Mr FITZGIBBON (10:26 PM) —The Tax Laws Amendment (Retirement Villages) Bill 2004, the Tax Laws Amendment (Superannuation Reporting) Bill 2004 and, of course, the Tax Laws Amendment (Small Business Measures) Bill 2004 all relate to the GST, in a sense. The superannuation reporting bill may be scoping a bit more widely, but certainly all three of these bills relate to the GST and compliance for small business. Retirement villages and those who provide aged care services very much constitute small businesses. Isn't it amazing: 4½ years after the introduction of the GST, here we are in one evening dealing with three bills designed to address some of the complexities, anachronisms, problems, concerns, challenges and hurdles that flow from the introduction of the GST. Yet the government would have us believe that out there in the small business communities, and of course in the retirement villages sector, all is well with the GST. Day in and day out, the government comes in here at question time and reminds us all how pleased the various state governments should be about the big flow of GST revenue that they are receiving from the GST.

We know that, without doubt, this is the highest taxing government in Australia's history, but I do not hear any particular cheers from the state governments, who, as you know, Mr Deputy Speaker, face crossover dates well beyond 2004 and 2005. We all know that there is not a state government out there enjoying the fruits of the GST labour. We know that there are many small businesses out there suffering under the burden of the GST, and 4½ years later we are finally hearing from a government which has decided to address some of these issues—first on superannuation reporting, and tomorrow we will be hearing a fair bit about the BAS obligations and all the paperwork and burden that comes with those obligations. But we will not be hearing any remedy for all small business; we will be hearing a remedy for just those small businesses with a turnover of $50,000 a year or less. What is wrong with a government that finally identifies a problem with its own tax system but decides the remedy it is applying shall only apply to those firms with a turnover of $50,000 or less annually? I suggest to you, Mr Deputy Speaker, and to all members of this House that this is a government that just does not understand small business.

The bill before the House right now demonstrates that this is a government that has been in denial. It has been unprepared to admit, up until this stage at least, that the GST is adversely affecting certain individuals and small businesses and certainly, in this instance, people—usually not-for-profit organisations—who seek to care for the most vulnerable in the Australian community. These are of course older Australians—people whom we should be concentrating our compassion and care on most, because these are the people who have given us the opportunity to enjoy the living standards we have today, who did the groundwork, who set the standards for the Australian community and who have given us the comfortable style of living we enjoy today.

This is the mea culpa for the government after 4½ years. After 4½ years, in introducing this bill and in the debate which is ensuing, the government has finally admitted it got it wrong in terms of how the GST will apply to those living under certain arrangements in retirement villages. It is a debacle that we have been living for 4½ years now—and this is the remedy.

I want to take the House through the history of this, because it is pretty important. First of all the government said that GST would not apply to anyone living in a nursing home or retirement village. Of course it would say that, because to say otherwise would be political death. So it promised that no-one living in a nursing home or retirement village would be affected.

It is probably an opportune time to remind the House of who the Minister for Aged Care at the time was: it was the member for Mackellar. She was such a compassionate soul! We will all remember her interventions during question time. We will all remember the questions during question time when she feigned concern about the impact of the GST on residents in nursing homes and retirement villages. But of course it was just that—it was just feigned. It has been demonstrated by the member for Mackellar and by all those who followed her. There was a procession of aged care ministers at the time, as you might recall.

We are reminded that it was Sir Humphrey Appleby stuff. None of the ministers concerned had any real idea of how the GST applied to the circumstances which existed under their portfolio. But it was the Treasurer of the day—the same Treasurer that we have had since 1996—who had real control over this issue. That of course is the member for Higgins. I am surprised he is not in the House on this occasion apologising to all those older Australians who have been living with fear and uncertainty since the introduction of the GST. Up until tonight, that uncertainty has followed as a result of the government's unpreparedness to clarify this situation.

