Mr CREAN —My question is to the Treasurer. In light of the Deputy Prime Minister's last answer, has your mid-year review factored in a reduction in fuel excise of greater than 7c per litre?

Mr COSTELLO (Treasurer) —The answer that the minister gave, which is entirely correct, is that the excise arrangements will be struck on the price of petrol at the time that we strike them. The amount will come off the excise—

Mr Martin —How else can you do it?

Opposition members interjecting—

Mr COSTELLO —I suppose we should strike at a price other than when we strike it, should we? These economic geniuses, Mr Speaker! I suppose we should strike it on last year's price, should we? Or maybe we should strike it on next year's price. The economic genii of the Labor Party think it is very funny to strike it on the price on the date on which you strike it. And, of course, on the date on which you strike it, you will strike it a price so that the excise reduces and the 10 per cent means that prices need not rise. I make that point.

Of course, another factor to be thought of by the economic genii of the Labor Party is that the higher the price, the more the reduction in the excise would have to be and the higher the 10 per cent GST would be. In fact, when you equalise out the tax arrangements, you get the same amount of revenue anyway. The excise comes down and the 10 per cent goes back up. It is the same amount of tax. It just depends on whether you are taking it in a form of excise or whether you are taking it in the form of GST.

We have these questions here every day. We had them from the member for Lilley about grants. What is going to happen with these grants? The fact of the matter is that a council that has registered for GST, which pays 10 per cent, will get it all back—the full input tax credits.

Mr Crean —On a point of order, Mr Speaker, the question was: has he factored in a reduction of fuel excise of greater than 7c per litre in his mid-year review? He says he agrees with the Deputy Prime Minister. Has he factored it in?

Mr SPEAKER —The Deputy Leader of the Opposition will resume his seat. He has made his point of order.

Mr COSTELLO —We factored it in on both sides. We factored in the excise reduction and the GST take. As I said before, if you reduce the excise and apply a 10 per cent GST to equalise the price, the revenue is actually the same.

Let me make a point: excise is a tax; GST is a tax. Whether it is called excise or whether it is called GST, it remains the same. The frightening possibility—it may just be a frightening possibility—is that, possibly since 1985 when the Labor Party last supported value added tax, they have been campaigning against something they have not understood. It is quite possible that since 1985 they have been campaigning against something they have not understood. Mr Speaker, 150 countries in the world can do tax reform. They can do it in Germany, France, Britain, New Zealand, Japan and Singapore, but Australian Labor cannot make the cut.

Mr Beazley —Great answer, Pete.

Mr Costello interjecting—

Mr Snowdon interjecting—

Mr SPEAKER —I warn the member for the Northern Territory!

Opposition members interjecting—

Mr Downer interjecting—

Mr SPEAKER —I warn the Minister for Foreign Affairs. I indicate to the parliament that by any measure I have been an occupier of the chair reluctant to remove people from the parliament. Why? Because 148 of us—

Mr O'Keefe interjecting—

Mr SPEAKER —I warn the member for Burke! Why? Because 148 of us have been elected here by people to represent them, and to be obliged to leave the parliament has to be the ultimate indignity. I will, however, exercise the authority vested in me if I must, and if I do so it will be because people have asked that they be able to leave the parliament by reason of their behaviour.