Mr St CLAIR —My question is addressed to the Deputy Prime Minister and Minister for Transport and Regional Services. How will the government's new tax system and broader business tax reforms benefit regional Australia and small and large communities from Geraldton to Guyra? Are there any alternatives to the government's plans?

Mr ANDERSON (Deputy Prime Minister) —I thank the honourable member for his question. The fact is that the government's tax reforms will provide a major boost to rural and regional Australia. In the first instance, the point has to be made that rural economies of the sort that you have just described are export economies. The essential nature of rural economies is that they are export economies. The first thing that tax reform of the sort that we are talking about does in this country is remove the embedded tax burden on exports—$4½ billion of embedded taxes on exports; $900 million a year for the farm sector alone. I have heard no suggestion from the other side at all that they even understand this problem, let alone have a policy solution for it. None of them have ever exported. Well, they have got in the way of a few exports and got in the way of the jobs of the people who depend upon exports, but they have never grappled with the question of the embedded tax burden on our exports.

Transport costs too are dramatically reduced. In a country like ours, dependent upon exports, massive reductions in transport costs are very important. This is the last year of provisional tax. Hated by small businesses and farmers everywhere, Labor's provisional tax goes. The burden of capital gains tax has already been lifted. What is the alternative? Well, it is Labor's, which in a nutshell is higher taxes and higher costs, particularly in rural and regional areas. Coming to those transport costs, the cost of diesel for heavy transport is slashed by 23c a litre. Costs are further reduced, with all wholesale sales tax going.

Mr Beazley —Farmers do not pay that.

Mr ANDERSON —Of course farmers pay that. He does not understand. It is built into everything they do because they depend on transport. It is called `embedded'. You do not get a concession on wholesale sales tax on your truck.

Mr SPEAKER —The Deputy Prime Minister will address his remarks through the chair.

Mr ANDERSON —Mr Speaker, the Leader of the Opposition does not understand the nature of the tax system that they defend. All excise on rail goes, and GST as a business input on fuel goes as well. By this time next year, provisional tax will be a thing of the past, and capital gains tax reforms are already in place, bringing a new confidence in business and retirement planning in regional Australia.

Let us come back to this alternative for a moment. By default, it is obviously the defence of the existing system. It is the defence of a broken system. We know it is broken because of 1993, when they told us that we could have tax cuts, l-a-w law tax cuts, without increases in any of the other taxes. As soon as they got into power, what happened? They have been harping on about fuel taxes in recent days. What did you do to the fuel excise immediately upon your return? You pushed it 10c up on leaded and 5c on unleaded, with commensurate rises in transport fuel costs. What hypocrisy for you people to talk about fuel costs in rural areas! Look at your record on it. Then we come, of course, to your refusal to ever move on provisional tax. You never even reduced the uplift factor. We had the introduction of capital gains tax, and it grew much more rapidly than even your own figures anticipated. You did not cut it. You certainly did not offer to remove it for small businesses and for farmers in the way that we have recently done.

So where is Labor's solution? They say they have this new-found concern for rural and regional Australia. Where is their solution to the problem of the embedded tax burden on our exports? Where is the leadership on this vitally important issue for rural and regional Australia? It is all about trying to look good on a lazy indulgent surf on a wave of a broken tax system that, firstly, will not boost export competitiveness, secondly, will not help regional jobs and, thirdly, will not meet our future expenditure needs. It will not meet our future expenditure needs unless we keep repeating Labor's 1993 performance—pushing up fuel excise, pushing up wholesale sales tax and pushing up personal tax rates. It is a broken system. That is the only alternative on record, and they keep promoting it.