on final margins. Under the tax system we have been debating here today, business will pay less for petrol and diesel. It will not be a one-way street with exports going down to the wharves, making our exports more competitive, but a two-way street with food and farm machinery, tyres, batteries, et cetera, and all those commodities that are required to sustain country towns in regional and rural Australia benefiting because the back loading will be at a lot cheaper rate.We are going to pay less for diesel and we are going to pay less for petrol. We will be able to claim an input tax credit on the GST payable on fuel used for business, saving around 7c a litre on what is paid by business and farmers at the moment. The excise payable on diesel used in heavy transport and rail will be reduced from around 43c a litre to 18c a litre—a huge saving. All other users of diesel, including marine business users, will qualify for a full credit of the diesel excise, taking the excise from 43c a litre to zero. Road transport costs will be down 6.7 per cent, rail costs will be down 3.8 per cent and water transport will be down 5.8 per cent.Yet where have the Greens, the Democrats and the Labor Party been for the last three months? This evidence has been produced time and time again for all the committees. But there is none so blind as those who do not want to see, and the Democrats and the Labor Party just cannot get their minds around it.I can offer a little bit of gratuitous advice to the Labor Party. My friend Senator Julian McGauran said today that we may go to an election on this. If we do, if the Prime Minister does care to take us down that course, you are going to be soundly thrashed because you have no vision and you are offering Australia nothing. All you are offering is the politics of negativity. The people rejected the politics of negativity last time, and they will reject it again at any time there is an election called. If I can offer you a bit of gratuitous advice, even if you are philosophically opposed to this: please, for your own good, take a dive. If you take a dive, you may hold enough of you together to come back to form a bit of an opposition.There are remote area power users and fuel generators. I would include in that a number of Aboriginal communities which would not have electricity but would be generating their own power by diesel generator. There are still a few of them left in the bush, but mainly they are right out in the really remote areas of the Gulf. But those Aboriginal communities and those on the islands of the Torres Strait use diesel generators to supply their power. There is going to be a rebate for those particular diesel generator users, and more users are going to qualify for that particular rebate.So many more industries are going to benefit from a reduction in the fuel excise. Just take the charter boats out of Mackay, Townsville and Cairns for the tourist industry as an example. They are going to gain from the inclusion of marine activities in the diesel excise rebates. It is going to make a huge difference to the tourism industry around the Barrier Reef, particularly between the months of March to October. Many Asian people come over and take advantage of the tourist benefits and go out and see the reef. It is going to make that particular industry much more accessible and much more profitable.Rural and regional Australia will benefit enormously from lower production costs and cheaper fuel. Sometimes I think I have fallen through the looking glass, like Alice in Wonderland, when I hear Senator Brown saying that we have to increase the diesel fuel excise on farmers. I would just love every farmer to come and sit in these galleries and listen to Senator Brown and Senator Murray, although Senator Murray, on occasions, does make sense.EU4O'CHEESenator O'Chee—Not on this issue!YE4Boswell, Sen RonaldSenator BOSWELL—On occasions, I said. I do not want to give him too many accolades, but on occasion he has been known to make a little sense, but certainly not on the GST. Senator Murray would have to accept that he has been with me on this market domination committee. We have gone right around Australia, and he has been with us most of the time. He would have to acknowledge that the whole of the food industry have pleaded with the committee on this—although we have not really let it get up to run because it is a market domination committee. They have sent out signals to the Democrats—and they know Senator Murray is a Democrat— saying, `Please do not exclude the GST on food or you will give us such a headache we will never be able to maintain our system.' But Senator Murray seems to think he knows better than them.So many communities are going to gain. Small business, the engine room of Australian employment, will receive a three per cent saving on business cost as a result of the new tax system. Nine hundred thousand small businesses employ 50 per cent or more of Australia's work force, and they will benefit from improved cash flows, lower compliance costs and the removal of a raft of taxes. The quarterly payment arrangements for the GST will deliver a cash flow benefit because everyone will sit on their cash for another three months. That will reduce their overdrafts and that will be a benefit for businesses, too. People know that, if they have a good cash flow, that will be of assistance.The maze of taxes imposed by state and federal governments on small business has been an owner-operator nightmare. Taxes to be abolished or replaced by the new tax system include the wholesale sales tax; the provisional tax; the provisional uplift tax factor; company tax instalments; stamp duty on business properties; conveyances; stamp duty on leases; stamp duties on cheques, bills of exchange and promissory notes; stamp duty on shares; the reportable payment system; stamp duties on credit arrangements, instalment purchase arrangements and rental arrangements; and stamp duty on mortgages—a whole raft of taxes will be relieved. These will all be replaced by one single tax. The tax burden on small business will be reduced by more than $10 billion each year after the financial year 2001-02, and there are many other benefits.As I said, the committees have gone out to the far-flung areas of Australia. They have come back at great expense. We have gone to the election with this package. The Democrats, the Greens and the Labor Party have heard all this evidence that I have said in my speech today, but they have not been moved. (Time expired)21:02:003922Carr, Sen KimSenator CARRAW5VICALP00—by leave—I move:In respect of A New Tax System (Personal Income Tax Cuts) Bill 1998At the end of the motion, add "but that the Senate condemns the Government for:(a) unfair tax cuts, with more than 50% of the benefits going to the top 20% of income earners;(b) tax cuts for higher income earners which far outweigh the increases in social security payments for lower income earners; and(c) creating a situation where a couple with no children earning $100,000 gets 5 times the benefit of a low single income family with three children".In respect of A New Tax System (Compensation Measures Legislation Amendment) Bill 1998At the end of the motion, add "but that the Senate condemns the Government for:(a) a so-called compensation model for aged pensioners which will erode to nothing within a few years;(b) imposing a GST on veterans and proposing a so-called compensation package which will also erode to nothing in a few years; and(c) this massive sleight of hand at the expense of our aged and veteran pensioners".In respect of A New Tax System (Bonuses for Older Australians) Bill 1998At the end of the motion, add "but that the Senate condemns:(a) the GST, which is effectively a retrospective tax on retirees, who have paid tax on their incomes and now face a new tax on their savings; and(b) the proposed savings bonus, which the Australian Investors' Association has described as `so trifling as to be laughable'".In respect of A New Tax System (Trade Practices Amendment) Bill 1999At the end of the motion, add "but that the Senate condemns the Government for:(a) misleading the Australian people about the real price effects of the GST;(b) inadequately resourcing the Australian Competition and Consumer Commission, thereby not protecting consumers from GST related profiteering; and(c) threatening the viability of small business with unprecedented powers over small business pricing polices".In respect of A New Tax System (Aged Care Compensation Measures Legislation Amendment) Bill 1998 At the end of the motion, add "but that the Senate condemns the Government for:(a) proposing to lower the living standards of Australia's pensioners; and(b) attempting to mislead pensioners into believing that they will be compensated, when, in fact, as Mr Geoff Carmody of Access Economics has stated, `it is only a matter of time before the real value of the compensation offered in the ANTS package will be eroded to zero'".In respect of A New Tax System (End of Sales Tax) Bill 1998At the end of the motion, add "but that the Senate condemns the Government for:(a) imposing a huge new paperwork burden on Australian small business through the GST, which does not exist under the wholesale sales tax;(b) increasing the number of businesses paying indirect tax to the Government from 70,000 to 1.6 million; and(c) imposing tax on the necessities of life for the first time".In respect of A New Tax System (Goods and Services Tax Imposition—Excise) Bill 1998At the end of the motion, add "but that the Senate condemns the Government for imposing a new tax on the necessities of life, namely, food, clothing, shelter, household bills and transport".In respect of A New Tax System (Goods and Services Tax Imposition—Customs) Bill 1998At the end of the motion, add "but that the Senate condemns the Government for imposing a new tax on jobs, which will:(a) lead to thousands of job losses in both Tasmania and Queensland; and(b) cause tens of thousands of job losses in regional Australia".In respect of A New Tax System (Goods and Services Tax Imposition—General) Bill 1998At the end of the motion, add "but that the Senate condemns the Government for:(a) imposing a $2.5 billion increase in the insurance premiums of Australian consumers through a `design oversight';(b) failing to rectify this blatant revenue grab; and(c) pretending that this massive hike in insurance costs is in the national interest".In respect of A New Tax System (Goods and Services Tax Administration) Bill 1998 At the end of the motion, add "but that the Senate condemns the Government:(a) for the most complex, administratively expensive and job destroying tax this country has ever seen; and(b) for a GST that forces charities and other non-profit bodies to reallocate scarce resources to filling in forms for the Prime Minister (Mr Howard) and the Treasurer (Mr Costello), when these resources could be used to alleviate the misery and suffering of the poorest and most vulnerable members of the community".I also foreshadow the following two second reading amendments:In respect of A New Tax System (Australian Business Number) Bill 1998At the end of the motion, add "but that the Senate notes evidence given by a joint employer-union submission to the Senate committees examining the legislation that the Australian Business Number will worsen an already serious tax avoidance situation in the building industry estimated to cost $1 billion per year and growing".In respect of A New Tax System (Goods and Services Tax Transition) Bill 1998At the end of the motion, add "but that the Senate condemns the Government:(a) for its failure to present to the Senate all of the GST legislation in the New Tax System package; and(b) for deliberately placing before the Senate only one half of the tax package for consideration, by ensuring that the review of business taxation and any changes to business taxation cannot be considered by the Senate at the same time as the GST".The opposition is moving these amendments to highlight a number of issues relating to the GST. Fundamentally, these amendments highlight the unfairness, the complexity, the fraudulent compensation on offer, the taxing of necessities of life for the first time and the detrimental impact the GST will have on small business. These amendments reflect some of the terrible consequences which await Australia and Australian families if the GST is passed.Essentially, what we have in this package is that the income tax cuts are unfair, the compensation package for pensioners is worthless, the low income earners will pay proportionally more of their income in GST than the rich, and the ACCC will have unprecedented powers to dictate to small business what they can and cannot charge for their goods and services, forcing many of them to close their doors. We cannot support these measures, and we therefore seek the Senate's support for the amendments I have moved and foreshadowed.Might I turn to another issue of this debate which has not received great attention in the chamber—that is, the question of the GST's impact on education. Senator Crossin has mentioned this matter, but I am not certain that too many other senators have drawn attention to it. It is my view that one of the most basic of human rights is access to education. In an advanced industrialised country like Australia, this necessarily entails access to high quality education and training at all levels, for children and adults alike.Most countries would seek to expand the level of education attained by removing the impost to participation that would deter those who are economically disadvantaged from maximising their educational attainment, but not this government. The Howard government seeks to develop our education system on the basis of further inequality. It is now clear that a GST, if applied to education, would have a severe effect on the cost faced by families and students. This point was clearly acknowledged by the Prime Minister himself in his letter to the Australian Vice-Chancellors' Committee dated 24 September 1998, in which he said:We have therefore decided that educational services will be GST-free in the terms stated in our Plan for a New Tax System.The Minister for Education, Training and Youth Affairs, Dr Kemp, further stated in the House on 7 December last year that the tax reforms:. . . will reduce the overall cost of schooling in Australia . . . and leave the average family some $40 to $50 per week better off.Through my work on the Senate committee, I can say to the Senate that I am convinced that this is not the case. The report has unequivocally demonstrated the fallacy of this proposition. The committee believes that the imposition of a goods and services tax as proposed will increase education related costs in many areas. These extra costs will hit hardest those on the lowest of incomes.The GST will savagely undermine equity in education and will reduce the quality and the breadth of education available to the most disadvantaged groups in our society. The government claims that education costs will fall under the proposed taxation system. While this may be the case in some areas, it is quite clearly demonstrably untrue in many, many others.Let us take a few examples. A family lives in a rural area and the children attend a small primary school. It is a family which the National Party and Senator Boswell, who has now left the chamber, would claim to represent, I am sure, but they clearly