Mr CREAN (3:40 PM) —This matter of public importance is directed fairly and squarely at the Treasurer, and I will be interested to see whether he comes in to defend himself in this House. This is not just a question of trusts; it is a question of trust. It was an agreement entered into with the Labor Party to get bipartisan support for business tax reform, an agreement signed on behalf of the whole government and now which he will not reaffirm today despite being questioned about it. This is a person who is about to be rolled or censured by the National Party, but he has still got the numbers. He has got the numbers because Labor is prepared to support the original proposal. So he has the numbers, but has he got the guts? That is, in essence, what is involved in this issue today. I see him in the chamber and I hope he takes part in the debate. He wants to come into this House and brag about the fact that he could get the GST through even though Labor opposed it, and now we are offering support and he is walking away from the proposition.

This is a government, though, that is soft on tax avoidance. It slugs ordinary Australians with its deceitful GST, most recently demonstrated by its broken promise on petrol, by the pensioners who were not compensated and also by the `never ever' claim. While on the one hand he is slugging ordinary Australians with it, he slip slides on the top end of town. The latest is this trusts issue. We have asked the question before as to whether there is not a conflict of interest in this problem that he is confronted with on trusts within the coalition party because a number of members of his frontbench have and own family trusts. Tony Abbott, John Anderson, Alexander Downer, Peter McGauran, Bruce Scott, Peter Slipper, who is a parliamentary secretary, Wilson Tuckey, Chris Ellison, John Herron and Ian Macdonald are all owners of family trusts. Yet here we have a government tearing itself apart within the coalition about whether it can proceed with what it undertook to proceed with. You would have to say there is a strong supposition of a conflict of interest. This goes to a position in which the National Party is reported last night to have voted unanimously to withdraw support for the government in its attempts to crack down on trusts. But the government does not need the National Party because it knows that it has got support from this side of the House. Costello has the numbers, but has he got the guts?

Mr DEPUTY SPEAKER (Mr Nehl)—The Treasurer has the numbers.

Mr CREAN —The Treasurer has the numbers, but has the Treasurer got the guts? That is the question. He has also committed to it in writing. The other question that has to be asked of him is: will he honour his agreement, an agreement not just on his behalf but on behalf of the whole government? I tabled earlier today a letter dated 24 November 1999. This was the agreement that we reached on business tax reform in which he said:

Of course he did not meet that; he has put it back a year. But he then went on to say:

So will he stand up to the Prime Minister when he comes under pressure from the National Party? We know he was not able to stand up to the pressure from the Prime Minister when he rolled him on exempting food from the GST, something the Treasurer said he would never condone. We know that the Treasurer got rolled on tariffs. Is this another example of where he will be rolled again? Will he allow himself to be rolled in circumstances in which he has a clear commitment from us and the numbers in the House? If he does not honour the agreement that he signed underpinning the business tax reform and put in writing on behalf of the government, he must resign. It is as simple as that. This is not just a question of trusts; it is a question of trust. It is a commitment that you made to us in the interests of getting a bipartisan outcome.

This is an important integrity measure so far as fairness is concerned and so far as the budget is concerned. Trusts can be used to minimise taxation. That is the truth of it. But we also know, from the quote from page 115 of the ANTS package of August 1998, the government's own attestation as to why something needed to be done on this:

So this was the position that the Treasurer was saying was guiding him and directing him in terms of clamping down on them—his words, and we endorse them because we believe it is an important integrity measure. But it is also a measure that is $2 billion worth in the budget. I will be interested to hear what the Treasurer says on this point, because we understand that he has had Niki over there up in the gallery telling them that—

Mr CREAN —Mr Deputy Speaker, he hardly comes in to take a debate. Does he have to consistently interject?

Mr DEPUTY SPEAKER —I am trying to keep him quiet.

Mr Costello —The AWU would—

Mr DEPUTY SPEAKER —Order! Treasurer, you will have your turn soon.

Mr CREAN —We want him here, but we want him to defend. But just get him to shut up for the purposes of this part of it.

Mr Costello —I just wanted to hear what the AWU has to say—

Mr CREAN —I will tell you. You can have all the chance you want later, my friend, to answer this. We know that Niki Savva has been up in the gallery saying this is not $2 billion worth, if it goes; she is talking about a significantly less figure. But what does page 127 of the ANTS package show? It shows that the revenue gained from this measure is $900 million in the first year, $760 million in the second year and $430 million in the third year.

Mr Kelvin Thomson —That sounds like $2 billion to me!

