Mr CREAN (3:51 PM) —This is another MPI to deal with the GST and we still have not had the Treasurer turn up in the House to defend his case.

Mr Hockey —He sent me.

Mr CREAN —He sent along the lap-dog. Mr Speaker, this is supposed to be the greatest tax reform of the century and the Treasurer will not come into this place and defend it. What does he have to hide? I will come to what he has to hide in a minute.

This government claimed it was going to introduce a new level of accountability into this parliament. The Prime Minister, in his pride, said that he was going to change the sins of the past and bring in new accountability. When has the government ever come into this place to defend the cacophony of criticism that has been levelled at the GST package? The Treasurer will not attend this place to do it.

Today is the last time the House will sit before the Senate considers the GST package. Unlike this place, the Senate has had the opportunity to fully scrutinise the legislation. Four Senate committees have been looking at it since December—four committees that the Treasurer did not want. He said that the Senate had no right to look at this legislation. Labor proposed one committee and a timetable to allow a vote by the timetable the Treasurer himself had set to enable passage before 30 June this year.

Thanks to the Treasurer's unique negotiating style, he ended up with not one committee but four. He started with none and ended up with four, and yet he rails in this place about obstruction. What a hypocrite. The Treasurer's negotiating style is one of the best weapons Labor has in this debate. For example, we saw him out there trying to be statesmanlike, happy to listen to any of the concerns that Senator Harradine had, and yet we heard him on radio today saying that he has nothing new to offer the senator. I think we should take the transcript of the Treasurer's performance on AM this morning, tie it up in a bow and deliver it to Senator Harradine. I am sure he will be interested. The Treasurer's arrogance knows no bounds. This is a Treasurer who wants you to believe that there are no problems with this package, even though witness after witness has been attesting to them in the committees of the other chamber.

Let us be absolutely clear about Labor's position on this. Labor will be voting against the GST—not for the sake of opposing it but because we have proven that the GST is unfair and that it is a bad tax for the economy. They were the tests that we set for ourselves when we called for the inquiries, when we called for the analysis, when we called for the rigorous examination that the government was not prepared to allow this place to undertake before it went to the last election on this package.

We will be voting against the GST because of that unfairness and because the GST is bad for the economy. We will use every argument and every tactic to try to defeat this tax, because the truth is that it is a tax that cannot be made fair. Labor will be seeking to ensure that the other people who vote on this package vote with us, based on the arguments that have been put to the committees. Labor will not be countenancing any amendments to the GST bill, with one exception: an amendment that we will be seeking to move to ensure that, if the bill gets up, if the GST gets in, the detail of that tax will be disclosed on every receipt that every consumer receives.

To demonstrate again the hypocrisy of this government, it argued the need to abolish the wholesale sales tax because it was a hidden tax. But now that government wants to introduce a new $30 billion tax and keep it hidden. What sheer hypocrisy. We will be seeking to move the amendment to expose that very hypocrisy. That issue aside, Labor will not be supporting amendments to the GST bill. The inquiries that the Treasurer has fought so hard to avoid have produced truckloads of hard evidence to back the claim that this is a bad tax. But the government, despite all this evidence, has yet to move from its starting point of baseless assertion and, to use Professor Dixon's term, lightweight rhetoric.

The government says that we have produced no evidence, but the real fact is that the government has been able to produce nothing to back its assertions that the GST will be good for Australians. For example, the Treasury has done no modelling on the impact of the GST on jobs. The greatest tax reform of the century, and yet they have not even bothered to think about whether or not it will cost jobs. On Monday, I participated in a forum run by the Australian Industry Group, and Reserve Bank board member Dick Warburton, who was speaking on the same panel as I was, was asked what he thought of the fact that there was no employment modelling. His response was a simple shrug. He had no idea why this government had not used the resources of the department to back its claim—resources that it is capable of mustering, and modelling that that department is capable of doing or contracting out. He was at a loss to explain why such modelling had not occurred.

Why was the modelling not done? If the assertion is being made that this tax will increase jobs, why not produce the evidence to back that claim—unless, of course, that claim cannot be backed by the evidence? That is our assertion. How can a government which moralises about transparency and budget honesty produce a package like this with so little scrutiny?

