Senator SHERRY (Deputy Leader of the Opposition in the Senate)(11.30 p.m.) —by leave—I move:

(1)   Clause 6, page 3 (lines 12 to 17), omit the third dot point.

(2)   Clause 6, page 4 (lines 3 to 5), omit ", and to pay any advance instalment of surcharge on the member's contributions for the next financial year,".

(3)   Clause 6, page 4 (line 15), omit "or advance contribution".

(4)   Clause 6, page 4 (lines 21 and 22), omit "or advance payment".

(5)   Heading to Part 2, page 5 (lines 2 and 3), omit "and advance instalments " .

(8)   Heading to Part 3, page 13 (lines 2 and 3), omit "and advance instalments ".

(9)   Clause 15, page 17 (lines 1 and 2), omit "and determination of advance instalment ".

(10)   Clause 15, page 17 (lines 14 to 21), omit subclause (2) and heading.

(11)   Clause 15, page 17 (lines 26 to 29), omit subclause (4) and heading.

(12)   Clause 15, page 18 (lines 10 to 16), omit subclause (6) and heading.

(13)   Clause 15, page 18 (lines 21 to 25), omit subclause (8) and heading.

(14)   Clause 15, page 19 (line 1), omit "or determination".

(15)   Clause 15, page 19 (lines 3 to 4), omit "or determination".

(16)   Clause 15, page 19 (lines 13 to 17), omit subclause (11) and heading.

(19)   Heading to Part 4, page 30 (lines 2 to 3), omit "advance instalment ,".

(20)   Clause 25, page 30 (line 5), omit "or advance instalment" .

(21)   Clause 25, page 30 (line 7), omit "or advance instalment".

(22)   Clause 25, page 30 (line 23), omit "or advance instalment".

(23)   Clause 26, page 31 (line 13), omit paragraph 26(b).

(24)   Clause 27, page 31 (line 16), omit "advance instalment ,".

(25)   Clause 27, page 31 (line 18), omit "advance instalment,".

(26)   Clause 35, page 38 (line 12), omit "or advance instalment ".

(27)   Clause 35, page 38 (line 14), omit "or advance instalment".

(28)   Clause 35, page 38 (lines 25 to 27), omit paragraph (c).

(29)   Clause 37, page 39 (line 7), omit "or determination".

(30)   Clause 37, page 39 (line 10), omit "or determination".

(31)   Clause 37, page 39 (lines 14 to 15), omit "or determination".

(32)   Clause 37, page 39 (line 18), omit "or determination".

(33)   Clause 37, page 39 (line 25), omit "or determinations".

(34)   Clause 37, page 39 (line 28), omit "or determination".

(35)   Clause 37, page 40 (line 2), omit "or determination".

(36)   Clause 37, page 40 (line 7), omit "advance instalment,".

(39)   Clause 43, page 44 (line 14), omit the definition of advance instalment.

(40)   Clause 43, page 45 (line 30), omit the definition of determination.

Firstly, I should explain the reason why we do not have a running sheet. Even though our amendments were in some hours ago for compilation into a running sheet, the Australian Democrats have withdrawn all their amendments. This meant that the entire running sheet had to be rewritten. I do not criticise the Democrats for that; that is their prerogative. But I was not aware of that having happened until about 35 minutes ago, which meant that the running sheet could not be prepared in time.

I turn to the issues that we are considering. I know there are a substantial number of amendments, but many of those which we are considering tonight deal with the same issues. On this occasion we are dealing with a substantial number of amendments: 1 to 5, 8 to 16, 19 to 36 and 39 and 40. All of those amendments are in respect of advance instalments, of which I have spoken during the second reading debate.

The vote effectively to defer this legislation, requesting that the government rewrite the legislation taking into account the criticisms that were listed, was defeated. We made it clear what would occur if it were defeated and if the government were not prepared to reconsider the various types of issues, including the advance instalment issue. That was not our first option; we would have preferred the government to have listened and to have rewritten the legislation. But that has not happened. That having failed, Labor will now attempt—hopefully with the assistance of other parties and the Independents in the Senate—to rewrite some of the more iniquitous provisions in this package of legislation.