do not. This school does not provide instrumental tuition in music, as many larger government schools are able to offer. The family would have to seek music lessons privately. The fees for such lessons would be subject to a GST, as would the cost of the instruments, which are usually available on loan in various city schools. Suppose that this family has a low income. The tax breaks promised by the government—favouring, as they do, high income earners—would fail to compensate such a family.Let us take the example of a secondary student from a migrant family in the western suburbs of Melbourne, a student who is falling behind in her studies due, in part, to disruption of her education resulting from the various pressures on students—particularly those from migrant families. The school cannot afford to run a remedial program, so the student in this case may well have to rely on her family to provide or hire additional tuitional help. This cost will be subject to a GST.The point here is this: disadvantaged children are more likely to attend small, rural schools that are less well resourced. Thus, those schools will be more likely to rely on ancillary subject fees and other services to bring their conditions and standards of education to the level of those that would be taken for granted in wealthier, bigger schools, whether government or non-government. In these better-off schools, many of the services and extras are available as a matter of course. Families who are poorly off will be hit hard by a GST when it comes to doing the best they can for their children's education at various schools across this country.As it stands, the GST legislation means that extracurricular activities, such as school excursions and other extras that enrich and round out children's education, will be hit by cost increases. These items have been identified by a survey conducted by the Australian Scholarships Group as being those which low income families say are already the most difficult to afford. The Australian Scholarships Group is a lobby group; it is not a group associated with normal advocates for public education. This group has demonstrated that low income families, who already are hit by the various costs associated with the provision of education, will find there are additional costs. Many families will not be able to afford these extracurricular activities, and other such extras, under the GST regime. Many already disadvantaged students will miss out yet again.This is what inequity means: a tax that slugs disadvantaged families who are trying to do their best to provide the necessary educational quality that we have all come to expect should be available to all children in this country. The simple fact is that the GST will increase the cost of: books purchased by schools, parents and students; school uniforms; school camps and excursions; travel to and from school; visiting performers; school lunches; hire of musical instruments and other equipment; Internet services; goods purchased to be resold in fundraising ventures; before and after school care—and the list can be developed far beyond that. Even access to novels and books in school libraries will be affected. The yearly budget for a small school library is about $10,000. A GST on library books alone would add an additional $1,000 to this bill.In short, the GST will cost ordinary Australian parents some $300 per year in additional costs for the provision of schooling—and that is about half of the proposed compensation package. That is, half of the proposed compensation package will go on educational expenses alone. All the other areas of human activity would add to this general proposition. When these facts are taken into account, quite clearly what we have is a grossly inadequate compensation package.Moving on through the education system, I draw attention to the impact of a GST on tertiary students, particularly those in TAFEs and at universities. Due to the gross inadequacy of student financial support available under this government—which is an issue of great concern to a number of senators in this place—many students are obliged to support themselves during their studies by working part time in low paid jobs. They are required to subsist on extremely low incomes.It is quite clear that, under the government's GST plan, low income earners will not receive the compensation through the tax system that is available to higher income earners. Yet these young people, many of whom live away from the family home in order to study, will face steep increases in the costs of the daily necessities of life such as food, transport, housing and so on. On top of that, they will have to pay more for textbooks, stationery, equipment and course materials. No compensation will be available for the parents of any young person aged between 17 and 24 years of age, despite the fact that many young people are students and are partly or wholly dependent on their parents.The situation is likely to be equally bleak with regard to the GST's effects on people undertaking vocational education and training. As spelled out in the Senate report, the government's determination to tax short-term occupational courses will have a direct impact on the cost and accessibility of those courses. Courses designed to maintain skills and qualifications will not be exempt from the GST; only those courses which lead to a qualification for the purpose of entering a profession will be GST exempt.It is clear that the government is hoping to confuse these matters by concentrating on very narrow definitional questions about the nature of vocational courses, just as it does with descriptions of various stream 1000 courses, as they are currently known. The government seeks to confuse the fact that there will be hundreds of thousands of Australians adversely affected by such proposals. We will see great difficulties in the defining of what exactly is a `vocational educational program', aided by the various complexities associated with course accreditation throughout this country.Accreditation of courses crosses stateCommonwealth jurisdictions and often involves a complex and protracted process which in many cases can take years to finalise. It is little wonder that widespread concerns have been expressed within the educational community and that the government has been unable to satisfy those concerns—concerns about the huge impact the GST will have on the thousands of Australians who are studying short occupational courses and skills upgrades in the vocational education training area.This impact of a GST flows across the TAFE divide to adult and community education. We have seen a similar series of problems emerging there. Over half a million people undertaking adult and community education will be hit by the GST; 500,000 Australians will be caught in the tax net as a result of the government's decision to apply a GST to so-called non-accredited courses. Given the complexity of the issues surrounding adult and community educational courses, it is quite clear that the government is making its decisions on administrative and not educational grounds. In my judgment, this process will result in declining participation rates in adult and community education courses, and it will be a severe blow to those people seeking a second chance at education through vocational education and training.Once again, it is these measures which seek to hit hardest at the 70 per cent of students in the adult community education sector who come from what might be described as disadvantaged groups. This is particularly the case for older Australians and more often the case for Australians on lower incomes. Courses studied are often not simply hobby courses, as the government seeks to denigrate these programs. These courses enable people to gain confidence in their ability to do much more structured training. They are a precursor to re-entering the work force and providing second chance education on a more structured basis. Older Australians place great value on these courses which provide opportunities to re-engage with the community, particularly for those people who have been disconnected as a result of retrenchment or retirement or for those who, by some other means, have been excluded from participation in society. Additional costs may be prohibitive in this regard.I turn to the question of Commonwealth-state relations. The government places great emphasis on what it regards as the key feature of its tax program: the so-called delicate balance between Commonwealth-state relations as far as educational funding of programs is concerned. There can be no more critical issue in the education debate in this country than the issue of the level of funding and the means by which funding is delivered.The agreement recently reached with the states suggests to me that a substantial proportion of the tax revenue as proposed will be sent to states. It implies, in my judgment, a shrinkage of the Commonwealth's commitment to funding education over the longer term. This has particularly serious implications for the Commonwealth's role in regard to education, particularly its responsibilities in regard to national educational programs. I am particularly concerned about the future of specific purpose payments to the states in regard to schools and TAFE. In regard to university funding, I am concerned about the impact that the government's proposals will have for teaching and research.What is quite clear under this government's proposal is that the taxation base of the country is not being expanded. The revenue base of the country is being contracted. As a consequence, I am concerned that there will inevitably be pressure upon the Commonwealth under this scheme to reduce its expenditures. Education, being one of the critical areas of Commonwealth expenditure, will inevitably feel the brunt of the concerns which will be expressed by Treasury and the Department of Finance and Administration in the years to come.The real issue of concern is the adequacy of the tax base and the fiscal implications of the GST regime. The new tax system fails to deal adequately with the problem of a declining overall revenue base. Potentially, this tax system could shrink the level of revenue still further. The effects of such a decline on education will be very serious. There is a strong case that there may need to be a substantial increase in the levels of public support for education across all levels of government, which cannot occur under a regime which is reducing the revenue base.Finally, there is the question of compliance costs, which have been demonstrated through the Senate inquiry to be a matter of grave concern to the whole sector. Right across the country we see principals expressing the view that the administration and accounting requirements associated with compliance in this new regime will see additional administrative burdens being placed upon schools and other educational institutions. In the case of an average high school of about 1,200 students in the state of Victoria, the equivalent cost could be at least one staff's salary—somewhere between $25,000 to $35,000 per annum. There will be no additional money anywhere in this package to compensate schools and educational institutions for the additional revenue that will be spent on these administrative arrangements. There can be offsets only in educational programs as schools and other institutions seek to meet the costs that are inevitably associated with these new impositions by this government.Overall, this new tax system has enormous potential to undermine the quality of education available to Australians and the equality of access to education at all levels—be it the preschool level, the school level, the tertiary education level or in the adult and other education areas. Additional costs associated with these proposals will have to be met by educational institutions and ultimately by students and those upon whom students are dependent. There will be a diversion of expenditure from major functions which will inevitably affect teaching and learning.Families will be unable to afford many of the extra services which one has come to expect should be associated with schooling, not to mention the various materials, books and computer software. This will have a disproportionate impact on low income families, and the compensation measures that the government has outlined are quite clearly grossly inadequate to meet these new imposts. Students in tertiary education who often exist on subsistence incomes will be severely affected by the increases in daily costs as well as price rises that are associated with the cost of books and computer software.The role of the Commonwealth in terms of its policy directions and its funding will be diminished. Under these proposals, this parliament's contribution towards the education of our citizens, and in turn the impact of education on our economy and our social development, will be adversely affected. We will see a shift in the revenue share from the Commonwealth to the states. It is inherent in this tax package, and I believe it will seriously reduce the potential of the national government to play an appropriate leadership role at a national level.The GST seriously undermines any commitment to the maintenance and the improvement of educational quality and equity in Australia. It should be rejected by this parliament. It ought to be rejected by all persons who are genuinely concerned about the education of this country. It ought to be understood to have a dramatically adverse effect upon the ability of all Australians to participate fully in and enjoy the fruits of a high quality educational system.21:22:003928Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—As I was just explaining to the Manager of Government Business, I seek leave to continue my remarks on this matter which were adjourned just prior to the luncheon suspension today.