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Wednesday, 29 August 2001
Page: 30537


Mr CREAN (3:48 PM) —This matter of public importance becomes terribly important. We have seen today the Prime Minister close up question time three questions short because he wants to avoid further scrutiny of his small business minister and his Treasurer. There was a scam exposed by the Labor Party last Thursday because of people within the Liberal Party being so incensed at the fraudulent scheme being put in place, and we have two ministers, the Minister for Small Business and the Treasurer, condoning and covering up this scam.

Yesterday in question time the Prime Minister indicated, when he got very agitated after a series of questions on this, that he did not think there was a scam. For him it is business as usual. This is the man who, when he was the Treasurer of this country, left a telephone book of bottom-of-the-harbour schemes. This is the person who failed to act on tax avoidance and to crack down on it, despite the fact that his own department, the Treasury, was advising him—pleading with him—to crack down on bottom-of-the-harbour schemes and to make people pay their fair share of tax. The Prime Minister has form, therefore; business as usual. Now he is trying to pretend that what the Liberal Party has engaged in is not a scam. What we have exposed is this: the Liberal Party has one rule for small business and another for itself. The Prime Minister of this country wants to have one rule for the small businesses of this country but a completely different one for the Liberal Party.

Let me just go to what the scam is, so that the Prime Minister can understand it. This government still has to answer this point, because it continues to avoid addressing it. The simple fact is, as the Treasurer repeats often, that businesses cannot claim input tax credits unless they pay the GST. That is how the GST works. The GST must be paid on the takings of the business, minus the GST already paid on inputs. That is how every business in this country has to operate. We know in the case that we have outlined in this parliament that the Liberal Party claimed the input tax credits. How do we know? Because we have a media statement from the secretariat of the Liberal Party dated 24 August which quite clearly says:

In December 2000 the Queensland division paid the Picnic Point Restaurant $9,090 for the fundraiser and claimed a GST credit of $826.41 in its December quarterly BAS.

From the Liberal Party's mouth, they are admitting that they claimed the input tax credits. Under the law, they have to pay one-eleventh of the takings to the tax office. If they have claimed one-eleventh of the catering bill, they have to remit one-eleventh of the takings, minus the input tax credits. We know as well what the takings were from the Costello fundraiser, now dubbed `dinnergate'. Moneybags Treasurer went to Toowoomba to fill the Liberal Party's moneybags at this dinnergate scam.

We know because of documents tabled by the opposition what the takings were from that dinner. They appear in the statement of income and expenditure for the period and they say the gross proceeds from the Costello dinner were $18,350. That document is on the record. If the law is to be complied with by the Liberal Party in Queensland, they must remit to the tax office one-eleventh of that, minus the input tax credits. In other words, they have got to remit $1,668 minus the $826: $842. This $842, as well as the $826 to the caterers—who themselves remit it—must go to the tax office. So what the tax office gets under this simple new system is still the $1,668 but they get it through two components.

But did the Liberal Party remit the takings of the one-eleventh of the $18,350? No. Instead, the Liberal Party want to pay the tax office $826—the input component of what they paid the caterers—but claim it all back; in other words, to effectively pay zero GST. No other small business in this country can do that, but the Minister for Small Business and the Treasurer condone it for the Liberal Party.


Mr Hockey —You have lost everyone.


Mr CREAN —If the minister at the table cannot understand his own tax, how does he expect small businesses in this country to understand it? That is the simple question. I put it as clearly as this: you cannot claim one-eleventh of the input tax on the caterer's bill unless you pay one-eleventh of the takings of the dinner. That is how the GST operates; that is what a value-added tax is. But what you have done is organised this nice little scam so you avoid the tax. That is what the scam is.

And they cannot claim in this case that head office was providing services to the Groom FEC, if that is their excuse, because all the documentation that we have tabled shows that they did not. It was the Groom FEC that organised and paid for—initially— the caterers. So the documents expose the cover-up. Instead of paying 10 per cent in terms of GST, they are getting away with something over four per cent. No other small business in this country can do it, so why should they be able to do it?