Let me go back to where it all began. The sector, as a consequence of the questions arising—mainly from the opposition at the time—intervened and made some statements about how the GST would apply to retirement villages and nursing homes. In 2003, they began a review of how the GST would apply in these circumstances. As part of this review process, the ATO came to the controversial view that those living in what they called `serviced apartments' in retirement villages were effectively living in their own houses. As services provided to persons in their own homes are generally not GST-free, this implied that services applying to people living in these so-called serviced apartments would, consequently, not be GST-free either. This was made clear to the sector in the ATO's consultation process.

The ATO subsequently prepared a draft ruling, but it did not release that draft ruling, which we all—particularly those members on this side—found pretty strange at the time. What occurred next was a farce in public policy terms. Again I signal the current Treasurer, Mr Costello. When word of the ATO's hardline decision spread, many in this sector understandably began to panic. They feared that they would be charged significant back taxes and penalties if they did not correctly apply the current law as it stood. So retirement villages started to increase levies to their residents as a means of covering themselves for these potential back taxes.

Some operators seriously questioned their financial viability when they considered the level of potential tax arrears that might be applied to them if the outcome were applied unfavourably in their terms. Others just took the risk—they just did not apply the tax and hoped that the outcome would be okay. They took a great leap of faith. The others took the more cautious approach and decided they would impose the levies. Of course, the impost of that decision fell on the residents in their villages.

We had an extraordinary situation. We had people in one village having GST imposed upon them, with all the consequences which go with that when you are on a low fixed income, and those in another who were not having that tax imposed on them because their managers somehow had faith in the government of the day and had faith that somehow it would all work out in the end. I can say this: those who took a great leap of faith have a lot to thank the opposition for in terms of its approach the issue, because if the opposition had not chosen to react and to put pressure on the government in relation to this issue there is no doubt in my mind—and I know in the minds of those who work in the sector—that this issue would not have been resolved in favour of the retirement village management or the residents of those villages.

So the farce continued. It is clear that, while the ATO had made one decision, somehow or other along the way in a pre-election climate the government started to sense it had problems in this area—in the same way, Mr Deputy Speaker Causley, as you would remember as well as anyone, that the government sensed it had a problem in the area of caravan park residents at around the same period. In that pre-election climate, and with the fear of reprisal at the ballot box, the government started to review its situation. Up and down the country, Labor members and candidates were waging war against this uncertainty which is another example of the grey area of the GST.

On 10 August this year, the then shadow Treasurer, the member for Hotham, asked the Treasurer a question without notice. I want to share it with the House because I think it is critical to making my point. He asked:

And I note she has joined us in the House tonight, which is a convenient coincidence—

I am delighted that the member for Petrie joins us in the House at this time. She, of course, was one of many members involved in this issue. I did her a disservice earlier in the debate when I suggested that only members on this side of the House were expressing concern and taking up the fight on behalf of the many residents in retirement villages and serviced apartments who were to be whacked by this outrageous GST impost on the services being provided to them. So I do give due credit to the member for Petrie for the excellent work she has done in this regard. And she would no doubt join with me in rejoicing at this enormous backdown, albeit after 4½ years, on the part of the government—this final recognition that these people have been treated unfairly.

For 4½ years these elderly people have been living in fear and uncertainty at the prospect of having this GST imposed upon them, not to mention the management committees who, wisely and understandably, were not prepared to impose a tax on their elderly residents which they were not sure would ever be brought to law. I congratulate the member for Petrie on her very good work in this regard. I am always more than happy to give credit where credit is due and more than happy to give credit to a member opposite who is prepared to stand up to a Treasurer absolutely obsessed with things fiscal without any regard to the social consequences those matters can have on individual people.

I, like every member of this place, have high regard for strong fiscal management—a determination to keep the budget in surplus and all those ongoing positive effects that it has on the business of economic management in this country. Again I congratulate the member for Petrie. I am sure I am doing her a great world of good on her side and I am sure, the next time a ballot arises in the government party room, the member for Petrie will be out there reminding people of the fantastic job she did defending the elderly people in her electorate of Petrie against the mean and nasty spectre of a Treasurer who has overseen economic policy in this country over the course of the last eight years.

