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Tuesday, 4 April 2000
Page: 15176


Mr MOSSFIELD (8:47 PM) —The A New Tax System (Family Assistance and Related Measures) Bill 2000 amends current legislation dealing with the consolidation of family payments under the new tax system. On 1 July, 12 forms of assistance currently provided to families through the social security and tax systems will be replaced by three types of assistance. There are numerous omissions and defects in the original legislation that the government wishes to correct. This legislation also seeks to replace the existing regulations, making powers in respect of the new family payments, with substantive provisions in primary legislation. Consequential and technical amendments are also being made to eight other acts.

As we are all aware, this bill was introduced in this House on 9 March and here we are now debating a bill that is already 300 pages long. It is impossible to properly assess this bill, and on its track record this government will make another 300 pages of amendments to it within three months of the bill passing. Just to give you an indication, the A New Tax System (Family Assistance and Related Measures) Bill 2000 and the explanatory memorandum together comprise, as you can see, a document that is possibly about an inch thick. It would certainly take a considerable time to analyse it and the government, for whatever reason, has not been prepared to give the opposition that courtesy. The government ought to have a major training program to enable it to begin to better manage its legislative agenda. This would allow due consideration of complex legislation such as this and we would not be expected to rush through 300 pages at short notice.

It is indeed a fairly complex bill as, in broad terms, it is amending current legislation to provide the administrative infrastructure to support the payment of child-care benefits, clarify the operation of various aspects of the family assistance law, replace regulations, make powers with substantive provisions by legislation, insert relevant savings and transitional provisions, and make miscellaneous technical amendments. The streamlining of the department's activities may appear to be a good move but, as we have learnt by experience, particularly in the proposed changes to the tax system, such changes lead to enormous confusion among governments and their ministers—and we have seen quite a considerable amount of that—as well as among departments and consumers. What extra resources are to be made available to the department concerned to ensure that consumers' entitlements are not delayed?

This department, now called Centrelink, has lost thousands of valuable and talented employees. The strains and burdens now placed on the remaining staff are enormous. Already my office is experiencing an increase in the number of calls regarding Centrelink problems. These problems are being caused when people who are receiving benefits of various descriptions advise Centrelink of their change of circumstances but the particular payments continue to be paid and not reduced. The clients in many cases are then, at a later date, presented with a bill of over $4,000, which they then have to repay. As the shadow minister advised in his speech, the question of clients having to estimate their income has also caused considerable concern and resulted in people being overpaid and accumulating quite considerable bills.

This amount of money—as I said, from personal experience, I am aware of it being up to $4,000—represents an enormous financial strain on a low income person just re-entering the work force. I believe these problems are being brought about by staff reductions and falling morale among Centrelink staff. Front-counter staff are unable to rotate positions properly and may be able to have only a short tea-break or short lunch-break before they are back at the counter dealing with difficult and frequently distressed customers. They are under an unfair strain that would simply not be tolerated or expected by the minister. This means that there will be mistakes made at the counter or in the input of data from customers. As many members here would know from experience with their constituents, these are indeed common occurrences. I anticipate that, from the operation of the family tax benefit shared-care arrangements in this bill, we are going to have many more visits from disgruntled constituents. Many single mums will see their fortnightly income being dropped to match the days that the kids spent with the non-custodial parent.

Surely it is evident that this change is totally inconsistent with the Child Support (Assessment) Act and could cause severe hardships for single parents. There have been estimates that there could be a loss of as much as $40 per fortnight for each child whose care is shared. I query the issue of `shared care'. Parents seek access to their children. They take them for a day or for a weekend—and rightly so—and there is a cost involved for those carers, but the custodial parent still has the responsibility of the major caring. The parent, man or woman, must maintain a home, beds and clothes for the children and also keep food stocks. One or two days out of the week does not reduce the overall cost of a family, and it appears that there is now to be a penalty imposed on these single carers. Child care and child support are already very tense issues of discontent and anger within the community. As MPs, we are meeting with all sides in family disputes, and all expect us to solve the problems that have sometimes been caused by the Family Court, by the inability of one party to get legal help or by other irritations of a real or imaginary nature. What we do not need at our offices and what families do not want is yet another problem area being created that will cause further unhappiness and bitterness between the custodial and non-custodial carer. The end sufferers are of course the children. Is that what we want? I think not.