I want to make one point at this particular stage of the debate about the collection mechanism. We started to rewrite the collection mechanism about two to three weeks ago. We got a further set of amendments from the government—and I have to say that the continual government amendments subsequently made that rewriting more difficult. An attempt to redraft the collection mechanism would have meant redrafting the seven bills in very substantial ways—in fact, a total rewrite—and could have meant some 400, 500 or 600 amendments. It would have been a massive number of amendments.

Our preferred option was that the government would withdraw the bills, rewrite them and reconsider the collection mechanism. That has not happened. That is lost, and we accept that. That is on the government's head. We would have preferred the government to have rewritten the collection mechanism. We were unable to rewrite the collection mechanism, given the massive number of amendments that were required, because we do not possess the same resources as government in terms of drafters. I requested from Senator Kemp access to drafting staff. That was not forthcoming. I do not imply a criticism of Senator Kemp in that because his refusal to meet that request was based on the sheer volume of work. We understand that, but that is part of the problem in dealing with these bills. We think the rushing and the volume of work are unreasonable.

For those reasons, we have not attempted to rewrite the collection mechanism. As I have said, it would have been a massive job. It is the government's role to do that. We urge the government to do that. It is not our job to rewrite the collection mechanism.

Senator Ferguson —Who said it was? You've just got no alternative.

Senator SHERRY —We had a number of alternatives. You are unwise enough not to listen to them. That issue has now passed. We and the industry have highlighted the consequences that flow from the collection mechanism included in these bills. It is regrettable that those consequences are going to flow.

There are a number of other fundamental issues that we want to deal with in respect of our amendments. I am referring to advance instalments. I know that it is a circuitous route, but I need to put these matters on the record. We are going to do the best we can to minimise the problems that we highlight in the committee stage. We are not going to be obstructive in the sense that we are going to speak unduly, but we do intend to comment in respect to our major series of amendments. We believe we have a right to do that. It is unfortunate that we are here tonight at 25 to 12 and will shortly conclude. I would have liked to have had four or five hours on this.

Senator Kemp —We can have four or five hours on it.

Senator SHERRY —The government chose to prioritise other business. We find that somewhat strange, given that this was the government's No. 1 revenue raiser. Half a billion dollars is at risk. If we had been able to start at 8 o'clock, maybe we would have got through the amendments substantially and been in a position to conclude them tonight. I do think that is unfortunate for the simple reason—and I say this quite frankly—that industry want to know what the final position will be. They want to know that. We are not going to abrogate our right and responsibility to deal with significant amendments—and these are significant amendments—in a reasoned way.

As far as Labor is concerned, the advance instalment provisions of this legislation represent one of the most atrocious elements of the government's legislation. If an individual has to halve the 15 per cent tax, the advance instalment provisions require the individual to pay the following year's tax liability in advance. It assumes that an individual will have an ongoing taxation liability.

I would like to make a few other comments about this issue. What the government is trying to do is bring forward its revenue through this advance instalment. Of course, the effect of pushing back the dates that the surcharge debt from 1996-97 is payable by, in conjunction with the advance instalment, led to one outcome: a huge amount of revenue being collected in the year 1999-2000. I would hate to suggest that the government is fiddling the numbers, but that is exactly what the government is attempting to do. The government is seeking to raise the maximum amount of revenue in 1999-2000 that it possibly can.

Of course, nothing particularly exciting is happening in the year 1999-2000. I do not know whether any of the senators can think of anything that is due in 1999-2000 and why the government would want all the additional revenue because of the effects of the advance instalment. It may just be that—I think—there is an election scheduled, but maybe I am not sufficiently cynical to believe that the government wants to boost its revenue in that year because there is an election scheduled.

Senator Ferguson —You used to be in one; you ought to know.

Senator SHERRY —I will not respond to the provocation; we could sit until four or five in the morning as a consequence of that. I will stick to the issues.

The CHAIRMAN —Could I remind honourable senators that interjections are disorderly, but that is compounded when the senator is not in his or her own seat.

Senator SHERRY —Thank you, Mr Chairman. I am trying to avoid the provocation. It does not hurt the government that a large part of the revenue that would have been raised in 1996-97 will not now be collected until 1997-98, thereby inflating the bottom budget line in that year as well.