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Bartlett)—Is leave granted?EU4O'CHEESenator O'Chee—I think Senator Forshaw is not seeking leave to continue his remarks but rather seeking leave to continue a speech which was in continuation at the luncheon suspension. If that is what he is asking, we agree. Leave granted.656Forshaw, Sen MichaelSenator FORSHAW—I am indebted to Senator O'Chee for that slight correction. My remarks are my speech. In any event, whichever way you wish to look at it, I am sure they will be very convincing in terms of the issues that are currently before the Senate. Prior to the luncheon suspension today when I had just commenced my speech on the GST legislation, I had pointed out that there had been two occasions on which the people of Australia had had a chance to vote specifically on a GST. The first was in 1993. I referred to the fact that in that election when a proposition was put by the then opposition for a GST—the well-known Fightback package—the Australian people overwhelmingly rejected it and returned the then Labor government with an increased majority. But, most importantly, a majority of the two-party preferred vote of the Australian people rejected the GST. The second occasion when there has been a specific focus on a GST was in the federal election of October last year. Whilst it is true that the coalition parties won government by achieving a majority of seats in the House of Representatives, nevertheless they did not achieve a majority of the popular vote. The results in the 1998 federal election were that the Australian Labor Party achieved 51 per cent of the two-party preferred vote in the House of Representatives and just failed to win a majority of seats. The coalition in the House of Representatives achieved 49 per cent of the two-party preferred vote. Those figures are not all that much different from the result in 1993. The major difference between the 1998 and 1993 elections was that in 1998 the people returned the coalition government through a majority of seats in the House of Representatives but not with a majority of the votes. When you look at the Senate results, that position is even further reinforced when you note that the combined vote of the Australian Labor Party, the Greens, the Democrats and One Nation—each of whom opposed the government's tax package, the GST, in one form or another—was 57.47 per cent of the national vote. An overwhelming majority of votes cast in the Senate were against the coalition; an overwhelming majority of votes cast by the Australian people across the nation were against the party that had as its hallmark a GST. Whilst I have no difficulty whatsoever in accepting that the party or the parties that obtain a majority of the seats in the House of Representatives shall form the government of the country, you cannot argue that that simple fact alone means that this coalition government has a mandate to implement its GST, its tax package. The reason why it does not have that mandate is that on every other test—on the majority of votes and on the results in the Senate—the people clearly did not support that fundamental proposition put forward by the coalition. What is even more important is that the result of that 1998 election—taken together with the only other occasion on which the people of Australia have had an opportunity to vote in a general election on a specific taxation proposal such as the GST—gave a mandate to the Senate to review that proposition, to test it against principles of fairness, of equity and of good government, and also to test that proposal against the other commitments that were given by the coalition in that campaign.We all remember that the major commitment given by the now Prime Minister, John Howard, when he was the Leader of the Opposition in 1996 and reiterated in terms of support for his GST package in 1998 was that under his policies, under his tax package, no Australian would be worse off—everybody would benefit. That is the commitment that you need to test the tax package and this legislation against. When you apply that test, as has been done by the Senate committees that have had the opportunity to look at this legislation, you find that this government and this proposal fails that test.Despite the posturings and the distortions put forward by members of the government, on the evidence that has been presented to the Senate committees you cannot conclude other than that this tax package as it stands, as put forward by this government in this legislation, does not result in all Australians being better off as claimed by the government. Further, it does not result in all Australians maintaining the position they have under the existing taxation arrangements. Evidence presented to the committees, evidence that has not been refuted in any serious way despite the questioning of ministers this week in the Senate, demonstrates that many people in our community will be worse off as a result of this package. It is estimated that some two million Australians could well be worse off under the package as it currently stands.One of the interesting features of this debate about the GST is the question of the appropriate level of compensation for various groups within the community who will suffer as a result of a GST. That is particularly relevant when one addresses the application of a GST upon food and essential services. What I find rather strange about this whole proposal is that this government continues to put forward the proposition that it has developed a compensation package that will address the concerns of those who will suffer if the GST is introduced. It appears that all of the discussion that is going on at the moment between the government and other members of the Senate representing the Independents or other minor parties is to do with this question of compensation: is four per cent a sufficient amount of compensation for pensioners to ensure that application of a GST on the basic necessities of life will not erode the purchasing power of their pension? You have to ask yourself the fundamental question: if this tax system that the Prime Minister trumpets as being a reform is the tax system to take us into the new millennium, if this is the tax system that the Treasurer says Australia needs, why does it have to be underpinned so substantially by compensation?What sort of a tax system are we going to have in this country in the future if, in order to implement it, you have to base its operation so substantially upon the existence of compensation? It is simply illogical to talk about a reform of the tax system, a new tax system, and at the same time say, `We also have to have substantial compensation.' That in itself should send a message to all Australians that there is something inherently wrong with this tax system that is proposed by the government. And there are many problems associated with this tax system. I will mention a few in the remaining minutes that I have. Many of them have been dealt with in contributions from other senators, particularly from the opposition.The proposed income tax cuts that are supposed to compensate for the introduction of a GST are the most inequitable tax cuts ever introduced in the history of this parliament. This is a system which proposes that 80 per cent of the value of income tax cuts amounting to some $13 billion should go to the top 20 per cent of income earners in this country. It means that a couple with no dependent children and with a combined income of $150,000 per year or more will receive a tax cut of $171.54 per week—a tax cut equivalent to 16.6 per cent of the income of that family. Yet if you look at an average family—and there has been a debate about what an average family is in the context of this debate—with two dependent children and one income earner bringing in $40,000 per year, under the government's tax scales as produced in its documentation that family gets a tax cut per week of $27.27—12.5 per cent. And you call that fair? No wonder you have to have compensation when you have a system that delivers tax cuts of such magnitude to the wealthy, the high income earners, and of such paltry amounts to low income earners and those on fixed incomes.I will take up further the issue of compensation. The government acknowledges that it has to have compensation for this tax package. Why? Because the GST is applied to the necessities of life. It is the low income workers and those on fixed incomes such as pensions and welfare payments who spend, as we know, the greater percentage, if not all, of their income on the necessities of life. They spend it on bread, milk, tea, coffee, meat, fruit and vegetables to stay alive. They spend it on trains and buses to get themselves to work. They spend it on over-the-counter medicines at the chemist to keep themselves healthy or to treat sickness. They spend it on simple little items such as books, pens and pencils at Woolworths or Coles for their kids at school. They spend it on rates and charges for their local government services. Nearly all of these items in one way or another will either be subject to a GST of 10 per cent—and increasing in the future—or, alternatively, they will become part of a system where, at the end of the day, those people will pay in one way or another. It is a complicated system of rebates and exemptions.Many of those items are currently not subject to wholesale sales tax. It is an absolute lie for this government to put the view forward that the low income earners, the pensioners and others will benefit from the removal of the wholesale sales tax when it knows that there is no wholesale sales tax applied to most of the goods and services that those people spend their weekly incomes on—as I said, on the staple necessities of life like milk, bread, tea, coffee, meat, fruit and vegetables. That is what we are talking about. I will conclude on this note: there has been a lot of passion in this debate both in the committees and indeed in this chamber. (Time expired)21:39:003930Murray, Sen AndrewSenator MURRAY3M6WAAD00—Mr Acting Deputy President, you would be aware that I have 40 minutes allocated to me, and we are due to close off at 9.50 p.m. The government has requested that I seek leave to continue my remarks a little early so that it has time to make an announcement and deal with some business. I will do that right now. I seek leave to continue my remarks as from 12 minutes to 10. I think that will leave the government sufficient time.Leave granted.3M6Murray, Sen AndrewSenator MURRAY—With regard to the 27 bills before us—and I am sure there are many more to come—the government has two main and separate objectives, and they are separate objectives. The first is to get its tax package through, but the second main objective is to diminish and attack the Senate. The government intends to do that by attacking its process, its members and the Senate committees and their reports.Out there in the scheming world where these sorts of plots are hatched, we know that a few—not many, but a few—bullyboys in business, the usual suspects, are building up their war chest for an assault on the Senate as well, and they will add a great deal of money to the campaign to try to propagandise against the Senate. Yet the Senate, as a proportional representation body, truly does represent the people of Australia. As Senator Forshaw made clear in his remarks, only 37 per cent of the vote in the Senate went to the coalition in the last election—their worst result in the last 60 years. I would not just venture to suggest, I would state as a fact, that that low percentage was entirely a result of the GST and the ANTS tax package.Because of that, this package must be rejected by the Senate unless fiercely amended because, without its acceptance by sufficient senators other than the coalition, it will lack the legitimacy of popular support which any major change should enjoy. If the last election, which the Prime Minister insists had as its centrepiece—and I think he is right—the GST and the new tax system package, had been a referendum or even just a plebiscite, the government would have failed to get a majority of Australians to support it. You can twist and turn about who has mandates, which mandates they are and where the mandates exist, but you cannot get away from the fact that a majority of Australians did not vote for the coalition's tax package as they put it. Therefore, the Senate must either reject it or savagely amend it to make it more acceptable to the community as a whole.I think the community as a whole need to be very alert to the way in which a number of people within the political process are seeking to use this process to reduce the power, the impact and the personality of the Senate. This is the same agenda which seeks to advance the power of the Prime Minister in the presidential republican debate. This is the same agenda which reduces the tenure of the clerks of both houses. This is the same agenda which reduces the independence of the senior bureaucrats who run our civil service. This is the same agenda that seeks to appoint capital `C' conservative judges to the High Court. It is a desire for excessive executive power. In the exercise of its role in legislation, this Senate must resist the efforts of a number of senators, particularly in the Liberal Party, to demean and diminish the Senate, the senators and its process.With those remarks I want to draw attention to some of the remarks made by Senator Ferguson yesterday. I have known Senator Ferguson since I came into the Senate, and I have found him to be an exceptionally capable, cooperative and very accommodating senator on the Senate economics committees and other committees where I have interacted with him. But from the moment he entered the Senate Select Committee on A New Tax System he seemed to undergo a personality change, and I think he exhibited far more aggression than is normal for the man as I know him. Either that is the strain of the responsibility of defending an indefensible package or, alternatively, he was under orders to be far more disruptive than is his nature.When he made remarks about the behaviour of senators in the Labor Party I was distressed, not because some of those remarks might not be true—because there are senators who go over the top, as we might say—but because it was a one-eyed approach. We all know that within his own coalition there are senators who go over the top. Any remarks about the fierce nature of politics and the way in which people conduct themselves in committees have to be remarks about behaviour as a whole and not directed at one particular political party. But there was one thing he said with which I do want to agree. There were remarks made yesterday by Senator Conroy implying bias by the Senate committee secretariat. I will say clearly that I have worked with Robert Diamond on the IR report and numerous other reports since mid-1996, and he is not a person who exhibits bias in the conduct of his duties. Madam President, I think I have got to stop here.10000PRESIDENTThe PRESIDENT—You could seek leave to continue your remarks, Senator.3M6Murray, Sen AndrewSenator MURRAY—I already did before you arrived. I think the government needs this time just to wrap up a few details.10000PRESIDENTThe PRESIDENT—Thank you, Senator.Debate adjourned.Notices3932393221:47:003932Tambling, Sen GrantSenator TAMBLING6E4NTCLP10—I seek leave to give three notices of motion: two relating to the exemption of bills from the cut-off and one relating to the consideration of business from 6.50 p.m. to 7.20 p.m. tomorrow, the full terms of which I now hand to the Clerk.Leave granted.6E4Tambling, Sen GrantSenator TAMBLING—I give notice that, on the next day of sitting, I shall move:That the provisions of paragraphs (5) to (7) of standing order 111 not apply to the Migration Legislation Amendment (Temporary Safe Haven Visas) Bill 1999, allowing it to be considered during this period of sittings.That the provisions of paragraphs (5) to (7) of standing order 111 not apply to the Further 1998 Budget Measures Legislation Amendment (Social Security) Bill 1999, allowing it to be considered during this period of sittings.That consideration of business on Wednesday, 21 April 1999, continue from 6.50 p.m. till 7.20 p.m.I also table statements of reasons justifying the need for the bills to be considered during this sitting and seek leave to have the statements incorporated in Hansard .Leave granted.The statements read as follows—STATEMENT OF REASONS FOR INTRODUCTION AND PASSAGE IN THE 1999 WINTER SITTINGS MIGRATION LEGISLATION AMENDMENT (TEMPORARY SAFE HAVEN VISAS) BILL 1999Purpose of proposed BillThe proposed Bill will make amendments to the Migration Act 1958 in relation to temporary safe haven visas. The amendments will:. provide the legislative framework for the Australian Government to provide persons with temporary safe haven in Australia;. ensure that persons to whom temporary safe haven is provided are unable to