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Wednesday, 11 November 1998
Page: 134


Mr CREAN (3:49 PM) —We have just heard from the Treasurer, who was hidden during the election and who has been running like mad ever since. He is a Treasurer who cannot quite make up his mind whether he really wants a GST. If it goes down, it is John Howard's fault; if it gets up, it is to the Treasurer's credit.

Have you watched him, Mr Deputy Speaker? Did you see how he positioned himself during the election campaign? In the campaign, Niki Savva teed up all those media interviews for him. There was a constant theme: he was the man who could not lose. He was the man who would be opposition leader if Labor won or the man who would be leader in waiting if the government won. Do you remember those interviews? Well done, Niki! But it did not impress his backbench colleagues, and that is why some 19 of his colleagues are not here now.

This government went to an election advocating their strategy, their vision for the nation over the next three years, as being what? They advocated a new tax—not a commitment to employment, not a commitment to economic growth. There was no clue about what was happening in the Asian economy. The Treasurer was saying things like, `It is a passing phase; it won't last long.' We had the crisis happening around us, but he was out there trying to pretend it was not happening.

Mr Deputy Speaker, this was not his first gaffe. What about when he divulged the secret dealings with Alan Greenspan which echoed around the world? This is a Treasurer with no measure and with no vision.

The truth of the matter is that this GST is an unfair tax, and that is why we are opposed to it. Try as you might, you cannot make it fair. The reason for that is it is a regressive tax. It applies the same rate to everything that people purchase, regardless of their income. On our side of the House we know that those people with different incomes and different households have different expenditure patterns. We know that poor people in the community spend more on housing than rich people. We know that poor people spend more on fuel and power as a proportion of their income than rich people. They spend more on food, they spend more on clothing and they spend more on medical care.

As a proportion of their income—and understand this too about poor people and middle income people—they do not save. Everything they earn they spend. And some dissave. They have to find, scratch for and grab every means by which they are actually spending more than they earn. So changing a taxation base from income to expenditure is unfair, because it broadens the base or hits the same base—it is no different. That is the case if you assume that they only spend what they earn. If they spend more than they earn, you are taxing then on a wider base.

The second thing it does is tax them at a flat rate, regardless of the level of the income. That is why a GST is unfair. It is also the case that the GST will make no exemptions. Everything will be taxed. Under the system that we had in place, we did have indirect taxes. But there were different rates for those indirect taxes and we excluded the necessities of life. We were not in there taxing basic food, clothing, most building materials and basic services such as electricity, because we know that taxing the necessities of life hits the lower and middle income earners harder.

This is the point that this government is only beginning to get the message about. It is the reason it lost the seats it did in the last election. It is the reason why it is here with a 12-seat majority but only by 3,500 votes across this nation. This is a government that might have been able to scrape in defending a GST in this election but will not win a second election on it, because people will come to understand how unfair it is.

We know it, because we went through this exercise in 1985. We were prepared to look at a broadbased consumption tax in 1985, and we ruled it out. But we still got taxation reform. We still fundamentally reformed the taxation system in 1985. How? By changing the approach to direct taxation. We introduced a withholding tax. We introduced the fringe benefits tax. We introduced the capital gains tax. And we actually made the point that it was unfair that people who were in a position to convert income into capital could avoid taxation. So we do believe in making the system fairer, but you will not make it fairer by the introduction of a GST. And that is what we want to demonstrate. Significantly, we made an important demonstration of that effect in the last election. Of course, we didn't win—


Mr Slipper —You lost.


Mr CREAN —But we got 51½ per cent of the vote in an election that your Prime Minister said was a referendum on the GST. I heard the Treasurer the other day saying that the people have spoken on the GST. Eight million people voted. The trouble is that more than four million voted against it, you fool. Don't you understand the message that is coming at you?

The other point is that we want to demonstrate how you cannot make this tax fair. And that is why we want the inquiry process through the parliament. This government has sought to avoid scrutiny at every turn. Since last week the Treasurer has been crowing about the documentation that has been tabled today. And what does he do? He slips it in two-thirds of the way down question time. It is a package which, until now, people have said contained 11 documents. Well, I had a quick look at the table of reference, and there are 12. But the truth of it is that if you read the Sydney Morning Herald today Mr Cleary's article says that there are in fact 17 documents. Hence my question to the Treasurer: will he release all of the documents? Do you remember that he would not answer? That is what we want from him. This is a person that must make full disclosure, because full disclosure was not made during the election campaign.

It is not only the Treasurer seeking to position himself for leadership of the party, whenever that might come, who withheld information during the election campaign; it was also the Prime Minister. Again in question time today in my question I reminded the Prime Minister of his quotes:

We were up-front, we were open, we were honest, we didn't hide anything.

But Mr Vos was appointed by the Prime Minister to do a 17-day inquiry into the GST and report by Friday of this week—and everyone ridiculed it as being inadequate timing, including Mr Vos himself. Mr Vos today said:

Not all of the policy of the government has been revealed.

Here you have the Prime Minister saying, `I am Honest John. I've been open. I've put everything out there.' The fact of the matter is that they have not. This is a government that will try and avoid scrutiny, but we will make sure they get that scrutiny. That is why we will persist with the inquiry process.

This cocky Treasurer, who was here earlier, has already had to back down three times. The few people on the government side who remain in the House—there are two that I can count—ought to take this into account. When is he going to realise that he cannot win this argument and avoid the inquiry? We said that the business tax review needed more time for consideration. Costello says, `No, finish in time.' Two weeks ago, they gave it a three-month extension. That was the first back down. Then he says, `We are not going to release the household expenditure survey.' Last week he says, `We will release it.' But what we appear to have is the sanitised version—something like five documents at least missing.

We have also had the Treasurer today trying to say that Labor, when it was a government, did not rely upon the household expenditure survey. That is absolute rubbish. We used the household expenditure survey in 1985 in our modelling to demonstrate the unfairness because of the impact on different households. I was part of the tax summit, and I know. It is also true that in those days in 1992 Treasury used the household expenditure survey to attack Fightback. The criticism that Mr Dawkins levelled at the opposition's package was the extent to which they tried to dissect the household expenditure survey into two smaller groups, such that it became irrelevant. Dawkins was not saying there was no relevance for the household expenditure survey. We want an inquiry, and we will persist until we get it. (Time expired)