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Wednesday, 28 June 2000
Page: 18447

Mr McMULLAN (2:00 PM) —My question is to the Acting Treasurer. Do you recall as Acting Treasurer last week ruling out a moratorium on the introduction of the GST on partially completed houses, saying:

... buyers and home builders have known about the GST since 2 December 1998, so there has been plenty of time to make a decision in the context of construction being completed by 1 July 2000.

Why, then, in your capacity as local member, did you write to the Domaine building company on 19 June, saying:

Clearly, there is no excuse for the house not to be substantially complete by the 1st July ... I do not believe you are entitled to pass on $11,984.29 to [my constituents], which you estimate is the GST impact by July 1 ...

Minister, if home buyers are required to pay GST on work done after 1 July, irrespective of whose fault it is, wasn't this statement by you false and misleading? Isn't it a case of you saying one thing in this parliament and another at home?

Mr Ross Cameron —Mr Speaker, I rise on a point of order. Under standing order 144, I think there are limits even to your generosity on permitting argument proffered in the form of a question.

Mr SPEAKER —The member for Parramatta is right that there are limits to my generosity. I was obviously listening to the question from the Manager of Opposition Business, and in all instances it was framed as a question. I concede that it was longer than is normally tolerated, but had I not been happy with it I would have ruled him out of order, and I did not do so.

Mr FAHEY (Minister for Finance and Administration) —I did indicate to the House last week that owners and builders were aware of the fact that there would be a GST impact on houses. They knew that in December 1998. The honourable member has referred to some representations received from constituents which I acted upon appropriately. Let me explain. The constituents that came to see me in respect of a house signed a contract in October 1999. That contract required completion of a home within a particular period of time—from memory, it was a 32-week contract. When my constituents came to see me, that house was at the stage of having a slab poured and half a frame erected. They came to see me after they received a letter from the builder indicating, without any explanation, that there would be an increase in price of just under $12,000. Their complaint to me related to the relationship between them and their builder and the fact that a representative of that builder had indicated to them earlier this year, when discussion came up on the question of what the impact of the GST would be, that the house would be three-quarters complete by 1 July and that the impact would be around $2,000. They received the letter with no explanation and with little progress occurring on their house under their contract. They said to me, `It seems a bit rich that all of a sudden a non-explainable $12,000 increase is now being requested of us, with little progress on the house over all these weeks, when we were told earlier this year that there would be an increase of about $2,000—which we had accepted.' Those matters were put to the builder in terms of re-examining the amount that had been sent in that letter in the context of the earlier discussions between my constituents and their builder.

As I pointed out to my constituents and, from memory, as I pointed out in the letter to the builder, the contract was signed in October 1999, with knowledge they had had since December 1998. In all of those circumstances, I think it was not unreasonable for my constituents to believe that the house would have been substantially complete by the time that the GST impact took effect. They accepted from those discussions that that impact would be about $2,000. I put it to the builder that he might reconsider the amount in those circumstances. I think that goes to the contractual relations between the builder and the owners, and I would suggest that it is entirely appropriate that a concern expressed on delay and on impact to them be taken up by me, as a local member, with the builder. I did that, and I would do that again.