change their status to remain in Australia after temporary safe haven is no longer necessary; and. provide temporary safe haven for 4,000 persons displaced from their homes in Kosovo, consistent with the Government's commitment on 6 April 1999. Any applications made from that date will be rendered invalid.The Bill also contains specific powers to enable prompt action to be taken to withdraw temporary safe haven to persons who represent a danger to the Australian community, or Australia's security or whose presence in Australia would be harmful to Australia's international relations.Reasons for urgency Introduction and passage in the same Sittings is required to enable the Government to implement the short term humanitarian measures required for Australia to accept 4,000 displaced Kosovar Albanians.Effect if Bill is not dealt with in one SittingsDelay in implementation will frustrate Australia's efforts to assist in alleviating suffering and human tragedy in Kosovo.STATEMENT OF REASONS FOR INTRODUCTION AND PASSAGE IN THE 1999 AUTUMN SITTINGSFURTHER 1998 BUDGET MEASURES LEGISLATION AMENDMENT (SOCIAL SECURITY) BILL 1999PurposeThe Further 1998 Budget Measures Legislation Amendment (Social Security) Bill 1999 will deal with a number of 1998 Budget measures and some non-Budget measures relating to international social security agreements.Reason for urgencyThe commencement dates for the measures vary. However, there are some measures that are scheduled to commence on 1 July 1999. In order to meet the implementation time frames, including final development of supporting systems and administration, it will be necessary to have the amending legislation in place before the end of the 1999 Autumn Sittings.Adjournment393210000PRESIDENTThe PRESIDENT—Order! It being nearly 9.50 p.m., I propose the question:That the Senate do now adjourn.393221:48:003932Lightfoot, Sen PhillipSenator LIGHTFOOTWP6WALP10—During the summer break, I chose to go the island of Borneo to look at the war graves in those areas that have, for over 50 years, been synonymous with the most brave of actions of young Australian warriors during the Pacific war, the 1939-45 war. I travelled to what is called Kota Kinabalu, which was, during those years that young Australians served on that island, named Jesselton. The area is today called Sabah, but during the time of the British Empire, of which Australia was a part, it was called British North Borneo.I drove some 300 kilometres through the mountains of Borneo to Sandakan and went to the camp from which over 1,000 young Australians marched, on two separate occasions, high into the mountains of Borneo—in January 1945 and again in May 1945. In the first march, 455 young Australians, mostly in their twenties, were force marched by the Japanese to Ranau, which lies adjacent to Mount Kinabalu, the highest mountain peak in Borneo. Later, 530 young Australians were force marched. Altogether, of about 2,700 young Australians who were imprisoned in the Sandakan prison camp, only six young Australians survived. That is in itself a tragedy when any of them, with even a modicum of humane treatment, could have returned to their mothers, their fathers, their families and their loved ones.In five days time, Australia will be asked to remember those sacrifices that young men and some young women made; we call it Anzac Day. It is, in my mind, without exception the greatest day in Australia's history. There is no day that comes closer to exemplifying this hard-won island nation than Anzac Day, to be held in five days time. I was fortunate enough to be much too young to serve in the Second World War and then—by, I guess, some grace of God—too old to serve in the Vietnam War, but I was called up for national service. I served in the Australian Army somewhat grudgingly at the time, but in retrospect it was a privilege to serve my country as a national serviceman.It was not until I left national service in the fifties that I realised how much Australians of the age that I was had given in order that I could enjoy one of the best and most enviable lives that anyone in the world could possibly have. And to those young men and young women who gave their lives in all our wars and conflicts so that I could enjoy freedom, I say, with as much truth as I can muster: thank you so much. On behalf of all Australians who hold history and our country dear, may I presume to say to those people who sacrificed their lives: thank you also.I was privileged to read a document that was put out by this government 54 years after the Second World War. There are many poignant parts to it. Having been to Sandakan and having inspected the camp from which these young Australians were forcibly marched to be shot or to die in the jungle or to be otherwise executed, it brought back memories today of that rather sparse camp on the edges of the jungle of Borneo in which stands in mute testimony to those who served so well and sacrificed so much, a steam shovel that is still left there that was damaged by the Australians who were asked by the Japanese to build a war strip—they damaged the shovel to the degree that it could not be used—and a rather archaic generator, the shell of which still remains, that lit the camp, no doubt not for the Australians who were imprisoned there but for the Japanese and for the officers mess. These are rather tragic reminders of an age 50 or 60 years ago. When I look around and see the affluence and the comfort we live in today, I feel rather ashamed of myself. I want to read from the book, called Laden, fevered, starved: the POWs of Sandakan North Borneo, 1945. On page 47 it states:The 183 survivors of the second march—that is, the march in May—142 Australians and 41 British—began arriving at Ranau—that is, the place in the mountains of Borneo—on 26 June 1945. They found only six men from the first march—that is, of the 455 who left—still alive. Over the next few weeks, despite their exhaustion, sickness and malnutrition, they were subjected to a harsh and brutal work regime. Parties cut bamboo, collected wood for burning, atap for hut construction, and carried 20-kilogram bags of food to Ranau from a dump three kilometres away. This was light work compared to that of those unfortunates who were assigned to haul an average of 130 buckets of water a day up a steep slope for the Japanese officers' quarters. As private Keith Botterill later testified, rations for the POWs at this time were barely sufficient for survival, let alone for sick men . . .Keith Botterill said:They were given a small cup of rice water a day with about an inch of rice in the bottom. Plenty of rice was available and the Japanese used to get a 800 grams a day themselves; they also used to get tapioca, meat, eggs and sweet potatoes and showed no signs of malnutrition.The book continues:No accommodation was available for those from the second group and initially they were herded together in an area 50 metres square. There was no place for cooking or basic sanitation, and living quarters were simply the protection of the scrub. Between 30 June and 18 July, as well as working for the Japanese, the POWs built themselves a hut. A measure of their physical condition by this time was the fact that when the hut was finished only 38 were fit enough to occupy its elevated floor space. The remainder were so sick and debilitated by dysentery and other illness that they could only crawl under the hut for shelter.Keith Botterill estimated that in early July men died at the rate of about 7 every day. Moreover, the beatings and the bashings continued. One POW who perished as a result of a severe bashing was Sapper `Dickie' Bird, a survivor of the first death march. By 7 July Bird was emaciated with beriberi, malaria and leg ulcers but, despite his condition, a Japanese guard dragged him out for work. When he tried to explain his incapacity Bird was knocked to the ground and continually kicked for over ten minutes. Later that evening he was observed lying virtually where he had fallen and an effort was made to get him back to the hut. Bird was in great agony and he lapsed into a coma. Nothing could be done for him and he died two days later. An Australian doctor, Captain J B Oakeshott, was so appalled by the manner of Sapper Bird's death that he purportedly declared: If anybody is fortunate enough to escape this camp or live it out, this incident with others should be brought to the notice of the authorities and see that justice is brought about.We do owe a lot. It is a sacred day for Australians. To all of those 61,000 young men who died and did not come home from Europe in that event of 1914, to those 45,000 who perished in the Second World War, to those who perised in all of our wars, may I conclude by saying: I hope you rest well. Lest we forget.393421:58:003934Reynolds, Sen MargaretSenator REYNOLDSXI4QLDALP00—This evening I want to draw attention to the fact that 30 April is the deadline for comment on the Constitutional Alteration (Preamble) Bill 1999 exposure draft. There has, of course, been extensive debate about the preamble that has been presented by the Prime Minister. Many people have penned their own preambles. It has created a great deal of debate, which is a good thing. It has created some controversy, which is, I believe, also a good thing, because it gets people thinking about the issues of what it means to be Australian and why we in Australia want to change the way in which we are governed in terms of recognition of an Australian head of state.I do not want to spent a lot of time on the controversial aspects because, obviously, there are a number of features of the Prime Minister's draft that I cannot agree with. But my three major criticisms are as follows. The first is that I think it is too wordy. With every respect to Les Murray, there are too many words. This is the kind of statement that people should be able to remember, and in the current form it is far too difficult for people to remember the actual flow of the sentences. In fact, unfortunately, they do not flow. The two more substantive issues relate to its failure to recognise indigenous prior occupation and custodianship of the land. Many, many people have commented that this is non-negotiable, and I believe that the Prime Minister would be well advised to think again about recognising prior occupation and, particularly, custodianship.There is another key area that I believe is really a grave oversight on the part of the Prime Minister—and Les Murray has to accept some of the responsibility. That is that the preamble, as presently drafted, fails to recognise 52 per cent of the population. It does not mention women. Now there will be those who say, `Why should it?' I believe that, for a number of reasons, I can persuade you that it should. For example, there is Jocelyn Newman's comment on Monday in a letter to the editor of the Australian. Under the banner headline `A fair go for women,' she wrote:I welcome healthy debate about women's policy and the need to give voice to a wide diversity of experience and aspirations.Well, how can you have a preamble if it does not give voice to the wide diversity of experience and aspirations of 52 per cent of the population?Furthermore, it should be remembered that on two occasions that I know of the Prime Minister, to his credit, did commit himself to the inclusion in the preamble of equality of men and women before the law. The first occasion was on 14 February on the Ten network's Meet the Press in answer to a question from Michelle Grattan. He did it again on 16 February at a coalition party room meeting—again, reported in the Australian and the Canberra Times on 17 February. Obviously, it has been in the Prime Minister's mind to recognise the equality of women and men in the preamble, but apparently it has either slipped his mind—I will be generous—or he has failed to keep that promise. Not only did he fail to keep that promise, he gave us `mateship' instead. That word is very blokey and in no way acceptable to many women and, indeed, men as being a substitute for recognising equality between men and women.I will quote Marian Sawer, who has done a great deal of work on this subject and on the Constitutional Convention, as have a number of other women:It is difficult to discover why the Preamble Working Party at the Constitutional Convention regarded the equality of men and women as `controversial' . . .Here we are in 1999 and certain people—be it the Prime Minister or Malcolm Turnbull—still seem to think that to recognise the facts of life is somehow controversial. This principle has been included in all recent government statements of the core values of Australians. For example, changes to the Australian Citizenship Act were introduced in this way:Australia is a parliamentary democracy committed to providing equality before the law, freedom of the individual, freedom of speech and religion, equality between men and women and equality of opportunity for all. This is in the Senate Hansard of 6 May 1993. So any comment that it is too controversial and perhaps best left alone is really very out of step with the reality of the roles of men and women in Australian society today.I am told by Marian Sawer, who has researched this area extensively, that all democracies which have revised their constitutions since World War II have formally recognised that men and women are equal. Australia's former trust territory, Papua New Guinea, has recognised men and women in its preamble. Finland has addressed equal pay in its constitution, which says:Equality of the sexes shall be promoted in social activities and in working life, particularly in the determination of remuneration.Malta's constitution says:The State shall promote the equal right of men and women to enjoy all economic, social, cultural, civil and political rights.And, of course, the recognition of the equality of men and women is already an obligation on Australia under the Convention on Civil and Political Rights.I would very much hope that women and forward-looking men—and I am sure both of the senators sitting on the government benches at the moment are such gentlemen—will be able in the party room to persuade the Prime Minister that he has to take out of the preamble this football field nonsense about being all good mates together and include a statement that reflects the reality in Australia and the commitment that we should have to our obligation under the relevant convention.In conclusion, I have to confess that I have not drafted a preamble for consideration by the Prime Minister. I am sure that he would accept one from me, but I do not know how successful I would be in persuading him. Instead, I would like to conclude by reading Marian Sawer's preamble because I think it does overcome many of the issues that I have raised tonight. It is simple. It is easy to remember. It includes recognition of indigenous custodianship of the land. It states:We the people of Australia affirm our Constitution as the foundation of our democracy. We dedicate ourselves to a responsible and representative system of government that upholds fundamental rights and freedoms and the rule of law.We respect and cherish our ancient land and recognise indigenous Australians as its original occupants and custodians. We seek an Australia that is proud of its diversity, promotes the equality of men and women and provides justice and equity for all.I commend the sentiments of that preamble to the Senate and indeed to the Prime Minister when he is considering the final draft of the preamble.22:08:003936Senate adjourned at 10.08 p.m.Documents39363936The following government document was tabled:Industry Commission—Report—No. 60—A full repairing lease: Inquiry into ecologically sustainable land management, 27 January 1998.The following documents were tabled by the Clerk:Family Law Act—Rules of Court—Statutory Rules 1999 No. 61.Fishing Levy Act and Fisheries Management Act—Regulations—Statutory Rules 1999 No. 59.Migration Act—Regulations—Statutory Rules 1999 No. 58.Therapeutic Goods Act—Regulations—Statutory Rules 1999 No. 62.Trans-Tasman Mutual Recognition Act—Regulations—Statutory Rules 1999 No. 60.3936The following document was tabled pursuant to the order of the Senate of 30 May 1996, as amended 3 December 1998:Indexed lists of departmental and agency files for the period 1 July to 30 December 1998—Statements of compliance—Department of Health and Aged Care.Answers to Questions on Notice3937The following answers to questions were circulated:3937(Question No. 188)1883937O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 24 November 1998:(1) In conducting his investigation of the forced closure of Kingsford Smith Airport in July 1998 did Mr Peter Beaver attempt to access a tape of a phone call from a sick staff member.