But I return to my original point—and I can see the member for Petrie enjoying my contribution—which relates to the question in this place on 10 August this year from the member for Hotham, the then shadow Treasurer. I now share with the House the Treasurer's response:

I do not know when the member for Petrie intervened, but obviously it was sometime after 10 August 2004.

Here we are in December 2004 and things have changed somewhat. In direct contravention of a core election promise, the Treasurer originally indicated that persons in serviced apartments and retirement villages were to be charged GST on their basic living services. He had, in fact, extended the GST into aged care—somewhere he said it would never go. I see the member for Gilmore in the House tonight. I know she has a strong interest in this issue. I know she was given every assurance by her Treasurer and by her Prime Minister that the GST would not apply to elderly Australians on their accommodation arrangements in retirement villages and nursing homes. But here, in the lead-up to the 2004 election, things were beginning to change: we had a determined Treasurer, as always with a smirk on his face, having promised originally that elderly residents in nursing homes would not be affected, saying that the legislation will stand and tough luck, basically.

But having given the member for Petrie some credit and the member for Gilmore a little less credit, suddenly something more important came along. And that more important thing, of course, was an election. Nothing can be more persuasive for a Treasurer, even one as determined as the member for Higgins, than an election. Indeed, nothing can make a Treasurer more determined than the prospect of becoming a leader after a fourth election win. So the economically dry Treasurer, the member for Higgins, suddenly has a reincarnation because he realises his big chance at becoming Prime Minister is passing before him. So with respect to the member for Petrie and the member for Gilmore, the reality is that it was the election that really changed the situation and that brings this legislation to the House tonight. Either the Treasurer misled the House or he had a change of view, and I have made out the case that he changed his view.

Tonight we have a bill before the parliament that clarifies the situation, but not before another instance of embarrassment to the government, because Treasurer Peter Costello was not about to run out and announce that he had changed his mind—that he would never do. All that mattered to the Treasurer was that the member for Petrie, the member for Gilmore and others were able to go back to their electorates and say, `By the way, we've fixed that problem.' But of course there was never going to be any public mea culpa from the Treasurer. There is no way in the world the member for Higgins would ever come out publicly and say he was wrong or say he lied or say he reneged on his promise.

The DEPUTY SPEAKER (Hon. I.R. Causley)—Order! The member for Hunter will withdraw that comment.

Mr FITZGIBBON —I withdraw that comment, Mr Deputy Speaker. He would never come out publicly to say that he reneged on his promise that the GST would not apply to nursing homes, retirement villages or retired people in general in those situations—never would he do that. He can smirk in question time, but you will never see him at a press conference doing a mea culpa. You will never see him admitting he was wrong; you will never see him backing down on an earlier statement. He stood in this House in response to a question from the then shadow Treasurer, the member for Hotham, and said:

And I can see the smirk on his face. I can see the disdain. I can see him standing at the dispatch box answering the question about this.

Mrs Gash —You're boring. You're repeating yourself.

Mr FITZGIBBON —And the member for Gilmore says I am labouring the point. Well, I am labouring the point, because I want people to understand. I want them to see the picture. I want them to understand the circumstances at the time. The circumstances were that the Treasurer made a promise, the Prime Minister made a promise, the member for Hotham asked at the time a pretty appropriate and to-the-point question and, smirking on the other side, the Treasurer stood his ground.

Here is the point: he would not come out at a later point and say mea culpa. He would not say: `I was wrong. I apologise. I understand there's an election in the offing and I understand people are hurting. I understand there's uncertainty. I understand that it is not only damaging residents of retirement villages but also putting a lot of pressure on what in many circumstances are not-for-profit management committees. I understand all that, and we are going to do something about it.' No, not this Treasurer. Rather it was Minister Brough, who snuck out of the chamber just prior to this bill coming on for the debate, and I do not think that was a coincidence. I am sure Minister Brough knew only too well. He had had a look at the Notice Paper and at the speakers list and he knew exactly what was coming on for debate next.