Let us go through what the Senate inquiry process has found. It has found that the government hid the details of the package from the people and misinformed them in its extravagant advertising. It has found that the government failed to tell us that the first year inflation impact was at least 3.1 per cent and not, as it continues to claim, 1.9 per cent. The government continues to argue that the inflation effect is 1.9 per cent when the Treasury has said that it starts at 3.1 per cent—starts, I emphasise, because even that assumes a 100 per cent pass-on of all the taxes being abolished by the states in return for them getting the GST revenues if the government gets it up. Not one witness who has appeared before the Senate inquiry believes that assumption to be correct. Not one piece of evidence has been produced by this government to demonstrate a 100 per cent pass-through, but there has been a wealth of evidence to show that that full pass-through will not happen.

By the time this inquiry is finished, the inflation impact will be not 1.9 per cent but between four and five per cent. Inflation going up means interest rates going up, and we have fought too long and hard to get inflation down in a sustained way to underpin the low interest rates to let this mob muck it up, and that is what they will do. An inflation rate of four to five per cent has implications for interest rates, but importantly it also has implications for the compensation package. If the compensation is based on a 1.9 per cent inflation rate when in fact it is close to five per cent, they have got huge compensation to make up.

The government have also failed to tell us that their assertions of more jobs and growth were not backed up by Treasury analysis—no analysis. That is the point I have made. Yet evidence given by Professor Dixon before the Senate inquiry shows that up to 120,000 jobs will be lost in the short run, assuming workers secure higher wages as compensation for the rising prices. Again, that is the significance of the inflation impact being not 1.9 per cent but closer to five per cent. Up to 120,000 jobs could be lost.

As to the assertion that this is a package that creates jobs, Professor Dixon says that any jobs created in the early years will be due entirely to the fiscal stimulus. It will be nothing to do with their GST, but entirely due to the fiscal stimulus. Of course, the obvious should be apparent to this mob—that you can have a fiscal stimulus without a GST. If you want jobs growth, look to other mechanisms by which you can achieve it. Professor Dixon's modelling says that any economic efficiency gains from the tax package will be negligible and that the package will cause a small decline in average Australian living standards. Great tax this—120,000 jobs gone, no economic efficiency gains, a small decline in average Australian living standards.

Mr Hockey —What about the narrow tax base?

Mr CREAN —He asks about the narrow tax base. Let me go on to say what Professor Dixon says about the tax base under us and you:

The existing tax system—

that is the existing one, ours—

will collect revenue faster than growth in GDP, so the need for a GST to meet Australia's future revenue needs has not been proven by the government.

Those are not our words but Professor Dixon's. Let me also make the point that under their package, even under their modelling, the growth from the GST in the third year is projected to be only 2.7 per cent. That is less than GDP growth. The only way you can get the revenue base up is to increase the GST, and that proves the falsity of your argument that you have got a lock-in mechanism that will prevent the tax from going up.

I have demonstrated in this place before—I hold it up again—how simple it is to introduce legislation in this place to undo that lock-in mechanism. With four bills and four lines you can undo the lock-in mechanism. This is a farce. The government intends, having introduced this tax, to whack it up at the earliest opportunity.

Let me go again to this question of compensation. The government have failed to provide pensioners with any real compensation beyond that which they would have got anyway. As Geoff Carmody has shown, the government's four per cent pension top-up is likely to be eroded away to zero. The reason that happens is that they come into this place and continue to talk about the 1½ per cent above CPI. It is true that up-front there will be a four per cent increase in the pension and that will have the effect, in the initial circumstances, of lifting the pension. But the problem is, as this graph will demonstrate, that that increase will be eroded in a short space of time. Why? Because pensions, under legislation, are not linked to the CPI in this country; they are linked to male total average weekly earnings. Male total average weekly earnings—indeed, average weekly earnings—are projected by this government in its mid-year review to grow by six per cent. The inflationary effect and the 1½ per cent on top of it will be eaten away in a relatively short space of time.

Therefore, the compensation to pensioners is an illusion, because it will be eroded away. It is simply offering them that which they would have been entitled to anyway by a formula that we developed and that the government have continued. That is the truth of it. Pensioners are going to get dudded by this mechanism. Let this government come in and explain how that is not happening. We have asked questions persistently of the relevant ministers to do with this and they consistently avoid it, because they know that we are right.

Again I make the point: if pensioners are being dudded to the tune of a billion dollars, what are other people being dudded to the tune of? If the government get their GST package up—we will do everything to stop it, tactically and by argument—the extra compensation needed is going to be horrendous. And it is the extra compensation for pensioners that underscores that point. We have already asked the minister today whether housing compensation needs to go up in terms of the relationship with the states. Let us see how much more compensation is needed.

This is an unfair tax. The fact that you have got to give compensation underscores the point it is unfair. The only issue is how unfair. What you have done is try to deny that information to the Australian people. (Time expired)