Senator COOK(12.45 p.m.) —Notwithstanding the information Madam Temporary Chairman has just provided the committee, can I say that the opposition welcomes these amendments from the government. It is probably worth taking a minute of the chamber's time to remind it what is in fact happening here. `Taxation Laws Amendment Bill (No. 1) 1996' is a glorious and arcane title. Everyone, upon hearing a reading of that title, instantly knows what it deals with. What it deals with and what everyone knows it deals with is the provisional tax uplift factor—that is to say, the tax that is paid in advance by small business or those who receive income from investment in anticipation of what their earnings will be in the next tax year.

This has been a matter of high controversy in this chamber for some time. Indeed, it was a matter on which the election was fought in part. People will remember that in the election campaign the government, as the then opposition, featured the role of small business as an important driver in the Australian economy and made promises about what they would do for small business.

One of the promises they made, and they made it at a clarion level, was that the provisional tax uplift factor, which had been set at eight per cent, would be reduced to six per cent. The bill that we considered before and returned to the House as unsatisfactory contained a provision that for the tax year 1996-97 the uplift factor would be six per cent but for all the other out-years it would be 10 per cent.

What the opposition, the Australian Democrats and the Greens did was vote down the 10 per cent part for the out-years while keeping the six per cent part for the next year. They did it for the very sound reason that the government had stood for election on a platform of making the uplift factor six per cent. They never said anything at all during the election campaign about 10 per cent for the out-years. If one reads the fine print of their electoral documents, one can see the pledge was that the uplift factor in the 1996-97 year would be six per cent and the documents were silent thereafter.

So it was a complete surprise to all of us to see the government, so soon after its election, putting through a bill in which there was six per cent for one year and 10 per for the rest. Indeed, in the committee inquiry the Senate conducted into this matter, evidence adduced from industry organisations made it clear that they welcomed the change to six per cent but were astonished and dismayed about and in opposition to an elevation of the provisional tax uplift factor to 10 per cent thereafter.

What has happened in this chamber is that the opposition, the Greens and the Democrats have voted out the 10 per cent, the bill has gone back to the House and the government has insisted on its changes but now in this chamber proposes to make an amendment. That amendment, which is a complex one, introduces for the out-years a formula whereby GDP income growth for the out-years will be the calculation upon which the provisional uplift factor will be based.

Speaking for the opposition, that seems to be a huge step away and a huge backward step from what the government's position was. We welcome their backdown. That clearly is what it is. It is a backdown to a more sensible formula which relates to income growth in GDP for any year. It is on the basis of relating the uplift factor taxing level to what the anticipated level of income might be for a company rather than setting it at a nominal 10 per cent level.

So, in the first instance, we welcome this amendment and acknowledge the background against which this amendment is made. Once again it shows that the Senate has an important role in keeping the government honest, holding them to their election commitments and, in the event, staring them down and making them come back with a formula which expresses, at least in my view, the intent of that election commitment. So we support it.

I think this amendment will be welcomed by all in small business. This government—a government which small business trusted to deliver on their behalf—had put through within three months of its election a bill which did not do what small business anticipated it would do but it has now been required to do that. Small business will welcome this. Self-funded retirees and those who get income from investments will welcome it too, and we will support it.

Since we are in the committee stage, I have a couple of questions for the minister. Minister, in order to clarify the record, I ask you to explain the operation of the formula. What is the government's estimate for the 1997-98 year, and on what data is that based?