(2) Were Mr Beaver's actions in contravention of an Airservices Australia/Union agreement on the use of such tapes.(3) Has the Minister inquired as to whether Mr Beaver's action would have been in breach of the Telecommunications (Interception) Act; if not, will such an inquiry be undertaken.(5) Did Mr Beaver: (a) attempt to access Airservices staff members e-mail accounts in the course of his inquiry; and (b) seek authority to access these accounts; if so, was authority granted.(6) Who gave Mr Beaver authority to access these accounts.(7) Can a copy of Mr Beaver's report be provided; if not, why not.3937Macdonald, Sen IanSenator Ian MacdonaldYW4QLDLPRegional Services, Territories and Local Government10—The Minister for Transport and Regional Services has provided the following answer to the honourable senator's question:Airservices Australia has advised that:(1) Yes.(2) The tapes accessed by Mr Beaver are recorded for operational security reasons and are not covered by any Airservices/Union agreement.(3) Airservices Australia is satisfied that Mr Beaver's action did not breach the Telecommunications (Interception) Act.(5) (a) Yes (b) Mr Beaver was given approval to access all appropriate electronic and paper records in accordance with the normal arrangements that cover such inquiries. (6) Approval was granted by the then General Manager, Air Traffic Services in accordance with the arrangements for the inquiry.(7) Airservices would be happy to release the report to Senator O'Brien subject to satisfactorily covering off privacy considerations relating to certain staffing information contained in the report.3937(Question No. 191)1913937O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 24 November 1998:(1) Has Airservices Australia concluded all audits of air traffic control radar and flight information computer systems with regard to the `millennium bug'.(2) Is the current radar display system in Sydney the Interim Radar Display System (IRDS).(3) Is the IRDS year 2000 (millennium bug) compliant.3937Macdonald, Sen IanSenator Ian MacdonaldYW4QLDLPRegional Services, Territories and Local Government10—The Minister for Transport and Regional Services has provided the following answer to the honourable senator's question:Airservices Australia has advised that:(1) Airservices has a comprehensive program covering all aspects of its business. At this time, the majority of Airservices' internal systems have had the Year 2000 issue addressed. In some cases, the remedied or replacement systems are being placed into production during the first half of 1999. Testing and renovation of some existing systems is continuing in 1999. Some suppliers have undertaken to provide software upgrades in early 1999, or are yet to advise on the status of their embedded componentry. However, this slippage of the timetable is not expected to present any major problems.(2) Yes.(3) IRDS is due to be replaced by the TAAATS system before 1 January 2000. However as a contingency measure Airservices is also testing IRDS in case of slippage of the replacement. Testing so far confirms there are some known Year 2000 issues which do not affect functionality and which can be addressed by procedural workarounds, but more extensive testing is yet to be completed.3938(Question No. 232)2323938Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister for Industry, Science and Resources, upon notice, on 26 November 1998:(1) What was the total value of market research sought by the department on a month-by-month basis between March 1996 and November 1998.(2) What was the purpose of each contract let.(3) In each instance, what was the involvement or otherwise of the Office of Government Information and Advertising.(4) In each instance; (a) how many firms were invited to submit proposals; and (b) how many tender proposals were received.(5) In each instance, which firm was selected to conduct the research.(6) In each instance, what was the estimated or contract price of the research work and what was the actual amount expended by the department.3938Minchin, Sen NickSenator MinchinJX4SALPIndustry, Science and Resources10—The answer to the honourable senator's question is as follows:The Department of Industry, Science and Resources has tendered for fifteen contracts for market research between March 1996 and November 1998. The question is answered individually for each contract.(1) Total value sought:Month$ Value Sought1996May16,000June266,329July161,374September27,706October48,000November27,706December43,5381997January56,236February27,706March43,538April27,011May54,678June98,897July126,183August58,645September89,828October132,406November132,094December113,4661998January30,863February47,206March257,529April196,480 May131,661June844,543July34,500August199,254September189,605October240,015November229,873Total3,952,8702. Purpose3. OGIA4. (a)4. (b)5. Selected6. Estimated $7. Actual $General Client SurveyAdvice sought44Woolcott Research84,90069,804Domestic Tourism SurveyNot involvedOpen5Roy Morgan Research Centre861,5801,008,933International Visitors SurveyNot involvedOpen5AGB McNair Australia Pty Ltd/ A C Neilson McNair1,752,6011,516,689Benchmark researchAdvice sought44Worthington Di Marzio Pty Ltd50,00050,000Business and Service Delivery researchNot involved11Woolcott Research84,30087,300Science and Technology awareness researchAdvice sought11Woolcott Research75,00075,000Assessment of Science and Technology awareness researchAdvice sought11Mr Peter Collingwood, Policy & Communications Research Consultant.5,0005,000Target market and benchmark researchAdvice sought63Market Attitude Research Services Pty Ltd115,000115,000Industry market surveyNot involved63Yann Campbell Hoare Wheeler.74,74074,740Tracking researchAdvice Sought55Wallis Consulting Group Pty Ltd.100,00099,700Electricity supply industry export studyNot involvedOpen20Power Business Resources.105,02080,823National visitors surveyNot InvolvedOpen5ACNeilson McNair1,358,197766,531Mapping/Land Information industry researchNot involved11Palm Management1,9501,950Mapping/Land Information industry researchNot involved11Adecco Centacom1,4001,400Market research for development of a communications strategyAdvice sought43Wallis Consulting Group Pty Ltd.42,940Nil3939(Question No. 313)3133939Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Prime Minister, upon notice, on 1 December 1998:With reference to the past practice in which the Prime Minister has supplied answers across portfolios relating to the employment of departmental liaison officers (DLOs):(1) What is the standard allocation of DLOs per portfolio minister and per non-portfolio minister and parliamentary secretary. (2) In each instance how many DLOs have been allocated to each minister and parliamentary secretary.(3) In each instance what are the responsibilities of each DLO, where allocated on account of a major agency etc.(4) Which ministers have been allocated escort officers and how many.(5) Which ministers have staff undergoing short-term developmental experience in the offices of ministers and parliamentary secretaries, for example, Graduate Administrative Assistants, and how many.(6) What are the number of staff from the department and Cabinet's Parliamentary Liaison Office assisting the Leader of the House and the Manager of Government Business in the Senate. 3940Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—This answer replaces the answer previously supplied to the honourable senator's question:(1) The standard allocation is two DLOs for portfolio ministers, and one for non-portfolio ministers and parliamentary secretaries. There are exceptions to the standard allocation, usually where a minister has responsibility for more than one major agency, either within the portfolio or another portfolio, or for times of peak activity requiring additional liaison.(2) See Table 1 (attached) for DLOs currently allocated.(3) The DLOs have responsibility for facilitating liaison between the minister and the department or agency in relation to administrative and policy matters. The range of duties varies depending on the level and skills of the DLO, as well as on the work priorities of the minister's office and department or agency from time to time.(4) Consistent with past practice, the Minister for Defence, the Hon John Moore, MP, and the Minister Assisting the Minister for Defence, the Hon Bruce Scott, MP, have each been allocated one escort officer.(5) Consistent with past practice, public servants may undertake short-term developmental opportunities in ministers' offices. The Office of the Minister for Veterans' Affairs regularly takes a placement from the Department of Veterans' Affairs' Graduate Administrative Assistant program.(6) The Department of the Prime Minister and Cabinet provides four staff in the parliamentary liaison role. One parliamentary liaison officer (PLO) and an assistant to the PLO are made available in the House of Representatives and the Senate.TABLE 1:DEPARTMENTAL LIAISON OFFICERS AS AT 9 MARCH 1999ABBOTT1ABETZ1ALSTON2ANDERSON2ANTHONY1BISHOP1CAMPBELL1COSTELLO3DOWNER3ELLISON1ENTSCH1FAHEY2FISCHER2HEFFERNAN1HERRON2HILL2HOCKEY1HOWARD2KELLY1KEMP, D3KEMP, R2MACDONALD2*MCGAURAN1MINCHIN2MOORE2NEWMAN4PATTERSON1REITH2RUDDOCK2SCOTT2 SLIPPER1STONE1SULLIVAN1TAMBLING1TROETH1TRUSS2TUCKEY1VAILE2VANSTONE3WILLIAMS2WOOLDRIDGE2WORTH1* includes one part-time position used in Parliamentary sittings periods.3941(Question No. 337)3373941O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Transport and Regional Services, upon notice, on 7 December 1998:(1) With reference to the answer to question on notice no. 1 (Senate Hansard, 23 November 1998, p318) can the Minister advise on how the 10 day rule contributed to the closure of Sydney Airport in July 1998.(2) What other factors contributed to that closure.(3) Can it be confirmed that a number of replacement controllers were excluded from being called in as a consequence of the 8 day rule introduced by Mr Ludlow.(4) Can it be confirmed that the closure was a result of Mr Ludlow's 8 day rule rather than the 10 day rule provided for in the Airservices enterprise bargaining agreement.(5) Has Airservices Australia now withdrawn Mr Ludlow's 8 day rule; if so, when did this occur.(6) Was Mr Ludlow's 8 day rule withdrawn following a hearing of the industrial Relations Commission.(7) With reference to part 4 of the answer to question on notice no. 1, which states that the 10 day rule is a maximum and is subject to a `variation based on local circumstances': can a copy be provided of the document(s) that state that rostering principles are subject to `variation based on local circumstances'.3941Macdonald, Sen IanSenator Ian MacdonaldYW4QLDLPRegional Services, Territories and Local Government10—Representing the Minister for Transport and Regional Services has provided the following answer to the honourable senator's question:Airservices Australia has advised that: (1) The reference to the "10 day rule" was in error and should have referred to the "8 day rule" that had been introduced prior to that time.Under both the 10 day rule and the 8 day rule there could be a reduction in the number of air traffic controllers that would be available to replace staff who were absent from duty.(2) High sick leave levels, late notice of the absence of one of the night shift controllers and the contingency arrangements that were in force at the time.(3) Yes. However, a major factor leading to the non-availability of replacement staff in July 1998 was late notice given by the second night shift controller.(4) Refer to replies to questions (2) and (3) above.(5) The rostering arrangements introduced by Mr Ludlow were withdrawn on 9 July 1998.(6) No. The arrangements were withdrawn prior to the Industrial Relations Commission hearing.(7) The enterprise bargaining agreement provided for a minimum of three shifts and a maximum of 10 shifts to be worked and the Minister has arranged for a copy of the relevant section to be forwarded to your office.3941(Question No. 424)4243941Margetts, Sen DeeSenator MargettsDX5WAG(WA)00 asked the Minister for the Environment and Heritage, upon notice, on 1 March 1999:(1) Is the Minister aware of advice from the Australian Government Solicitor to the Heritage Protection Section of the Department of Communications and the Arts on 6 August 1997, to the effect that Jervoise Bay lies beyond the geographical limits of the State of Western Australia and that it is part of `Australian waters'. (2) Does the Minister agree that significant development projects in Australian waters should be subject to federal rather than state environment protection legislation.(3)In the light of this advice from the Australian Government Solicitor, will an environmental impact assessment of the proposed development of harbour facilities in Jervoise Bay be initiated under the Environment Protection (Impact of Proposals) Act 1974.3942Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The answer to the honourable senator's question is as follows:(1) I understand that advice has been given that Jervoise Bay lies within "Australian waters" as defined in the Historic Shipwrecks Act 1976. I am advised that the expression as used in that Act includes waters over which the Coastal Waters (State Powers) Act 1980 recognises State legislative powers.(2) The Environment Protection (Impact of Proposals) Act 1974 (EPIP Act) applies to environmentally significant Commonwealth actions, regardless of the location of the project to which the action relates, and even though State or Territory legislation also applies to the project. The EPIP Act does not seek to exclude State and Territory environment assessment processes. In fact, the Administrative Procedures approved under section 6 of the EPIP Act oblige me, when deciding what assessment action is required, to take account of any relevant assessments by a State or Territory.