That is what the last week in this parliament has been all about. We raised this issue last Thursday, we have persisted with it over the weekend and we have also used question time over the last two days, not just to highlight the misleading by the minister but to demonstrate the double standards of this government. Not only has the minister misled but as small business minister he is condoning double standards for the constituency he claims to represent: one rule for the Liberal Party and another one for everyone else. He will not help small business but he will help himself in terms of his own fundraiser. In what they want to call a simple new tax the only simplicity is that everyone else pays it but not the Liberal Party. This is the government that says it wants to close down the black economy, when we have exposed them creating their own black economy.

That is why this matter of public importance needs to be debated, and I notice that the minister at the table is the Minister for Financial Services; I presume he is taking this issue. Where is the Minister for Small Business? Where is the Treasurer? They should be defending this scam. But they are out trying to avoid any scrutiny on this issue. They think that, because of the events that have happened in relation to the MV Tampa,this issue will go away. It will not go away, because what the Liberal Party has been engaged in is a fraud on the country and a double standard in terms of the small businesses of this country.

Let me go to the Treasurer; we have not got to him yet in terms of the questioning. We have embarrassed the small business minister constantly: he dithers at the dispatch box; he cannot come in here and give a coherent answer about anything. This is supposed to be the small business minister of the country. If he cannot defend himself, how can he defend small businesses in this country? This man is a shambles and a disgrace, and that is why he does not deserve to hold the office.

But this is the position of the Treasurer of the country: he avoided questions on this very issue when it was raised last Thursday. He looked like he had something to hide but he left the very clear impression that he knew nothing. As Laurie Oakes has observed, it was like Manuel in FawltyTowers: `I know nothing, Mr Fawlty. I know nothing.' That is what he was doing. He even suggested that we had fabricated this issue. He even suggested that, yet later in the day what did we find? We found the Treasurer fessing up to the fact that back on 21 February he was advised of this scam. So why didn't he pass it on? And particularly against a background where he told the parliament that if Simon Crean:

... thinks that there is anything untoward from the Groom FEC or, indeed, if he thinks there is anything untoward from the Liberal Party state division in Queensland, I would be happy to receive any information and I would be happy to pass it on to the Australian Taxation Office ... I have never obtained any preferential treatment for any Groom FEC or for the Queensland Liberal branch ...

But the truth is that he did receive this material on 21 February and he sat on it. I noticed today he was out there at a doorstop claiming that the reason he did not have to do anything in relation to it was:

... because, as is clear by the time Mrs Watts wrote to me, the matter had been disclosed to the federal director and rectified and Mrs Watts said in the circumstances she wished no reply.

The question I ask is: how did he know that? The letter from Mrs Watts, which has been tabled and made public, does not mention anywhere that the matter has been fixed by the Liberal Party. In the second last paragraph, it says:

The Queensland State Director has recently admitted he was in error in taking part in the scheme. However, the damage has already been done.

It is true that she did not ask him to answer it, but she should have taken him on face value, when he said to the world at large, `Send me the material and I'll act on it,' that he would act on it, but he did not act on it. How did he know, when he received that letter on 21 September that it had been acted on? Did he have discussions with anyone— with the Liberal Party or the member for Groom? These are all the interesting answers that we want to know in terms of this murky cover-up. As a further part of his misleading, the next day he denied that any money was claimed by the Liberal Party, and said that it was not clear that anyone claimed it back. He also contradicted the statement of the Minister for Small Business that there was no correspondence between the small business minister and me. Yet the statement from Lynton Crosby, which I referred to earlier, clearly shows that the Liberal Party had claimed back the GST credit.

How did the Treasurer know that this problem had been fixed? Why did he not pass on the material? He still has a lot of answering to do in terms of this cover-up. He and the Minister for Small Business stand condemned of covering up and condoning a scam that benefits the Liberal Party, a scam that is not available to anyone else in this country but which has been devised by shadowy figures within the Liberal Party, according to Mr Watts. We want to know why the minister and the Treasurer are not in the House today to explain the situation. The facts are simple. We know about the cover-up. We know that they have condoned it, but why is it that only the Liberal Party in this country can claim input tax credits without paying the GST to the tax office? Don't give us the excuse that the GST was paid to the caterers. Of course there is a requirement to do that as part of the normal transaction. That is input taxing, and that is what happens if you are not charging the GST. If you are going to claim the input tax credits, you have to pay the GST. Every small business in the country has to do that, but not the Liberal Party, and that is why they should be condemned. (Time expired)