Mr TANNER (9:34 AM) —The opposition will not be opposing the Appropriation (Supplementary Measures) Bill (No. 1) 1999 as amended and, in fact, is pleased to see that the government has accepted its amendment from the Senate.

This bill is designed to implement various aspects of the dirty deal done between the government and the Democrats with respect to the GST package, particularly regarding assistance for the book industry, and also to salve the conscience of the Democrats with respect to their outrageous betrayal of the people involved in that industry, they having promised never, ever to put a GST on books or to support a GST on books. It is also to salve the Democrats' conscience with respect to the massive reduction in the excise on diesel fuel, which, of course, has substantial negative environmental consequences, particularly for people living in electorates like mine in urban areas that already have to put up with very substantial health problems as a result of particulate pollution and other associated matters. So this is basically about implementing the deal that the Democrats did with the government.

Labor pursued amendments to the bill, which was totally open-ended in its original form. It in fact had a clause which would have allowed the government to hand over money to any organisation without terms and conditions as to how that money could be used. So in its original form, when the bill went to the Senate, it actually had clauses which gave the government carte blanche to provide money to anybody without terms and conditions and without any effective capacity for proper accountability. Fortunately, the government has seen the wisdom of the Labor Party's amendment and has agreed to delete the relevant sections of the bill that otherwise would have permitted it to simply hand out money without any conditions at all. That in effect would have opened up the possibility of a slush fund that could have been used for pork-barrelling purposes along the lines of the infamous Federation Fund.

In those circumstances, had that occurred, the elements of accountability that do exist with respect to the Federation Fund—limited and difficult though they may be—would not have been in place with respect to this particular program. Audit would have been virtually impossible, in the way that we understand it.

The other issue worth noting in the context of this legislation is the impact on the disappearing surplus. We have seen a steady flow of measures over the past six to 12 months that are bit by bit eroding the surplus. Some of them are entirely reasonable measures that the opposition supports; some of them are avoidable; some of them are measures that the opposition does not support. Nonetheless, there is an emerging issue here that the government will have to give serious consideration to.

We have seen the GST deal with the Democrats lead to a projected erosion of the surplus of a maximum of $2.2 billion in one financial year—from memory, 2001-02. Similarly, the first tranche of measures arising from the Ralph business tax reforms will cost a maximum of $1.5 billion—in the same financial year, from memory. If the government squibs on the second round of reforms, that will effectively be a permanent additional slice off the surplus.

We are all aware of the impact that the commitment to East Timor—a commitment which the opposition wholeheartedly supports—will have on the surplus, and we are aware of the difficulty that we have in estimating precisely what that impact will be and, indeed, how long it will be for. There are a number of other smaller measures that have been introduced in more recent times—including matters regarding illegal immigration, the lamb assistance package and the like—which are chipping away bit by bit at the surplus. There is considerable pressure in many quarters for increases in defence spending, arising from the commitment in East Timor.

On top of this we have the Deputy Prime Minister saying only recently that we should spend the surplus on infrastructure. I happen to agree with his concern about the need for infrastructure in regional Australia; but he is forgetting that the surplus is already being spent and that you cannot spend it twice. The underlying cause is that the government is handing out $8 billion per year in net terms to sweeten the GST package, in big tax cuts to high income earners. It is robbing the poor to pay the rich. I believe that by 2001-02 there will be a negligible surplus or that we may even be in deficit. (Time expired)