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Thursday, 25 November 1999
Page: 12625

Mr SNOWDON (10:40 AM) —Other contributors from this side of the House to this debate on the A New Tax System (Indirect Tax and Consequential Amendments) Bill (No. 2) 1999 have illustrated, I think quite aptly, the regressive nature of this government's tax and the fact that we are seeing as a result of these amendments increasing not only confusion within the government and its Treasury advisers about how this tax will in fact work when it is implemented after 1 July next year but also confusion upon confusion for those people out in the electorate who do not understand how the GST will be applied and do not understand its implications for them.

And they are becoming further confused by the statements coming from this government. Earlier this week, we heard the Deputy Prime Minister and the Leader of the National Party making comment about petrol prices in the bush. I note what the previous speaker said about the government being put on notice about regional Australia. I have to say that, on the issue of petrol prices, the government will be marked down significantly. While it is true that earlier this week we saw the price of crude oil rise substantially as a result of decisions taken outside of this country, the fact remains that we are going to see, after the implementation of the GST, in some places in regional Australia a substantial increase in the price of fuel for ordinary, everyday Australians.

The government maintains that its GST package will bring lower fuel prices to business, and the implication is that they will flow on to consumers and that consumers will feel the benefit of those lower fuel prices in the prices of goods on the shelf. I think the government is fooling itself. Some years ago I had cause to ask the Bureau of Transport Economics, as it then was, to do some work on the implications for the prices of goods on shelves as a result of the introduction of road user charges. So they did fairly substantial analyses of the unit costs of transporting goods from places like Adelaide to Darwin, which, as you know, Mr Deputy Speaker, is the major urban centre in my electorate. What they were able to show very clearly was that, despite what appeared to be the substantial increase in the dollar amount of the road user charges, its implications in the final prices of the goods on the shelves of Darwin supermarkets was minuscule, a fraction of a cent.

When you look at the total cost of running a road transport operation from a place like Adelaide to a place like Darwin and you take into account all the other factors that are involved in the final price of commodities on the shelves of Darwin supermarkets, you do not have to be Einstein to work out that the reduction in fuel prices for business that this government is crowing about will not bring about substantial cuts in the prices of commodities on the shelves in Darwin.

I think it is about time the government owned up to what the real implications of the GST will be on regional and remote Australia, particularly for those people who live in what I call the bush, which is the whole of the Northern Territory, the north-west of Western Australia, most of North Queensland and the northern part of South Australia—the bulk of the Australian continent. Apart from the seat of the Northern Territory, all of the major bush seats are held by the National Party or the Liberal Party. I do not know what goes on in the Liberal Party party room or the National Party party room, but I suspect that, when it comes to accounting for the dissatisfaction in the bush about the proposed GST, their judgment seems to have been clouded by the sense of power they believe they have because they are in government. Let me say to them that they have been fooled.

I want to give one significant example of how some of the poorest people in Australia will be affected by the increase in fuel prices that will doubtless come about as a result of this GST package. I want to talk about a community in north-eastern Arnhem Land. Minister Vaile is sitting at the table, and he is a person who I think comes from a metropolitan area of the bush, or a small urban area which is probably on the main train line or the main road leading from somewhere to somewhere else. Let me tell you that Ramingining is nothing like that. Ramingining is a community which is a few hundred kilometres to the east of Darwin, and the population is largely Aboriginal people. It is right in the middle of Arnhem Land. It has no highways and no bitumen roads. It has a dirt road which is unusable for a number of months of the year during the wet season.

I am sure the minister will not know the answer to this question, but it is a rhetorical question in any event. Does the minister know the price of petrol at Ramingining? Minister, the current price of petrol at Ramingining is $1.30 per litre. Under the scenario which has been painted for the introduction of the GST, the price of fuel in Ramingining will, by my calculations, increase by 5c a litre. That is, of course, on current prices and does not account for any future rises in the price as a result of any change in the price of crude oil. These people, like others in similar communities around remote Australia, are amongst the lowest income earners of all Australians. They are the most impoverished of all Australians. They pay more for food, clothing, electricity and travel—in fact, they pay more for everything you could possibly imagine. A substantial proportion of this population are, unfortunately, on CDEP which is the equivalent to Newstart. A married couple receives around $600 a fortnight, and if they have children they will of course get a family payment. But they are in substantial ways the most impoverished of all Australians.

I want to bring you back to the statements made earlier this week by Mr Anderson, the Leader of the National Party and Deputy Prime Minister. He was at pains to point out that he thought there would be no need for petrol prices to rise because of the GST. I am not a mathematician, but I am not bloody stupid and neither is the bulk of the Australian population. On 11 September last year, in the lead-up to the election, the then Deputy Prime Minister, Mr Tim Fischer, said:

The petrol price for business usage will come down. Petrol otherwise will neither go up nor down.

Whom are these so-called leaders of the rural communities trying to fool? Do they honestly think that the bulk of those people who live in rural and remote Australia believe them? The facts speak for themselves. They need to admit to those people who live in the bush that their lives will be severely affected by the introduction of this GST.

It is absolutely clear that the price of petrol will rise in remote communities. I have insisted that this will be the case from the outset. But it is not only my view. The Motor Traders Association and the Australian Automobile Association both said this prior to the last election. The President of the Motor Traders Association, Mr Robert Allen, said just days before Mr Fischer's comment in September last year:

In many cases, most notably in rural and regional areas, the amount of GST to be paid on petrol may well exceed the seven cents per litre reduction in fuel excise.

You do not have to be Einstein to work it out. If you take seven cents from $1.30 and add 10 per cent, you have $1.35—up five cents at Ramingining. Mr Allen said that the price of petrol would rise and the gap between city and country petrol prices would widen. He said:

We expect that increase in non-capital city locations to be in excess of one cent per litre and to be compounded and increased as excises rise over time.

