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Tuesday, 24 November 1998
Page: 485

Mr LIEBERMAN —My question is directed to the Treasurer. Will the government's tax reform proposals benefit our farmers and their exports? Would the Treasurer outline what those benefits might be?

Mr COSTELLO (Treasurer) —I thank the honourable member for Indi for his question and for his interest in Australia's farmers. The answer is that the government's tax reform will benefit Australian farmers.

Mr Martin Ferguson —How?

Mr COSTELLO —Well, let me tell you.

Mr SPEAKER —The Treasurer might respond to the question of the member for Indi, not other questions loosely scattered from the frontbench.

Mr COSTELLO —The first thing that our indirect tax changes do is they take every dollar of tax, including all embedded taxes, off exports. That is a $4.5 billion lift to Australia's export industries. At a time when Australia has consistently had pressure on its current account and its balance of payments, what a wonderful idea to take taxes off Australian exports. That can be done under a new indirect tax system.

But that is not the only benefit that the tax reform which Labor opposes will give to Australia's farmers. The tax reform which Labor opposes will also cut the cost of transport to rural and regional Australia. This is a great idea: to reduce the diesel excise from 43c to 18c so that trucking business will be substantially cheaper, and people in rural and regional Australia will be able to get cheaper goods in and cheaper goods out. That is a great thing for rural and regional Australia. In addition to that, the government's changes will also abolish a whole raft of financial taxes that farmers and other exporters pay—for example, financial institutions duty. Labor loves to tax money going in. As I have said before, there are no taxes on financial outputs—none whatsoever.

Mr Crean —No GST?

Mr COSTELLO —No GST on fees in relation to financial outputs. There are no taxes on financial outputs and, better, the government taxes of financial institutions duty and bank accounts debits taxes are abolished—Labor's taxes. In addition to that, Labor's stamp duties and taxes in relation to conveyancing land and businesses are going to be abolished. In relation to shares and other securities to make Australia a great financial centre, those taxes are going to be abolished.

And, best of all for people that are on average incomes, income tax is going to be cut to 30 per cent for 81 per cent of Australians. Isn't that great? A 30 per cent tax rate for 81 per cent of Australians. We want to say to people who Labor wants to tax at 47 cents in the dollar: `We will bring your taxes down to 30 cents in the dollar.' Won't that be a wonderful thing for families?

That is put in the context of an overall economic plan for Australia—a plan to build our export industry, to help rural and regional Australia to develop a financial centre, to give home buyers an opportunity, to keep interest rates low. Can I say on behalf of the government—and I hope this would be shared by the Labor Party too—we think low interest rates are great for home buyers. It is good economic policy that gives low interest rates to home buyers who suffered so dreadfully under the Beazley-Keating 18 per cent home mortgage interest rates. To have six per cent interest rates, I think, is going to be a great thing.

Of course too—and I point this out to home buyers—once you abolish the stamp duty on mortgages, people will be able to swap mortgages without any deterioration in the cost. There will be no stamp duty, so you will be able to shop around for the lowest mortgage provider. This is going to give a lot more competition in relation to the home mortgage industry as well. So, for rural and regional Australia, great benefits on the income tax side, on the export side, on the transport side, on the financial institutions side. This is a plan for the next century, a new tax system. Let's all Australians get behind the government's proposal.

Mr Howard —Mr Speaker, on that quite uplifting note, I ask that further questions be placed on the Notice Paper .