Mr HOCKEY (Financial Services and Regulation) (4:06 AM) —Yabberty yabber. I feel like Rex Hunt. I have landed one. The member for Hotham is like a newly landed bream. It is flapping around at a great pace. It starts off that way when the tax package is introduced and gradually, as the oxygen starts to fill its gills, we come across less life, less life, less life to the point where only a few of his colleagues bother to turn up for the great king hit on the taxation compensation package. Maybe that is an indication of his lack of support in caucus.

It should not be too long before we can anticipate some movement in the caucus ranks as the New South Wales Right and the Victorian Right start to have an arm wrestle about the power positions in the Labor Party. We all know that the Victorian Right has started pulling the strings in federal Labor—with the hands of Senator Ray and Senator Conroy and, of course, the member for Hotham, everyone on the front bench seems to have their own Victorian Right puppeteer. And here is a covert to the Victorian Right.

Mr Tanner —Mr Deputy Speaker, I raise a point of order. The minister has strayed onto matters that have got absolutely nothing to do with the subject of the MPI, and I urge you to call him back to the question.

Mr DEPUTY SPEAKER (Mr Nehl) —I thank the honourable member. The minister is being relevant because the subject of this MPI is very broad, and I know he will continue to speak to the terms of it.

Mr Tanner —How are internal Labor Party matters related to this?

Mr HOCKEY —They are matters relevant to the level of opposition to the GST. We urge you to heed the advice of John Della Bosca. I imagine that over the next few months we will see some terrific brawls in the Labor Party during this great arm wrestle over the GST, this great arm wrestle about the voting of the Labor Party in the Senate and their voting pattern in relation to all significant bills of the government, whether we have a mandate or whether we wish we had a mandate. The opposition of the Labor Party will be unchanged. It is very revealing that we have seen an outbreak by the Labor Party over the last few months in relation to the levels of support for the GST. The Premier of New South Wales, the much lauded—only on one side of the House—Premier Bob Carr said on ABC Stateline on 9 October 1998:

My view is that a government with a majority in any lower House ought to be able to implement its program, not subject to frustration by upper house—state or federal—and be judged by the people three or four years down the track.

And we heard a chorus of complaints from the opposition that that is a state matter. Well, let us go federal.

Mr Tanner interjecting—

Mr HOCKEY —Neil O'Keefe, the member for Burke, in the Age of 26 March 1999, only a few days ago, said:

It is 14 years since a consumption tax was first seriously proposed by the federal Treasurer in 1985.

The federal Treasurer was Labor at the time.

Australia doesn't not for much longer have the luxury of this sort of procrastination in major policy and infrastructure decisions . . .

That was the member for Burke. But he is in good company. Previously unrevealed to the House, on 28 January 1999 on 5AN Labor Senator Chris Schacht said:

If you don't like the government, what it's doing, you vote it out at the next election. But once you vote them in, you give them a chance to carry out their mandate.

Mr Tanner —But you haven't got one.

Mr HOCKEY —That was Senator Chris Schacht. So we have had Bob Carr, John Della Bosca, Neil O'Keefe and Chris Schacht; let's go for the final one, the big bang, King Kahuna, the Leader of the Opposition, Kim Beazley in the Courier-Mail of 26 August 1997. He said:

If John Howard goes to the next election with a clearly and honestly described GST tax proposal and he wins the election—

and we won, that is why we are on this side of the House—

Labor will regard that as a mandate and not seek to block the introduction of the GST.

That was the Leader of the Opposition, Kim Beazley.

Mr Bartlett —Black and white.

Mr HOCKEY —Black and white; pretty clear; no arguments. So what is the argument? Is the argument that the tax base is broken? We on this side of the House say it is. On this side of the House we say that you cannot continue to run a Ferrari-like economy on a dirt-road-type taxation system. That is what we say on this side of the House. The beauty is that some people on the other side of the House are saying exactly the same thing. In Hansard on 9 December 1998 the member for Werriwa said:

The Australian tax base is broken . . .

There is nothing equivocal about that; it is pretty clear—six pretty clear words saying, `The Australian tax base is broken.' And he repeated it on 9 December. He said:

It is simply not possible to defend the current tax system on the basis of its progressivity.

He is in good company. John Dawkins, former Labor Treasurer, now vigneron in South Australia—

Mr Tanner interjecting—

Mr HOCKEY —He should be happy with our WET tax proposals.

Mr Tanner interjecting—

Mr HOCKEY —On 17 August 1993, he said:

. . . rates of excise on petroleum products and tobacco will be progressively increased . . . wholesale sales tax will be increased in two stages over the next two years.

That confirms exactly my interjection to the shadow Treasurer a little earlier.

Mr Tanner interjecting—

Mr HOCKEY —In that interjection I pointed out to the shadow Treasurer that what he does not realise is that the tax base of the Commonwealth and the states is deteriorating. The revenue base of Australia is deteriorating, and that is precisely why the states have begun to introduce heinous and onerous taxes like gambling taxes—

Mr Bartlett —And tobacco taxes.