(3) I have already considered the Jervoise Bay project in accordance with the EPIP Administrative Procedures and provided a recommendation to the Commonwealth Minister for Industry, Science and Resources. I took account of the assessment of the project carried out by the Western Australia Government.3942(Question No. 435)4353942O'Brien, Sen KerrySenator O'Brien8O6TASALP00 asked the Minister representing the Minister for Agriculture, Fisheries and Forestry, upon notice, on 2 March 1999:(1) Is the Australian Quarantine and Inspection Service (AQIS) responsible for guarding against the introduction of exotic diseases with the importation of live horses.(2) What period of quarantine is each imported horse subjected to on entry to Australia.(3) How many thoroughbred and standardbred stallions entered Australia in the 1994-95, 1995-96, 1996-97 and so far in the 1998-99 financial years.(4) (a) Which country did each stallion come from; and (b) How long did each stallion remain in Australia.(5) Is AQIS responsible for guarding against the transfer of exotic diseases with the export of live horses.(6) What process does AQIS follow in assessing the disease status of each exported horse prior to its shipment overseas.(7) (a) How many thoroughbred and standardbred stallions were exported from Australia in the 1994-95, 1995-96, 1996-97, 1997-98 and so far in the 1998-99 financial years; and (b) What was the destination of each stallion.3942Alston, Sen RichardSenator AlstonLD4VICLPCommunications, Information Technology and the Arts10—The Minister for Agriculture, Fisheries and Forestry has provided the following answer to the honourable senator's question:(1) Yes.(2) Horses from New Zealand are not required to undergo post arrival quarantine (PAQ) because their health status is considered to be equivalent to that of Australian horses. Horses from countries other than New Zealand must undergo a minimum of 14 days PAQ. During this time, imported horses are monitored closely for any signs of disease or ill health. Any sign of illness could result in further health testing or an extension of quarantine for the whole consignment.(3) AQIS retains copies of each horse import permit in its Regional Offices, but does not have a computerised database from which to electronically extract the specific information requested. The following table has been compiled from a manual search of the files for 1997-98 and 1998-99.COUNTRYTHOROUGHBREDTHOROUGHBREDSTANDARDBREDSTANDARDBRED1997-981998-991997-981998-99USA2321146UK3533 Ireland1614France2Japan911Hong Kong1New Zealand21918(4) (a) The above table summarises this information.(b) With three exceptions, the stallions were imported for the breeding season. They arrived in Australia in July and were re-exported in late December of the same year.In 1997-98 two of the imported stallions (one from UK and one from Japan) remained in Australia permanently whilst the third one was here for three weeks in late October/early November (Melbourne Cup runner).(5) AQIS provides export documentation to verify that exported animals meet both the import-ing country's requirements and our international trade obligations.(6) The process used by AQIS involves testing for specific diseases of concern to the importing country and a physical examination of each exported horse to ensure that it is healthy and fit to travel.(7) (a) Between 1200 and 1600 horses are exported from Australia each year. The following table listing the numbers of stallions exported, has been compiled from a manual search of the export files for 1997-98 and 1998-99.COUNTRYTHOROUGHBREDTHOROUGHBREDSTANDARDBREDSTANDARDBRED1997-981998-991997-981998-99USA2321166UK3433Ireland1614France2Japan10131Philippines4Indonesia31Singapore23Hong Kong1Thailand1New Zealand17171918(b) The above table summarises this information.3944(Question No. 438)4383944Brown, Sen BobSenator BrownQD4TASAG00 asked the Minister representing the Prime Minister, upon notice, on 5 March 1999:With reference to native forest management in Victoria:(1) Does the East Gippsland Regional Forest Agreement require the Victorian Government to comply with the `sustainable' sawlog yields set by the Victorian Forests Act 1958.(2) Is compliance with Victoria's legislated sustainable yields relevant or necessary to the achievement of ecologically sustainable forest management.(3) Will the Minister: (a) investigate the evidence presented by the Otway Ranges Environment Network to the Rural and Regional Affairs and Transport Legislation Committee for its inquiry into the Regional Forest Agreement Bill 1998, which showed that in a number of forest management areas (FMA) in Victoria logging is occurring well above the levels consistent with maximum sustainable yields; and (b) require the Victorian Government to provide evidence reconciling the quantity of sawlogs harvested in the East Gippsland, Benalla/Mansfield, Midlands and Wodonga FMAs with the legislated maximum sustainable yields for these regions.(4) Will the Minister investigate the illegal reclassification of sawlogs as residual logs which is clearly occurring in Victoria and contributing to over-logging in some areas.3944Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The Prime Minister has provided the following answer to the honourable senator's question:(1) The requirement for legal compliance with particular levels of timber harvesting is governed by the Victorian Forests Act 1958.(2) Achieving ecologically sustainable forest management in Victoria is the responsibility of the Victorian Department of Natural Resources which is also required to comply with relevant State legislation on sustainable yield.(3) The issues raised will be forwarded to the Victorian Department of Natural Resources and Environment for its advice.(4) The classification of sawlogs in Victoria is the responsibility of the Victorian government.3945(Question No. 439)4393945Brown, Sen BobSenator BrownQD4TASAG00 asked the Minister representing the Minister for Forestry and Conservation, upon notice, on 5 March 1999:(1) What is the total number of people employed in Australia's wood products and paper industries?(2) (a) of these how many are employed in industries based on native forest wood, plantation wood and imported wood, Australia-wide and stateby state; and (b) what are the volumes of wood cut in each category to which the employment figures relate?3945Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The Minister for Forestry and Conservation has provided the following answer to the honourable senator's question:(1) Australia's State of the Forest Report 1998 produced by Bureau of Rural Sciences estimated that 84 200 people were employed in 1995 (see Table 1).(2) (a) Employment associated with the native forests, plantation and imported wood component of the industry is not recorded separately.(b) The number of people employed that relates directly to the volumes of wood cut by category is not available. However, ABARE has produced data on major forest products for 1996-97 and 1997-98 (see Table 2).Table 1: Direct employment in the forest sector (in thousand)19881989199019911992199319941995Forestry and Logging11.812.410.910.911.010.812.411.0Log sawnmilling and timber dressing16.119.818.116.516.919.219.819.9Other wood product manufacturing30.437.334.231.031.836.130.730.0Paper and paper product manufacturing28.024.523.322.120.718.420.223.3Total forestry and wood products sectors86.394.086.580.480.484.583.184.2Source: Bureau of Rural Sciences, Australia's State of the Forests Report, 1998.Table 2: Australian production of wood and paper products manufacturing1996-971997-98ktktPaper and Paper productsNewsprint421444printing and writing paper364424Household and sanitary181191Packaging ant industrial paper14521483Subtotal24182542 Sawntimber000m3000m3Broadleaved (hardwood)13221365Coniferous (softwood)20622292Subtotal33843657Wood based panels000m3000m3Plywood151170Particleboard790882Medium Density Fibreboard436501Subtotal137715533946(Question No. 441)4413946Brown, Sen BobSenator BrownQD4TASAG00 asked the Minister for Family and Community Services, upon notice, on 8 March 1999:(1) Why does the Government not provide the concession/discount benefits to early independent retirees that it extends to older retirees/pensioners.(2) Would it not be of benefit to the Government to provide some incentive for eligible workers to take early retirement as they continue to pay taxes and create new employment opportunities for younger people.3946Newman, Sen JocelynSenator NewmanBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The answer to the honourable senator's question is as follows:(1) and (2) Budget resources for social security purposes are limited and assistance is targeted to those most in need.One targeting method is means testing based on income and assets. Another method, which has been part of Australia's age pension system since its inception at the beginning of this century, is to limit assistance to those above the `age pension age', currently 65 for men and 61 for women (increasing to 65 by 2013). Extending the same concessions currently available to age pensioners, to younger people, would involve additional costs to the Budget, and ultimately to taxpayers.The Government is also keen to ensure that people have the opportunity, during their working lives, to accumulate savings sufficient to provide them with a comfortable income in retirement. For most, this is most likely to be achieved if they do not retire early from the workforce. To assist people to accumulate retirement savings, the Government provides substantial tax concessions in support of superannuation. In addition, some recent initiatives have encouraged people to extend the number of years they remain in the workforce. In particular, the Government has introduced the Pension Bonus Scheme and now allows people who have a genuine attachment to the workforce to continue contributing to superannuation until they are 70 years old. If older people do remain longer in the workforce the Government does not believe that this will cause any significant displacement of jobs for younger people. Moreover national income and tax revenues are likely to be boosted.3946(Question No. 445)4453946Allison, Sen LynSenator Allison1M6VICAD00 asked the Minister for Family and Community Services, upon notice, on 8 March 1999:(1) Will there be any assessment by Centrelink on the success (or otherwise) of the current work ability tables (WATs) for clients with a psychiatric disability.(2) Because mental illness is usually episodic in nature and many Centrelink clients with a psychiatric disability lack insight about their disability, thereby making the work ability information assessment unreliable, how then can they not be disadvantaged by this system.(3) Considering the unreliability of WATs for clients with a psychiatric disability, how does the Government expect to receive accurate information from the current application of the new WATs.(4) Why, when a national pilot of WATs was undertaken with the assistance of 90 people with a mental illness, which showed that WATs did not determine disability levels are the WATs now being used to determine disability levels.(5) On what basis is the Minister assuming the WATs score accurately reflects the support needs of people with psychiatric disability and consequently the type of employment service they require to be streamed towards.(6) Why, when international research shows that work capacity of people with psychiatric disability cannot be measured using assessment tools such as WATs is Australia choosing to use such a test for such a purpose.(7) Does the Government intend to use the WATs score for any other purpose than the broad streaming of people with psychiatric disability to the Department of Workplace Relations and Small Business or the Department of Family and Community Services (FaCS) funded services, for example, to determine funding levels under proposed case-based funding trials for FaCS funded services.(8) Why, when there has been a national uproar about the use of WATs from almost every disability group and even from within Centrelink itself, is the Government considering basing $5 million of case-based funding on the score a disabled person obtains from the WATs.(9) Why, when universities and institutes have shown that the reliability and the validity of WATs is highly questionable and it has never been validated in any form for people with psychiatric disabilities, is the Government continuing to force people to complete the test and receive services on the basis of an invalid score.(10) As the current WATs system is not sensitive to the needs of people with a psychiatric disability, would the Minister consider a more suitable alternative assessment process.3947Newman, Sen JocelynSenator NewmanBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The answer to the honourable senator's question is as follows:(1) No. However, the Department of Family and Community Services (FaCS) is evaluating the effectiveness of the WATs as a streaming tool for job seekers with disabilities, including those with psychiatric disabilities.(2) Work ability information is derived from information provided by the job seeker and from professionals nominated by the job seeker. Professionals include treating doctors, counsellors, social workers, teachers, etc. Centrelink provides training and guidelines to its staff, including its Disability Officers, to ensure that people from all disability groups are identified and assessed effectively. If a job seeker with a disability is dissatisfied with Centrelink's employment assessment decision, they can seek a review. Job seekers with disabilities can also directly approach a specialist disability employment service of their choice, who can support them through the assessment process.(3) The WATs tool was trialled between 1995 and 1997. People with psychological/psychiatric disabilities constituted the second largest population in the study. The results for this group were consistent with the overall population. The WATs was found to be the best available determinant of work ability across a range of disability groups. There is no clear evidence at this stage to indicate that the WATs tool discriminates against any group in estimating work ability. On behalf of the Disability Industry Reference Group, FaCS has recently commissioned further research into the effectiveness of the WATs as a streaming tool for job seekers with particular disabilities.(4) See answer to Q. (3)(5) The WATs tool is not used to assess support needs. It is only used as a streaming tool between mainstream employment services and specialist disability employment services. Specialist disability employment services assess the support needs of each individual and develop appropriate programs.(6) The assessment tool is only used to differentiate people best suited to mainstream employment services or specialist disability employment services. In 1996 the Department of Health and Family Services assessed 87 existing instruments worldwide and found the WATs to be the most effective assessment tool available.(7) At this stage, the WATs tool is only being used to inform the eligibility for the Disability Support Pension (DSP) and to stream people with disabilities to employment assistance. A departmental industry working group (comprised of representatives from ACROD, the National Caucus of Disability Consumer Organisations, and the Association of Competitive Employment) is considering funding models and administrative requirements for the case-based funding trials.(8) See answer to Q. (7).