On top of these changes, the single parents are yet to come to grips with the GST in all its peculiar forms. The GST is quite bluntly an inherently regressive and unfair tax and will be very difficult for families. This is what this bill is all about. It is allegedly to make life easier for families, but we do not believe that this will occur. The compensation provided by the government to families is inadequate and inequitable. I also want to mention the double whammy effect that we believe the GST will have, particularly on families. I refer to an article in the Sydney Morning Herald of 13 March entitled `Prices build a head of steam—pre-GST'. It says:

A survey of NSW manufacturers has confirmed that prices are under rising pressure in the lead-up to the goods and services tax, as strong demand allows businesses to pass increased costs on to consumers. According to the survey of 464 firms, released yesterday, selling prices are at a 4.5-year high—further evidence that inflation is on the rise, despite continuing moderate wage outcomes.

Here there will be a double whammy effect on families. They will be paying a GST on products, but they will also be paying a GST in the price increase that may well occur prior to 1 July. To reinforce that particular item, I have here a letter from a constituent who is an age pensioner. I will read in part what he has said. This confirms that prices are increasing prior to 1 July. The letter says:

As an Age Pensioner in your constituency of Greenway, I like to hear your opinions regarding the following:

In the Sun-Herald of 13 February 2000 an article appeared: “GST ON THE WAY”. In it the Editor published a list of grocery items purchased in a Coles Store in Broadway, showing the price paid for each item and the to be expected POST GST price. Apparently the compiler of this list was convinced, that prices would not rise between February and end June 2000, prior to the GST.

I doubt this very much: For many years we have been dealing with a milk vendor, who leaves a carton of milk for us at our front door, early in the morning. Every year in August or September, the vendor increased his prices by 2 or 3 cents per carton or per liter. However, this year we found a note with our milk delivery saying that prices were going up as from the 6th of March 2000 and not just by a couple of cents, e.g. the price of a 600 ml carton of milk increases from 84 cents to 95 cents, an increase of 13.1%.

If I have the government's position right, if milk is basic food, I do not know that the GST applies to that particular item. However, here is a clear example of where the GST will not apply to this item but in fact the price of the item has already increased by 13 per cent. It has increased above what the GST rise would be. These are practical examples of where our constituents are complaining about the effects of the GST, and I would certainly rely on their judgment much more than I would rely on the judgment of some of the people who have been quoted on the other side.

This is a debate about the GST. I know some people on the government side do not like us to continue to raise this issue, but it is all tied in with the GST. It is interesting to note the progress in the debate since the time the Prime Minister invited the Australian public to join him in the great adventure. He told us at the time that there was a change in the mood of the community and that people now understood the issue of the GST. It was some time back that he made that particular statement. I think it was incorrect at the time. People did not understand the GST, and in fact they still do not, in spite of what government members might like to think. I would like to refer to a fairly recent article that appeared in the Financial Review by Louise Dodson. It states:

The Federal Government risks an “explosion of anger” in the bush and outer suburbs over the looming impact of the GST, according to polling commissioned by a major motoring organisation. The research by ANOP's Mr Rod Cameron charts attitudes to the GST since 1995 and shows that at the time of the last Federal election in October 1998, the GST was only superficially understood. Since the impending tax has become better known, resentment has, however, risen dramatically.

I think that is a clear indication that the Australian public are starting to realise how damaging this GST will be. Certainly they never ever supported it, but they are now coming out in complete opposition to it. The fact is that the mood in the community is in opposition to the GST. People do not understand the GST. I think we have to say that many ministers do not understand it either—and certainly the minister for financial services falls into that category. Perhaps the community accepts the view of the President of the National Tax and Accountants Association, Mr Ray Regan, who was quoted as saying during the `rounding up rounding down' debate recently, `It is impossible, and the reason is that nobody in the government understands its own legislation.'

