Mr McARTHUR (12:53 PM) —I am delighted to assist in this debate on the A New Tax System (Trade Practices Amendment) Bill 1998 and to add my support for the new system to ensure that the introduction of the government's tax reform measures is carried out in an equitable and sensible way. The amendment to the Trade Practices Act will ensure that those people who are using the goods and services tax, traders and proprietary companies, will do it in a fair and equitable manner, and it will ensure proper monitoring.

Whilst the previous speaker was attacking the tax reform proposals of the government, let me assure him that this measure will ensure that they will be fair and that they will be monitored. In the case of New Zealand, where I had a look at the introduction of that new system, people assured me that the introduction of the goods and services tax had worked well. They wondered why there was a debate back in 1992-93 here in Australia, because they saw the system working very well. We found no evidence in New Zealand that there was any exploitation in the changeover from the former system to the new system of a GST.

This amendment will ensure that all those people who have to implement the new system over the two-year period that is referred to in the bill will be forced to do the right thing. There will be $27 million allocated to cover this period and there will be considerable penalties for those people who do not implement the new reformed taxation system: $10 million for a corporate body and up to $500,000 for a person other than a corporate body if it can be proved that they had misrepresented the GST and its implementation, especially in their pricing mechanism.

From this debate on the introduction of the new tax system—which is how those of us on this side of the House like to refer to it rather than as a GST—we can see that the government have done everything possible to prepare the ground to make sure that the transition from the current system to the new system will be done in a manner that Australians will understand, to make sure that Australians act in a fair manner and that traders and shopkeepers obey the new regime.

The minister at the table would be aware of the Trade Practices Act in relation to other activities in Australia, as he readily acknowledges the case of the newsagents and other people who have enjoyed certain protection. I am confident that the Senate will eventually agree to the introduction of the new system, especially when they see this part of the program which will ensure the smooth transition. It has always been part of their argument—that, when we move from the current arrangements of wholesale sales tax to a new set of arrangements where a new GST will be applied to a number of goods which did not have a tax on them, there was always the possibility that some unscrupulous traders might add more than the 10 per cent in their pricing mechanisms.

The government is quite confident that this measure will assist in the transition and that after that there will be a competitive pressure on people to provide a price that includes the GST, which has happened in every other nation around the world. I notice that the opposition spokesman at the table is showing some scepticism about that. But he has travelled the world and he understands that these indirect tax mechanisms have worked well and the marketplace over time has taken them into account in setting the price.

I suggest that this bill will be part of the government's total position in the transition, making sure that the new tax regime is bedded down and comes into effect, especially in view of the experience of New Zealand, of Europe, and of other nations which have encountered the transitionary arrangements. I commend the bill to the House.