Ms KERNOT —My question is to the Acting Treasurer. Do you stand by the government's promise that the GST package will cut the price of air travel? How does that promise stack up with yesterday's announcement by Qantas that the GST has forced a 7½ per cent increase in domestic airfares?

Mr FAHEY (Finance and Administration) —I thank the honourable member for her question. When the government released the new tax system package, it indicated that there would be a number of impacts on various industry sectors. One of those sectors was the air and space transport industry, which includes international air travel and the domestic legs of international travel, which, of course, are GST free. It also includes general aviation, domestic and various international transport components, and transport generally. So the amount stated in the tables in respect of the new tax system documents relates to the broad industry. We know, of course, that international air travel will in fact reduce in price as a result of the goods and services tax on the basis of the impacts, provided, of course, that the airlines themselves take up the fact that the GST component is exempt from international air travel.

The two domestic airlines announced yesterday—this is what the honourable member for Dickson is referring to—that there would be a 7½ per cent increase on 1 July next year on domestic air travel. Of course, that is certainly less than 10 per cent. All we ever heard from Labor was `10 per cent on everything.' I also make the point that as a result of the government's new tax package there is a considerable benefit to every Australian in the tax system and a greater affordability of airfares and many other things as well.

I note that some tables that flowed from the announcements that were made yesterday in respect of the airlines increasing their domestic fares by 7½ per cent indicated that business airfares would increase by a certain sum, et cetera. Business class is usually occupied by businessmen, and they of course have a right to a refund on the GST component on any fares that they might pay.

Opposition members interjecting—

Mr SPEAKER —The chair will not tolerate the level of interjection currently coming from opposition benches, and particularly from the member for the Northern Territory. He ought to exercise more restraint.

Mr FAHEY —We acknowledged all along that certain things would have an increase attached to them, including domestic airfares, and we have seen the results of that. I do commend both airlines because they have voluntarily agreed to ensure that they abide by the guidelines that the ACCC has put forward. Of course, if there is any stepping outside of that, it is up to the ACCC to act, as they have been given the authority to do so. I thank the honourable member for her question, and I sincerely hope that that heavy load is not weighing her down too much.