Mr CREAN —That sounds like $2 billion to me, and not only is it the basis upon which you went public in defending this; it is $2 billion factored into the ANTS package and therefore the revenue neutrality test. So, if this is watered down or not proceeded with, not only is it a hit to the budget; it undermines the whole revenue neutrality dimension of the business tax reform, which formed the basis of bipartisanship on business tax reform. We all know that these areas are difficult, and the alienation of personal services income was one that he referred to before, which we actually insisted on as part of the business tax package, as part of the revenue—

Mr Costello —You didn't!

Mr CREAN —Yes, we did. You know it, because you walked out on the negotiations. You got in a huff and walked out on your negotiations, and it was your advisers who brought you back in to cement the deal on business tax reform.

Mr DEPUTY SPEAKER —The Treasurer will be silent and the Deputy Leader of the Opposition will address his remarks through the chair.

Mr CREAN —That is what led to the letter of 24 November. But we offered bipartisanship to get business tax reform up. We disagreed on the GST but we said that business tax reform was important to give business certainty beyond one electoral cycle and we were prepared to reach agreement. We honoured it. We were the ones who had to go into our caucus room and argue for a reduction in capital gains tax.

Mr Costello —Oh, so you were against it!

Mr CREAN —This was no mean feat on our part. I was not against it. I undertook to do it. I did and I delivered. All I want you to do, my friend, is deliver your side of the bargain. We have delivered. Can you? Let us get that smirk off your face, and just get a commitment that you will do what I did.

Mr DEPUTY SPEAKER —No, no! There is no smirk on the chair's face. Address your remarks through the chair.

Mr CREAN —If we were prepared, and I was prepared, to go into our caucus and argue to deliver our side of the bargain, that is all we ask of you. But can you do it? Will you do it? Can you deliver? Have you got the guts to do it? That is the question that we are posing to you—and, if you have not, you have to resign. You signed an agreement that said you would do it, that you would honour it in full.

We have the Prime Minister running around the country saying that he cannot give relief to Australian motorists because the cost would affect the budget. He reiterated that today. He said any cut to revenue or any dip into the surplus is going to put upward pressure on interest rates. That is his point. If the government does not proceed with this measure, it is a $2 billion hit over three years. You cannot have it both ways. You cannot say that you cannot afford to do it for Australian motorists because that is going to put upward pressure on interest rates but cave into the National Party and have people believe that will not. This is a government that has to have some consistency in this regard—let alone honour the agreement that was entered into.

What was the commitment? This is important to go through. It is not just the letter he signed off to me. Back in June of 1999, he said in answer to a question from me, `The government's policy as announced in A New Tax System, ANTS, stands.' The question was: would he confirm the full implementation of the proposal to tax trusts? So there he was back on 7 June 1999 saying it stands. In answer to a question from me on 12 October 1999 about what Rob Bastian was saying, `Given that you have already put this measure off for a year, costing up to $900 million, will you guarantee not to water it down further?' he said, `We remain committed to introducing it.' We then have the press release of 11 November in which they make the same commitment, and then we have the letter to me which I have already referred to. The Treasurer gave his word to me in writing in that letter of 24 November 2000 and then he gave his word to the House in similar terms. The time was 4.21 p.m, the Hansard reference is page 12546 and the Treasurer promised:

These same business tax changes were announced in the Treasurer's first press release, which states:

In his second press release—No. 74 of 11 November—the Treasurer states:

So the Treasurer said consistently that he will do it in full. We asked him today whether he stands by it, but he did not respond in the categorical way in which he has made that statement to date or in the same manner in which he wrote the letter to me to secure our support on the other business tax reform measures that he is now under pressure from the National Party to move away from.

I have heard the argument and we have some degree of sympathy for the argument about trusts being a vehicle for farmers. However, partnerships are the usual farming business entity. Tax statistics show that there are 140,000 primary production partnerships but only 25,000 trusts operating in primary production. The National Party is not speaking for all farmers; it is speaking for the top end. Is it speaking from self-interest because it has trust arrangements as well?

This is not the first time that the government has gone soft on tax avoidance. The member for Kingston will outline how the government has failed to act on recommendations associated with high-wealth individuals. But this Treasurer is also a serial offender in going soft on tax avoiders in the area of superannuation and employee share schemes. Before he came to office, he promised to support root and branch Labor measures designed to close these loopholes. He has been in government for almost five years and we are still waiting to see that. The Treasurer is a serial offender on tax avoidance and he ought to be condemned for it. If the Treasurer does not honour his promise, he should resign.