So the Treasurer slips Minister Brough out there to announce that there will be some changes—in effect, a big backflip. But you will never see the Treasurer of the Commonwealth, at least not the current Treasurer of the Commonwealth, making such a backflip. He slips out the Assistant Treasurer, Minister Brough, to make the announcement on his behalf, hoping that all those up in the press gallery will not notice that the Treasurer has now admitted to having broken a clear election promise from the lead-up to the 1998 election but, at the same time, has allowed his backbenchers, the member for Petrie amongst them—I acknowledge her promotion to the position of parliamentary secretary—to go back and tell residents, their management committees and all those concerned that everything is okay. There is no mention in the Financial Review, no mention in the Australian, no mention in the SMH and no mention in the Age of the Treasurer's backflip—he gets away with it. He is still the epitome of fiscal rectitude, but the backbenchers, thanks to Minister Brough's announcement, get to go back to their electorates and give their constituents the good news.

This is an exposure of the sleight of hand of this government. They get it wrong. They take 4½ years to get it right, but never would they admit that they got it wrong in the first place. So this is a bill that comes all too late. According to the EM, this measure will cost $63 million over the forward estimates and $47 million in the first year. This is money that the government ought never have received. This is money that the government promised it would never receive—money the government said it would never take at the expense of the elderly and the most vulnerable in the Australian community.

While the opposition are supporting the bill with some enthusiasm, having taken up the fight over the course of the last few years, we still have concerns about it. Those concerns do not just have their origin in our own thinking; they have been brought to us by organisations who represent both the providers of aged care facilities and services and those who live within them. In particular, some of the advocates in the sector have expressed concern with respect to two elements of the bill. The first problem relates to the fact that the bill empowers the Minister for Ageing—and I am not sure that we have any more confidence in this one than we have had in the last few—to specify the level of care needed to qualify for GST-free supplies. There is some concern that the level of care could be specified as being so high that it would be too onerous for an operator to provide and in that case too expensive for the self-funded resident to pay, even with a GST-free concession. The sector would prefer that the bill specify that satisfying one of the criteria listed in the aged care minister's determination of 2000 would be a sufficient condition for the GST-free treatment.

There is also some concern that the bill empowers the minister to specify the process on which the requisite level of care for GST-free services is based. This is expected to be through the Aged Care Assessment Team, or ACAT, which currently assesses residents' eligibility for government funded places. This, of course, may delay the ACAT assessment process. Advocates in the sector suggest that this could be delegated to a doctor or registered nurse. The opposition is sympathetic to that proposition and would like to have further consultation with the government in this regard. I should say that the opposition is not going to hold up this bill in either this place or the Senate because, already 4½ years late, these measures are all-important to both residents and those who provide residents with the services they so need and require.

The bill contains provisions that clarify the GST status of certain supplies when made by a charitable institution or trustee of a charitable fund to a resident of a retirement village. The law specifies that accommodation related services and meals are GST-free supplies. Again, Labor have consulted with the industry and we will continue to pursue the issues the industry has raised as a means of making this bill even better, more appropriate and more accommodating of the needs not only of those people in particular who enjoy the services of these living arrangements but also of the many people in organisations who provide those services. In my own electorate the organisations that immediately come to mind are the Masonic and Catholic groups that provide so many great services and build and fund so many great facilities. Alroy House and Northern Coalfields Community Care Association provide a range of residential care facilities in my electorate, mainly in the Cessnock area. The Masonic organisation makes a great contribution in the Kurri Kurri area. Benhome, the benevolent institution in Maitland, does the same. We support this bill but, given the government's appalling performance in respect of the GST and its impact on these services, I move:

This impact has been on many in retirement villages and—who knows?—they may have passed on by now. Many people have been living under stress and strain and have had much concern about the imposition of the GST. All of this was unnecessary.

The DEPUTY SPEAKER (Hon. I.R. Causley)—Is the amendment seconded?

Ms Livermore —I second the amendment.