The opposition also notes that the government does not propose to insert a line item in the budget statements indicating the amount of money that the commissioner has to refund due to the incorrect collection of moneys. The opposition would note strongly that, should our amendments on advance instalments fail, the government should be required to put this liability to refund Australians' superannuation moneys with interest as a separate line item in the budget, particularly if the government is true to its promise of budget honesty.

I will move on to the equity issues that the advance instalment provision raises. How can this be a fair tax on superannuation when individuals who should not be required to pay the tax in the first place are required to pay an advance instalment? Senator Kemp has been very cautious with his words. He says not one person need pay the 15 per cent tax if they all provide their tax file numbers, but we know that not everyone will provide their tax file numbers.

If you ask a superannuation fund how many are likely not to provide their tax file numbers, they will tell you it will be at least a million in the first year, which means that they will not only be hit by the 15 per cent tax, they will also be hit by the additional advance instalment of 7½ per cent. Given that these are likely to be low income, part-time, casual or itinerant workers who fail to provide their tax file numbers to the superannuation fund—either because they are unaware of the requirement to do so or because of the inability of the fund to contact them—they will pay the total tax in the first year of 22.5 per cent. These are people who should not be paying this so-called surcharge.

Senator Kemp will not assure the Senate that not one person who earns less than $70,000 will have to pay the tax. He will assure the Senate that not one of them need to, but he will not assure the Senate that not one person will have to. He knows the evidence; he knows what the reality is out in the industry.

Senator Kemp —Oh!

Senator Carr —He's got you there.

Senator SHERRY —Senator Kemp—through you, Mr Chairman—continues the same sort of theme, `This is not a tax; it is a surcharge.' I put to the Senate that this is a fundamentally dishonest approach. Senator Kemp continues to say that people earning less than $70,000 need not have to pay the tax, but all the evidence before the committee—never refuted by anyone—says that hundreds of thousands, a million or maybe more, people who earn less than $70,000 will have to pay the tax because, for various reasons, they do not provide their tax file number. That is a 15 per cent tax and another 7.5 per cent advance instalment. That is a total of 22.5 per cent tax on top of the existing 30 per cent tax. You can imagine what is going to happen when the people who have not provided tax file numbers open up their fund statement.

Senator Kemp —Come on, Nick!

Senator SHERRY —It is a very necessary point, Senator Kemp. It is very necessary to get this on the record. They will open up their fund statement, and they will look down there and see 30 per cent tax, 15 per cent surcharge—so-called—tax, 7½ per cent advance instalment tax and probably the admin charges for the collection of the new tax. There will be four amounts deducted from a million people who earn less than $70,000. It is not me who says this; it is the experts in the industry who say it. The government knows it is true.

Senator Kemp —Come on, Nick!

Senator SHERRY —Senator Kemp, you can say, `Come on,' but I am not saying it; it is the industry that is saying it. These are the people who have to collect the tax file numbers, but all this money is collected. Let us say it is 10,000 people, Senator Kemp; let us say it is 100,000; let us say it is a million. Whatever the final figure will be, it will be significant. The tax office collects all the money and then it has to refund it all. So we could have a million people, with all the tax collected, who then have to get a refund—if they, of course, remember to go to the tax office. Then we have the issue of the advance instalment. This issue serves to highlight the inequity of the advance instalment.

Senator Carr —I don't think he's got it.

Senator SHERRY —I think you are right, Senator Carr. I do not think Senator Kemp has got the message. Everyone has been telling him this and everyone has been telling Mr Costello. It is important to get this issue on the record in this debate because when the complaints come to the electoral offices of the government we will know who to blame.

Senator Kemp —Ha!

Senator SHERRY —You can laugh, but I tell you that a few of you will be ducking once people get their statements. It is a great tragedy that this should occur. These are the sorts of issues we raise.

Senator Carr —It's callous.

Senator SHERRY —It is callous, Senator Carr. Finally, how can the voluntary principle of collection of—(Time expired)

The CHAIRMAN —Before I call another speaker, could I just indicate that certain of those amendments which we called amendments will have to be moved separately. They are amendments Nos 6, 7 and 18. The question will have to be that a certain clause stand as printed. So we would be looking firstly at amendments Nos 1 to 5, 8 to 16, 19 to 36 and 39 to 40. Then we will go back to amendments Nos 6, 7 and 18, after we have considered the amendments.