Lachlan McIntosh of the Australian Automobile Association—whom I have known for a number of years, and who I would not have said is a great supporter of the Labor Party—said in Darwin in that same week that prices for petrol could rise by two cents per litre in the Northern Territory bush. Lachlan, unfortunately in the case of Ramingining, you are substantially out—by a factor of 120 per cent. He also said:

We are going to see, progressively, higher fuel taxes.

Understand, Mr Deputy Speaker and minister at the table, this is not what I have said. It is certainly not what you have said. It is certainly not what the then Leader of the National Party, Tim Fischer, said. It is certainly not what Mr Anderson, the current Leader of the National Party and now Deputy Prime Minister, said this week, because he fundamentally disagrees with it. But who is right? The fact is that prices will rise in the bush, and that fact speaks for itself. As I said, the simple maths of it make it very clear.

I ask the minister at the table to contemplate the following facts. Currently in Darwin, where we have the lowest fuel prices in the Territory, petrol is 84c a litre. Of course, with the change in crude oil prices, it may well go up further. In Katherine, just down the track—under 400 kilometres; not a long way—fuel is 89.5c a litre. If you happen to be driving through Ti Tree, which is 300 kilometres north of Alice Springs, and you need to fill your car up you will pay

$1.02.5 a litre—and we do well in the bush!—and we will see a substantial increase in the price at Ti Tree as a result of this GST. Who are the people who are going to suffer? These people who live in the bush are not going to get any rebate like the high rollers—not on your nelly. They will pay full tote odds, and they will feel it in the pocket. I have already pointed out that the price of fuel in Ramingining is currently $1.30 a litre, and that is typical of the price of fuel in remote communities. I put an open challenge to the government: why don't you just come out and say that you can guarantee—guarantee in inverted commas, underlined and in bold type—that there will be no increases in fuel prices in the bush? Will you guarantee it, Minister?

Mr Crean —No, he's got his head down.

Mr SNOWDON —No, he is writing an undertaking. He will hand it across to me shortly.

Mr Crean —He was going around during the election campaign guaranteeing it.

Mr SNOWDON —Exactly. This is what these blokes are about. The shadow Treasurer has just come into the House. I pointed out, shadow Treasurer—you are a bit late, unfortunately—what the Deputy Prime Minister said in my own electorate. These people are trying to mislead the Northern Territory community. They are misleading the people in the bush. They are telling us lies, and they have no defence against it.

Through the course of this debate we have already heard about insurance, but let me raise another issue which is important to people who live in regional and remote Australia, and that is the issue of air fares. Let me tell you what it costs for a resident of Ramingining to visit a relative in Melbourne—not Canberra; you do not have to live in the leafy suburbs of Red Hill. I am talking about people who live in the bush. If you live in Ramingining, a return air fare from Ramingining to Darwin is $360 and a return air fare from Darwin to Melbourne is $1,400. As a result of the proposed introduction of the GST, we have seen that Qantas and Ansett will increase the prices of their tickets by seven per cent. So the impact on a single person flying from Ramingining to Melbourne will be $123. Minister, are these Australians going to be worse off as a result of the GST? What other people in the bush are going to be worse off as a result of the GST?

I might also say that that has the potential to have a severely adverse impact on the tourism industry in the Northern Territory. A report by the Tourism Task Force to the Senate in March claimed that 2,000 tourism jobs would be lost in the Territory as a result of the GST. Tourism is a major employer in the Northern Territory. The other major private sector in the Northern Territory that is going to be severely affected by this GST is the construction industry. Already over the last 12 months we have seen a 25 per cent reduction in new housing starts in the Northern Territory. The construction industry is haemorrhaging. As a result of this GST we are going to have a black hole following 1 July next year, and there will be a further haemorrhaging of the construction industry.

The people who are directly responsible for this sit on the Treasury benches of this country. We have the Treasurer waxing lyrical about what he has achieved with the Democrats. What he has achieved with the Democrats is a means to punish ordinary Australians for being ordinary. If you are rich you may do well as a result of this GST. Indeed, if you are a high roller who happens to live in Indonesia, Singapore, the United States, the UK or somewhere else and you come to Australia you will get the benefit of a rebate. You will have given to you the positive benefits of this government's GST. But if you are a resident of Ramingining, Ti Tree, Tennant Creek, Alice Springs, Katherine or Darwin you will get no benefit; all you will get is pain—and that pain is something that this government seems to be proud of. I say to the government: if you believe that somehow or other you can fool the people in the bush, let me just remind you that you can fool some of the people some of the time but you cannot fool them all the time, and the people of the bush will not be fooled by you.

Let me just put this little figure in your mind, Mr Deputy Speaker. Currently, if you are in North-East Arnhem Land and you are buying groceries, if you live in Ramingining or thereabouts, on a given basket of goods nominated by the Northern Territory Department of Health and Family Services, you will pay $614 per fortnight for that basket of goods. If you live in Sydney or in another capital city, the average price across all capitals is $310. In Ramingining you will pay 100 per cent more.

Minister, when you go back to your party room and you tell your National Party colleagues that somehow or other the GST is going to benefit the residents of the bush, especially people on average and low incomes, do you have a straight face? When you tell your party room that people who live in the bush will enjoy a fall in petrol prices, do you have a straight face? (Time expired)

Mr DEPUTY SPEAKER (Mr Jenkins) —Before calling the Deputy Leader of the Opposition, I caution the member for the Northern Territory to be careful about how he puts his remarks through the chair and the use of the second person `you'. I know it was a bit difficult and he was interchanging them along the way. Also, the member should be careful of expressions which in other contexts might have been seen as unparliamentary.