The Prime Minister also told us that there would be no overall increase in the tax burden, meaning that it would be revenue neutral. If this is the case—and high income people are already being promised tax cuts—then who is to carry the burden of maintaining government revenue? It will be the average worker, the low paid worker, families, the unemployed, pensioners, charities and the distressed in our community. It is also clear that small businesses would have to spend many hours working on their sums to ensure that they pay the correct GST to the Commissioner of Taxation. This fact has become doubly clear as the debate has progressed. Now when we talk to small businesses—and I talk to many of them in my electorate—we are told that they are concerned about three issues: firstly, being made unpaid tax collectors for the government; secondly, the unproductive time they will spend on their books doing what they do not have to do now; and, thirdly, having to visit their tax accountant each year four times when previously they only had to do so once.

Let us talk about local government charges—and in this debate we can do so because it is about families, and families use local government services. In particular, let us talk about swimming pools and halls. These facilities were built with ratepayers' money; they are maintained with ratepayers' money. But now the government is saying to the public—this is the public who virtually own these facilities through having helped pay for them—that they have to pay a GST on them.

The introduction of the GST is clearly a case of getting the bottom line right, without worrying about the effect on the average citizen. Because of the earlier debate on the GST, the federal government has been forced to come out early with a heavy and expensive $24 million selling campaign. Currently, the Australian public are being told by the government that `the GST is the solution to all our ills'—that it will boost our export industry, stimulate employment, wipe out tax evasion and be a simple replacement for the complicated wholesale sales tax. In fact, we are being told that we will all be better off. This oversell became necessary because of the history of the GST debate in Australia. Firstly, we had the internal debate—as you, Madam Deputy Speaker Crosio, would know better than I—within the ALP where, on balance, we decided that the goods and services tax would create hardships for low income people and that it was a tax system we would not be prepared to introduce. Then we had the Australian people defeat Dr Hewson's Fightbackpackage. And then we had Mr Howard as Leader of the Opposition saying that he would never ever introduce a GST—and then getting into power and introducing one.

With the Australian people being told for a decade by both sides of politics that the GST was not an appropriate tax for Australia, the government then went into the 1998 election with a GST and `tax cuts for high income earners' policy and finished up with 14 seats fewer than it had at the previous election in 1996; in contrast, the ALP gained 18 seats in that election, while over 50 per cent of the Australian people voted against GST candidates in the Senate. I know that the government claims to have a mandate; it is the government. But I believe that, based on the results of the 1998 federal election, the ALP still has a clear mandate to oppose the GST.

I would like to conclude my remarks by quoting from the Mackay report of June 1999 as it refers to the GST. The comments I am about to quote are balanced and a number of them have been made by people who would query some of the positions that we on our side of politics would take, but I think basically they also sum up what I have been saying so far in this speech. Also, some of the comments have been made by members of the general public, and I will endeavour to identify those particular quotes. The Mackay report of June 1999 in part states:

So the two issues which, in 1999, might be expected to arouse considerable passion—the GST and the republic—generated little discussion in this study.

`Let's get the GST over and done with'

Three recurring themes emerged from the rather desultory discussion about the GST:

First, people have generally not understood its nuances or its final impact on their financial position (though they fear the worst);

Second, the complexities of the compromise deal struck with the Democrats only compound the sense of confusion;

Third, it is virtually taken for granted that the total rearrangement of income taxes and consumption taxes will result in increased tax revenue.

The undercurrent of discussion about the GST suggests that people are sick and tired of the subject; resigned to the fact that a GST will be introduced (though their support for the Howard government at the 1998 election did not always imply this); prepared to accept that they will simply adapt to the new tax regime and, given time, learn to live with it.

I will complete my speech with this next quote. (Time expired)