(9) The WATs tool is the best available determinant of work ability. However, a research project is being commissioned to assist the Disability Industry Reference Group provide advice on the impact of the WATs tool on the profile of job seekers using FaCS-funded services. (10) Yes. A number of alternatives have already been considered. Recent proposals from ACROD and the Psychiatric Inter-agency Meeting of Employment Services are currently being considered.3948(Question No. 448)4483948Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 9 March 1999:How many COMCARE claims have been made by Ministerial and Parliamentary Services Division staff in the 1997-98 financial year.3948Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:103948(Question No. 472)4723948Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 9 March 1999:(1) Between 1 July 1998 and 28 February 1999, what equipment has been provided and/or replaced for the Government Members Secretariat, for example; mobile phones, photocopiers, colour printers, fax machines, folding and inserting machines, guillotines, franking machines, computer equipment, including software, etc.(2) What has been the cost in each instance of the equipment provided.3948Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) and (2)(1) Equipment Type(2) Cost5x Nokia 5110 mobile phones*$19555x Nokia mobile phone data suites*$8452x Mobile phone belt clips*$302x Mobile phone pouches*$302x Lithium ion batteries*$3583x Mobile phone hands free kits*$1891x Reachout Remote Software** plus1x Viewer Software**$454$801x Adobe Acrobat 3.0.1**$4151x Thinkpad 600 plus accessories** $266 per month over 36 months from August 19981x HP8000 Printer**$65 per month over 36 months from September 19982x Parallel Port Cables (3m and 10m)**$1121x Thinkpad 380Z**$204.45 per month over 36 months from December 19985x Standard PCs***$112 each per month over 36 months from February 1999* Replacement of old equipment** New equipment*** Replacement by DOFA through standardisation project—not requested by GMS3948(Question No. 473)4733948Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 9 March 1999:Was any equipment from the Government Members Secretariat relocated to Melbourne between 30 August 1998 and 5 October 1998; if so, what equipment and what was the cost of relocating such equipment.3948Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:No. The Department has been advised by the Government Members' Secretariat that four staff who regularly use laptop computers whilst in Canberra and when travelling had their laptops with them as a matter of course whilst they were in Melbourne between those dates. There was no additional cost involved.3949(Question No. 474)4743949Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:Given the increased provision of and use of on-line facilities for the rapid dissemination of election results:(1) What was the total cost of establishing and running the National Tally Room on 3 October 1998.(2) How much of this cost was offset by cost recovery mechanisms.3949Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) The total cost of the 1998 Federal election National Tally Room was $499,448. This amount excludes the cost of providing election results through the internet "virtual tally room".(2) None of this cost was offset by cost recovery mechanisms. It should be noted that major television networks were only provided with space, data feeds and a small number of computer terminals connected to the AEC election night system. The networks covered all their own costs including power, security, communication lines, set construction etc.3949(Question No. 475)4753949Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:Given that it is unlawful to discriminate against a person in an employment matter because of the person's lawful political activities or beliefs: Has an application been made by the Australian Electoral Commission for an exemption from this requirement for staff employed by the Commission; if so what was the outcome of the application.3949Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:An application was made by the Australian Electoral Commission (AEC) to the Public Service and Merit Protection Commission in 1993 for an exemption under the discrimination provisions (s.22B) of the Public Service Act 1922.As a result of this application, Executive Council approved a new Public Service Regulation 71AA on 6 July 1993 which permits discrimination on the basis of political activities or beliefs in appointments, transfers and promotions, where that discrimination is essential for the effective performance of the duties of an officer in, or as an unattached officer of, the AEC.The AEC's policy on political neutrality does not breach the Human Rights and Equal Opportunity Commission Act 1986. The Act allows discrimination based on the "inherent requirements of the job".3949(Question No. 476)4763949Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:What was the extent and cost of habitation reviews undertaken by the Australian Electoral Commission between March 1996 and October 1998.3949Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:Habitation reviews or roll reviews, including inquiry at habitable addresses by field staff, review by mail (particularly in rural areas) and general checks on address details are organised and carried out by the Australian Electoral Commission (AEC) at the state and territory level. The reviews undertaken for the period requested are set out below.(a) New South Wales: A full review using both fieldwork and mail review was undertaken between February and July 1998 and the total cost was $5.5 million.(b) Victoria: During 1997/98 targeted review activity was undertaken in country and outer Melbourne areas in connection with rural road numbering. The total cost was $95,000. From February to August 1998 a review of non-rural areas was undertaken by fieldwork and by limited mail review. The total cost was $3.5 million.(c) Queensland: Between July 1996 and January 1997 a pilot study of a continuous roll update was undertaken in Queensland using Australia Post's change of address data backed up with limited fieldwork, at a total cost of $450,000. A full review using both fieldwork and mail review was undertaken between July 1997 and February 1998. The total cost was $3 million. (d) South Australia: Pre review checks of vacant habitations and postal address checks were undertaken between March 96 and June 1997 at a cost of $17,000. A full review using both fieldwork and mail review was undertaken between July 1997 and October 1998. The total cost was $1.1 million.(e)Western Australia: A full review using both fieldwork and mailing was undertaken between February and August 1998, at a total cost of $1.7 million.(f) Tasmania: In 1996/97, $20,000 was expended on limited change of address mailings plus checks on rural addresses. Between August and October 1997 a full state review was undertaken, at a total cost of $420,000. In June 1998 review mailing to vacant addresses took place, at a total cost of $15,000.(g) Australian Capital Territory: A partial review of high growth areas took place between February and May 1997, at a total cost of $30,000. A full review took place between August 1997 and February 1998, at a total cost of $280,000.(h) Northern Territory: Limited review activity targeting high growth areas took place between April and June 1997, at a total cost of $65,000. A full review of the Territory took place between February and August 1998, at a total cost of $260,000. Note that while all fieldwork was completed prior to the 1998 federal election certain follow up activities were not finished by October 1998.(i) National Review Activities: Prior to the close of rolls for the Constitutional Convention Election in 1997, national mailing took place to vacant addresses held by the AEC and to addresses at which Australia Post had received a change of address notification. Total cost of this roll review activity was approximately $1 million. So that enrolment forms can be obtained from new citizens, the AEC arranges for the pre-printing of enrolment forms with citizenship certificates and their collection at ceremonies at an annual cost of $350,000.3950(Question No. 477)4773950Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:(1) How many new parties were registered by the Australian Electoral Commission in the period from March 1996 to October 1998.(2) How many parties were deregistered by the commission in the period from March 1996 to October 1998. 3950Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) There were 17 political parties registered in the period from March 1996 to October 1998.(2) There were 12 political parties deregistered in the period from March 1996 to October 1998.3950(Question No. 478)4783950Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:What are the names and positions of the Members of the Redistribution Committees for South Australia and New South Wales.3950Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:On 15 February 1999, the Australian Electoral Commission appointed the following persons to be the Redistribution Committee for South AustraliaMr Bill Gray—Electoral Commissioner; Mr Geoff Halsey—Australian Electoral Officer for South Australia; Mr Peter Kentish—Surveyor-General for South Australia; and Mr Ken MacPherson—Auditor-General of South Australia.On 2 March 1999 the Australian Electoral Commission appointed the following persons to be the Redistribution Committee for New South WalesMr Bill Gray—Electoral Commissioner; Ms Frances Howat—Australian Electoral Officer for New South Wales; Mr Don Grant—Surveyor-General for New South Wales; and Mr Tony Harris—Auditor-General of New South Wales.The appointments to these Redistribution Committees were made in accordance with Section 60 of the Commonwealth Electoral Act 1918.3950(Question No. 479)4793950Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:(1) What was the total cost of advertising (segregated by TV, radio and print) undertaken by the Australian Electoral Commission between 30 August 1998 and 3 October 1998.(2) Has an evaluation been conducted by the Commission into the effectiveness of its advertising.(3) What was the cost of the evaluation and by whom was it conducted. 3951Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) Total cost of advertising was $8,187,256 and was segregated as follows:TV—$3,664,378; Radio—$1,041,220; and Print—$3,481,658.(2) Yes, an evaluation has been conducted.(3) Cost of evaluation was $206,655 and was conducted by Eureka Strategic Research (Sydney)3951(Question No. 480)4803951Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:How many visits have there been to the Australian Electoral Commission's home page.3951Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:Between August 1998 and 15 March 1999 there were 97,315 visits to the Australian Electoral Commission home page which corresponds to over 19.3 million hits (pieces of information sent).3951(Question No. 481)4813951Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:Have any consultants been engaged by the Australian Electoral Commission to evaluate Year 2000 compliance; if so, who has been engaged and at what cost.3951Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:The Australian Electoral Commission has not directly employed any consultants to evaluate Year 2000 compliance. However, the AEC is part of Cluster 3, and has outsourced its IT infrastructure to Computer Sciences Corporation. The Cluster Management Office, on behalf of the Cluster 3 agencies, contracted Admiral Management Services to conduct an audit of the Year 2000 status of CSC. The cost will be approximately $19,000, of which the Office for Government Online will pay 50%. The AEC will therefore pay 20% of the remaining $9,500. That is, $1,900. 3951(Question No. 482)4823951Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:What was the total cost of the winding up of the Australian Electoral Commission's Aboriginal and Torres Strait Islander Electoral Information Service.3951Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:The total cost of winding up the Aboriginal and Torres Strait Islander Electoral Information Service (ATSIEIS) was $186,355. As ex-ATSIES staff remained employed by the Commission, undertaking field work for the 1996 ATSIC Regional Council elections for approximately 4 months after the ATSIEIS program ceased, winding up costs were considerably reduced. In addition, those ex-ATSIEIS staff that were permanent officers were either employed in other positions within the AEC or returned to their original departments. This again had the effect of reducing potential wind up costs.3951(Question No. 483)4833951Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:What was the total cost of the Australian Electoral Commission's Electoral Education Centres in Canberra and Melbourne.3951Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:The Canberra Electoral Education Centre (EEC) commenced operation in 1986 in a leased wing of the Lyons Primary School. Since that time the Centre has been progressively upgraded from what was effectively several converted classrooms to what is now an EEC that has attracted international best-practice recognition. Since the opening of the Canberra EEC there have been four major capital costs incurred totalling approximately $1,100,000. These costs comprised the initial conversion into an EEC, a major refurbishment, the development and installation of the current audio-visual program, and the development and installation of a touchscreen computer system. The total running cost for the 1998/99 financial year, including rent, salaries and resource materials, is estimated at $474,000 (this amount includes one abnormal item—$50,000 for touchscreen computer system updates for the 1998 Federal election)The Melbourne EEC was relocated from South Melbourne to the central business district in 1997. The capital cost of the new Melbourne EEC was $1,000,000. The total running cost for the 1998/99 financial year, including rent, salaries and resource materials, is estimated at $297,000.3952(Question No. 484)4843952Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:(1) What instances does the Australian Electoral Commission provide electoral services to organisations on a competitive or cost recovery basis.(2) Where it does so, what is the charging regime applied by the Commission.3952Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) The Australian Electoral Commission (AEC) provides all non-parliamentary electoral services to organisations on a competitive or cost recovery basis in situations, except:* where there is a statutory requirement for the AEC to conduct the elections free of charge, for example, elections conducted under the Workplace Relations Act 1996;* where the AEC has been directed by the Federal Court to conduct a ballot, or* where the Australian Industrial Relations Commission has directed that a secret ballot be conducted and the AEC has agreed to conduct the ballot.(2) The AEC conducts elections and ballots for the Aboriginal and Torres Strait Islander Commission (ATSIC) under the Aboriginal and Torres Strait Islander Act 1989. Funding for this is provided by ATSIC.For all other elections and ballots, the AEC charges on the basis of full cost recovery as a minimum. This calculation includes overheads, return on capital and project management costs. Australian Electoral Officers have the discretion to include additional amounts for risk management or other relevant factors. 