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Wednesday, 21 June 2000
Page: 17885

Ms GAMBARO (4:10 PM) —What an extraordinary speech given by the member for Lalor. I thank the member for Lalor so much for offering to buy me a CD of Cry Me a River. I suggest that you leave it until 1 July, because CDs at the moment are on 22 per cent and they will come down in price after 1 July—and CD players as well. So, as you can see, it will be much cheaper for you if you leave it until 1 July. I have listened to the previous speakers on the opposition side and I have been absolutely amazed. Earlier on, the member for Hotham gave a speech in which he did not mention the word `families' once. The MPI today—the very reason that we are here—is to discuss:

The adverse economic effects on Australian families and households caused by prices for everyday goods and services rising by more than the government said they would because of their GST.

Can I just point out—

Mr Rudd —Happy campers in caravan parks.

Ms GAMBARO —The member for Griffith interrupts, as he always does when he does not like to hear good news. There is a lot of good news coming. You people on the other side should be a bit more optimistic about this package because it brings some really great benefits for Australian families. That is what I am going to talk about today. There will be personal tax cuts of $12 billion. I know you do not mention tax cuts very often because it is a good news story. You ignore tax cuts. You ignore the fact that 80 per cent of Australians will have to pay only 30 cents in the dollar. When you look at other OECD countries, we still have the highest tax rates in the OECD world, and I think that there is room for improvement even further with tax cuts.

Mr Tanner —Are you serious?

Ms GAMBARO —I am absolutely serious, because I have some tax scales here—

Mr Tanner —Have you seen the rates for Scandinavian countries?

Ms GAMBARO —I will give you the example of the United States.

Mr Tanner —Give us Sweden, Norway and Germany.

Ms GAMBARO —I know I mentioned the OECD, but in the United States we are looking at tax scales, between $US25,750 and $US62,450, of 28 per cent. So we have got a long way to go there. I want to touch on some of the good news as well that will occur on 1 July. There will be $2.4 billion a year for over two million Australians. There will be an extra $140 a year for each dependent child and there will be more than $350 a year for single income families with children under the age of five. The assets test for family allowance has been removed, pensions and allowances—and there are a lot of Australian families who are receiving pensions—will go up four per cent on 1 July, and rent assistance will go up seven per cent as well. The member for Lalor was mentioning the fact that she was not much of an economist. I am an economist, I was formally trained, and your very interesting summation of the economic impacts were absolutely amazing when you were talking about the economy. I just found it absolutely extraordinary.

Mr DEPUTY SPEAKER (Mr Jenkins)—Order! The honourable member for Melboune!

Ms GAMBARO —The member for Melbourne keeps interrupting and interjecting when he does not like to hear good news.

Mr Tanner —I want to hear about your degree.

Mr DEPUTY SPEAKER —Order! The honourable member for Melbourne will cease interjecting.

Ms GAMBARO —I got it from a very reputable place, I can assure you.

Mr DEPUTY SPEAKER —The honourable member for Petrie will ignore the interjections. The interjections will cease and the honourable member will address her remarks through the chair.

Ms GAMBARO —Another of the great economic impacts of this package is that exports and the cost of exporting goods and services will be reduced by $3.5 billion. For the member opposite, that will mean that it will provide greater job opportunities for Australians. Let me put it in a very simple context. A local supermarket owner told me the other day that when sales tax is abolished he will not be paying $30,000 a year in sales tax. In economic terms, that means that he can put on one extra staff member or maybe two part-timers—for the member for Lalor. When we are talking about economics, that is a very good economic impact. If the system is freed up for businesses to be rid of things like provisional tax and to get rid of wholesale sales tax and sales tax, that will free up their costs and enable them to employ more people. That is a very positive economic impact for families.

I would like to speak about some other positive impacts for families, including the fact that car prices will go down. Most families have to purchase a car every number of years, and car prices will drop by $2,000, according to some of the articles I have here and various modelling that has been produced. The Minister for Financial Services and Regulation spoke about the effects of computers going down in price. Most households in Australia—in fact 3.4 million households—have a computer. I know that they are used in a very valuable way by students and that they will be the tools of the future. They will drop in price by 10 or 11 per cent.

I have a young family, and not so long ago I went shopping. It is okay for the member for Hotham to come in here and talk about clothing and very odd items that are purchased irregularly, but fresh fruit and food products that you buy every single week will be GST free. In addition, things like detergents will go down in price. Detergents have 22 per cent wholesale sales tax on them at the moment, as do disinfectants, dishwashing liquid, fabric softener, nappy wash, liquid soaps, tissues, toilet paper, toothpaste, fly sprays, washing powder, window cleaners, cleansers, lotions and moisturisers. That is just for starters. Every week the shopping trolley would have about a quarter of these items at least; they are everyday items that have to be purchased once a week at least. In terms of children and young families, juice, crayons, pencils, pens, play-dough, plasticine, puzzles, scissors, rulers, rubbers, photo albums, photo frames and toys all attract 22 per cent wholesales sales tax, and their prices will be reduced greatly.

I want to go through some of the other benefits to families. The family assistance package, which I have already mentioned, deserves mentioning again: it involves $2.4 billion of family assistance. Something that I have become quite aware of in the last few days, because I have a rental property, is the First Home Owners Scheme. People are renting a property of mine at the moment, and the reason they are leaving my rental property is that they are taking advantage of the First Home Owners Scheme. With assistance from this scheme, they are able to afford to buy their own home now, and I am really pleased for them. Of course, I will have to look for another tenant, but that is life. These people are leaving because they are going to take advantage of the First Home Owners Scheme grant of $7,000, which will come in on 1 July regardless of people's incomes. That is a very positive thing.

A lot of families run small family businesses, and I want to touch on the effects of this package on small business families. Their corporate tax rate will go down from 36 per cent to 30 per cent in two stages. A lot of families work in those situations. Capital gains tax will be cut in half for individuals. As I mentioned, wholesale sales taxes will go, as will a whole host of state taxes. In New South Wales, the bed tax will be abolished from 1 July 2000, as will stamp duty on marketable securities. There will be cheaper diesel fuel; it will be down 24c a litre for heavy transport. That will mean that the cost of transporting goods to the supermarket will be reduced. As a marketer in a former life, I know how much transport costs contribute to the total cost of a product when it is on the shelf, so I greatly applaud the moves to reduce the cost of diesel fuel.

I am also pleased to see that we will be streamlining 11 reporting regimes into one. That is fantastic news. But the best news of all out of this tax package is what the states will gain from the tax package and tax reform. The states will get what they have never gotten before: an absolute windfall. They will have more money for roads and police, and more money for schools and hospitals. There is already evidence of this, according to an AAP report on 19 June which states:

The states were already spending their expected GST windfalls, giving away more than $1 billion in the current financial year ...

All of these measures and all of the tax reform packages that I have outlined today are going to be great for Australian families. Families will look forward to the tax reform package that will bring to them greater prosperity and more income than they have ever had before.

Mr DEPUTY SPEAKER (Mr Jenkins)—Order! The discussion has concluded.