Mr HOCKEY —And further tobacco taxes, and increasing new land tax and a bed tax in New South Wales. They have been plugging the holes of their revenue base precisely because they have only one growth tax—payroll tax. That is the only growth tax of the states. Financial institutions duty, debits tax, stamp duty on the transfer of shares—they are all narrowing bases.

Mr Tanner interjecting—

Mr DEPUTY SPEAKER —Order! The minister will resume his seat. The member for Melbourne has had a pretty fair go, but the tolerance of the chair is beginning to wear thin. The honourable minister.

Mr HOCKEY —I repeat: state based taxes, such as FID, debits tax, land tax—unless you start to expand the base by taxing more and more people's homes—and stamp duty on the transfer of shares are all narrowing taxes, and that is why the states have come up with gambling taxes and why they have extended land tax to the family home. That is why they keep looking for new sources of revenue, new heinous forms of revenue that directly attack productivity. That is why the states are looking for those heinous new taxes.

We are saying that the best form of taxation that you can have is one with as broad a base as possible. There is a fundamental difference in the attitude between the Labor Party and the coalition, and it is this: on this side of the House, we do not try to paper over the cracks. We do not try to plug the holes on a leaking ship with cork; we try to rebuild the leaking ship. In this case, we have put to the Australian people an entire package, and it is a package that includes fair and proper compensation. So, for those people who may be most affected by the implementation of a new tax, we have put in place fair and adequate compensation. It is the first time that has happened, as all of us on this side of the House and all the Australian people know.

When the Labor Party was in government, what was the compensation package for the introduction of FBT? What was the compensation package for the introduction of the capital gains tax? What was the compensation package for the increase in wholesale sales tax from 10 per cent to 12 per cent, from 20 per cent to 22 per cent, from 30 per cent to 32 per cent and so on? What was the compensation package to Australians for the l-a-w tax cuts that were never introduced and the tax hikes that actually followed? There was no compensation. These hypocrites come into this House and lecture us about compensation, yet their entire political history, not just over 13 years, is that they have never once delivered compensation for their tax increases.

In this case, we are trying to rearrange the tax base of Australia so that we actually give growth revenue to the states so that they can allocate it to the areas of growth expenditure such as hospitals, schools, police and roads. That is what we are doing. We are trying to put a structural framework in place that ensures that Australia can maintain its miracle economy not for a year, not for two years, but for a decade and beyond. That is what we are doing.

Our time frame is beyond the next election, and it always has been. That is a fundamental difference between the Labor Party and us. We try to go beyond the next election. We try to look beyond our own political success and look forward to what is in the best interests of the people of Australia. That is why we went to the last election with an entire tax package. That is why we went to the last election promising to sell Telstra in the best interests of the Australian people.

The Deputy Editor of the Economist from London came to this building last night and said that the three biggest impediments to our continuing—in his words—as the miracle economy of the world are: opposition to taxation reform, opposition to privatisation and opposition to industrial relations reform. I was particularly pleased that there were a number of Labor Party members there who heard the independent analyst from London give an opinion about the Australian economy.

In that circumstance, it is quite clear that, if the opposition really do believe for a split second in doing something for the country, for the next generation, for the productivity of Australia and for jobs in Australia, they will stop opposing for opposition's sake. They will stop being obstructionist on everything. I know through my portfolio that members of the Labor Party go into the boardrooms of Sydney, Melbourne, Brisbane, Adelaide, Perth and Hobart, for all I know, and Canberra saying, `We believe the tax package will go through. Yes, we really support increased productivity. We support tax reform. We support industrial relations reform, and we really do support the sale of Telstra,' and then they walk into the Senate and vote against it at every single point.

Mr Tanner interjecting—

Mr HOCKEY —Do you want me to name them? Do you want me to name your colleagues? I will save you the embarrassment.

Mr DEPUTY SPEAKER (Mr Nehl) —Order! Minister, I do not need you to name anybody. You will address your remarks through the chair, and the member for Melbourne will remain silent.

Mr HOCKEY —I am happy to name them, but I am happy to save the member for Melbourne the embarrassment of walking into caucus and being belted up by his friends in the Victorian Right who are doing it. If he keeps pushing me to do it, I am happy to do it.

Under those circumstances, I can say this: we believe that the compensation package is appropriate and fair. We believe it is fair because we have had a look at the tax that we are proposing to introduce. We have had a look at the $13 billion of income tax cuts that are part of the package. We have had a look at the $3½ billion in cuts to diesel fuel. We have had a look at the $10 billion in cuts on the tax of exports. We have had a main assessment done of the number of opportunities for people to make money as a result of our tax package and the creation of wealth amongst the poorer people in Australia, and we have said, `Here is a compensation package.' This is the first time that a government has said that it is a package. The Australian people support it, and you should too. (Time expired)