3952(Question No. 485)4853952Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:(1) What was the total Senior Executive Service and above staffing establishment at the Australian Electoral Commission in each of the 1996, 1997 and 1998 calendar years.(2) In each instance, how many of those staff were female?3952Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) The Australian Electoral Commission has two categories of staff at the equivalent of Senior Executive Service level (and above). Both categories are appointed under the provisions of the Commonwealth Electoral Act 1918 (the Act): no staff at these levels are employed under the Public Service Act 1922.Division 3 of the Act provides for statutory appointments of staff by the Governor-General, including staff at these levels. The other category of staff at these levels is engaged by the Commission on behalf of the Commonwealth, under paragraph 35(1)(b) of the Act.As at 31 December in each case, the AEC had the following total staffing numbers at these levels:1996—14; 1997—13; 1998—13*(2) The number of female staff at the equivalent of Senior Executive Service level (or above), again as at 31 December in each case, was;1996—1; 1997—1; 1998—2** Note: as at 31 December 1998, one of the Senior Executive Service equivalent level positions was not filled on a permanent basis, following the resignation of the previous staff member. The staff member acting in the position is female.3952(Question No. 486)4863952Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:(1) How many freedom of information requests were received by the Australian Electoral Commission in the 1996-97 and 1997-98 financial years.(2) How many of those requests were: (a) granted partially or in full; and (b) refused. (3) In how many instances was a fee waiver: (a) sought; and (b) granted, either partially or in full.3953Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) 1996-97—4 FOI requests were received. 1997-98—4 FOI requests were received(2) (a) 1996-97—4 FOI requests were granted partially or in full. 1997-98—4 FOI requests were granted partially or in full. (b) 1996-97—nil FOI requests were refused. 1997-98—nil FOI requests were refused(3) (a) 1996-97—No waivers were actually sought, however the AEC waived fees and charges for two of the requests made by people seeking access to their own personal records. 1997-98—One actual request for waiver was received. Fees and charges were waived for another two requests made by people seeking access to their own personal records. (b) 1996-97—nil waivers granted. 1997-98—1 waiver granted.3953(Question No. 487)4873953Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:(1) From 1 July 1998 to 29 February 1999, how many market research or polling organisations were engaged to undertake projects for the Australian Electoral Commission?(2) In each instance: (a) what was the purpose of the project; (b) which firms were engaged; and (c) at what cost.3953Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) Only one market research organisation was engaged.(2) (a) Purpose was for advertising tracking and post election survey. (b) The firm engaged was Eureka Strategic Research. (c) The cost was $206,655. 3953(Question No. 488)4883953Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:Have any matters relating to the Australian Electoral Commission been the subject of a complaint or referral to the Commonwealth Ombudsman since March 1996; if so, how many.3953Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:The Office of the Commonwealth Ombudsman has advised that in the period since 1 March 1996, 135 new complaints against the Australian Electoral Commission (AEC) have been received and 138 complaints finalised. There are four matters currently receiving attention.Of the 138 complaints finalised in the period since March 1996, three were withdrawn or lapsed and 47 were investigated by the Ombudsman. In the remaining 88 cases, the Ombudsman exercised the discretion available under section 6 of the Ombudsman Act 1976 not to investigate, in almost all cases because the matter was already under consideration by the AEC or the Minister, or because the complainant had already raised the matter with the AEC. The predominant issue in complaints investigated was the removal of names from rolls and claims by complainants that they had enrolled but their names did not appear on the rolls or were added too late to allow them to vote.The Office of the Ombudsman further advises that 85% of complaints were received by telephone, and it is estimated that around 90% of the 47 matters investigated were dealt with by telephone.3953(Question No. 489)4893953Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 8 March 1999:(1) When did the Australian Electoral Commission complete its 1997-98 Annual Report.(2) How long did the Auditor-General take to certify the annual accounts.3953Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) The Australian Electoral Commission's 1997-98 Annual Report was completed on 6 October 1998.(2) The Australian National Audit Office audit team arrived at the Australian Electoral Commis sion to commence the final audit of the 1997-98 financial statements on 16 September 1998 and the certificate was signed on 1 October 1998.3954(Question No. 516)5163954Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Prime Minister, upon notice, on 9 March 1999:What was the total cost during the 1997-98 financial year of the provision of newspapers, magazines and other periodicals to the minister's: (a) Parliament House office; (b) home/state ministerial office; and (c) private home.3954Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The Prime Minister has provided the following answer to the honourable senator's question:(a) $31,909.80; (b) $8,946.90; and (c) $4,599.05 (total cost for The Lodge and Kirribilli House).3954(Question No. 523)5233954Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister for Family and Community Services, upon notice, on 9 March 1999:(1) What was the total cost during the 1997-98 financial year of the provision of newspapers, magazines and other periodicals to the minister's: (a) Parliament House office; (b) home/state ministerial office; and (c) private home.3954Newman, Sen JocelynSenator NewmanBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The answer to the honourable senator's question is as follows:(1) (a) $5287.99; (b) nil; and (c) nil.3954(Question No. 539)5393954Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Minister for Community Services, upon notice, on 9 March 1999:(1) What was the total cost during that 1997-98 financial year of the; provision of newspapers, magazines and other periodicals to the minister's: (a) Parliament House office; (b) home/state ministerial office and (c) private home.3954Newman, Sen JocelynSenator NewmanBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The Minister for Community Services has provided the following answer to the honourable senator's question:(1) There was no Minister for Community Services for this period. The new government ministry was announced on 18 October 1998 and I was sworn in on 21 October 1998.3954(Question No. 553)5533954Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister for Family and Community Services, upon notice, on 9 March 1999:(1) What was the total expenditure on preparing the department for the move to accrual accounting for the 1997-98 financial year.(2) What was the department's forecast for expenditure in this area.(3) (a) In which instances were firms or individuals engaged to provide consultancy services associated with the shift to accrual accounting by the department; and (b) which firms or individuals were engaged.(4) (a) What was the total number of days that consultants were engaged to provide this advice or services; (b) at what cost per day in each instance; and (c) what was the total cost of the each consultancy in each instance.(5) (a) What is the estimated expenditure on outside consultants to advise on accrual accounting for the 1998-99 financial year; and (b) how much has been spent to date.(6) What is the estimated total departmental expenditure on preparing for accrual accounting for the 19998-99 financial year.3954Newman, Sen JocelynSenator NewmanBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The answer to the honourable senator's question is as follows:(1) Nil.(2) Nil.(3) (a) The Department engaged consultants in 1998-99 for accrual training. (b) The Department engaged CIT Solution to conduct the training.(4) (a) The consultants were engaged for 24 half day courses. (b) Dependent on course (c) $29,795.(5) (a) Estimated expenditure for consultants for 1998-99 is $44,695. (b) $29,795.(6) $44,695. 3955(Question No. 562)5623955Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Minister for Immigration and Multicultural Affairs, upon notice, on 9 March 1999:(1) What was the total expenditure on preparing the department for the move to accrual accounting for the 1997-98 financial year.(2) What was the department's forecast for expenditure in this area.(3) (a) In which instances were firms or individuals engaged to provide consultancy services associated with the shift to accrual accounting by the department; and (b) which firms or individuals were engaged.(4) (a) What was the total number of days that consultants were engaged to provide this advice or services; (b) at what cost per day in each instance; and (c) what was the total cost of each consultancy in each instance.(5) (a) What is the estimated expenditure on outside consultants to advise on accrual accounting for the 1998-99 financial year; and (b) how much has been spent to date.(6) What is the estimated total departmental expenditure on preparing for the 1998-99 financial year.3955Vanstone, Sen AmandaSenator Vanstone7E4SALPJustice and Customs10—The Minister for Immigration and Multicultural Affairs has provided the following answer to the honourable senator's question:(1) The Department has not maintained separate records on expenditure on preparing for the move to accrual accounting. Where direct costs have been incurred, these have been provided.For 1997-98 the Department spent a total of $26,400 on the provision of accrual training, based around the training modules prepared by the Department of Finance and Administration. Of this $10,600 was spent in Central Office and $15,800 was spent by the State and Territory Offices.Some $2.7 million was also spent on the implementation of a new financial management and information system (SAP R/3) to accommodate the move to accrual accounting and Year 2000 compliance.(2) $450,000. This estimate included formal training, plus the provision of workshops (including travel from interstate) for the development of the Department's outcomes/output framework.(3) (a) Training. (b) The Canberra Institute of Technology was engaged to provide training to staff in the central office of the Department. The State and Territory Offices made their own arrangements for the provision of training, primarily through similar bodies.(4) (a) 17. (b) In central office where figuring is available, $805 per half day, $1,605 per full day and $3,275 for a two day course. (c) $26,400.(5) (a) $236,800 including in 1998-99 $60,000 for a part-time senior contract accountant to provide assistance in the comprehensive integration of accrual budgeting, accounting and reporting.(b) $46,800 as at 23 March 1999.(6) $626,800. This includes the direct costs outlined above for contracts for training and accountancy services and an estimate of the indirect costs of implementation in the resource management areas of the Department of $390,000 (around six full-time senior officer equivalents). In addition, within the Divisions, State and Territory Offices considerable staff time has been utilised to consider the local and program implications of accrual accounting. There are no records that could be used to cost these activities with acceptable accuracy.3955(Question No. 565)5653955Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Minister for Trade, upon notice, on 10 March 1999:(1) What has been the total cost to the department in the 1997-98 financial year of legal advice obtained from the Attorney-General's Department.(2) What has been the total cost to the department in the 1997-98 financial year of legal advice obtained by the department from other sources.3955Hill, Sen RobertSenator HillBH4SALPEnvironment and Heritage10—The Minister for Trade has provided the following answer to the honourable senator's question:(1) $504,136.35(2) $134,408.283955(Question No. 571)5713955Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister for Family and Community Services, upon notice, on 9 March 1999:(1) What has been the total cost to the department in the 1997-1998 financial year of legal advice obtained from the Attorney-General's Department.(2) What has been the total cost to the department in the 1997-1998 financial year of legal advice obtained by the department from other sources.3956Newman, Sen JocelynSenator NewmanBE4TASLPFamily and Community Services; Minister Assisting the Prime Minister for the Status of Women10—The answer to the honourable senator's question is as follows:(1) The total cost to the Department in 1997-1998 financial year of legal advice obtained from the Attorney-General's Department was $412,553.00. This figure includes advice sought on behalf of Centrelink for the period 1 July 1997 to 30 November 1997. On 1 December 1997 the Department and Centrelink commenced paying for contractual legal services provided to each, separately.(2) The total cost to the Department in the 1997-1998 financial year of legal advice obtained by the Department from other sources was $210,398.00. This figure includes advice sought on behalf of Centrelink for the period 1 July 1997 to 30 November 1997. On 1 December 1997 the Department and Centrelink commenced paying for contractual legal services provided to each, separately.3956(Question No. 580)5803956Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Minister representing the Minister for Immigration and Multicultural Affairs, upon notice, on 9 March 1999:(1) What has been the total cost to the department in the 1997-98 financial year of legal advice obtained from the Attorney-General's Department.(2) What has been the total cost to the department in the 1997-98 financial year of legal advice obtained by the department from other sources.3956Vanstone, Sen AmandaSenator Vanstone7E4SALPJustice and Customs10—The Minister for Immigration and Multicultural Affairs has provided the following answer to the honourable senator's question:(1) $1,189,234.00.(2) $249,021.453956(Question No. 585)5853956Ray, Sen RobertSenator Robert RayUI4VICALP00 asked the Special Minister of State, upon notice, on 9 March 1999:(1) What is the cost to the department of the compilation, reproduction and distribution of the Ministerial Document Service produced by AusInfo.(2) What is the total circulation of the Ministerial Document Service.3956Ellison, Sen ChrisSenator Ellison9X5WALPSpecial Minister of State10—The answer to the honourable senator's question is as follows:(1) The cost to the department in 1998-99 is expected to be approximately $176,000. Improvements in the efficiency of the production process have led to a reduction in the cost of production by approximately 50% over the past three years, from approximately $350,000 per annum in 1996.(2) Circulation of Press Releases is 520 copies per release.