Senator WATSON —My question is directed to the Assistant Treasurer. I refer the minister to the outdated taxation system which the coalition government inherited when it came to office. Minister, what problems exist with the current system and how important is it that Australia pursues taxation reform and less tax?

Senator KEMP —Thank you, Senator Watson, for the question. There are two questions which the Labor Party seeks to avoid and really hates. The first question is: what does the Labor Party stand for? No-one knows the answer to that question. I certainly do not. The second really hard question for the Labor party is: where does the Labor Party stand on tax reform?

Senator Hill —I know where Gareth Evans stands.

Senator KEMP —I do not know where the Labor Party stands on tax reform. We know where Wayne Goss stands on tax reform and, as my colleague Senator Hill said, we know where Gareth Evans stands on tax reform. We know that Gareth Evans supports death duties but we think Kim Beazley does not support death duties. It all goes on and on. Even the Young Turks want tax reform. John Faulkner is not a Young Turk so he probably does not want tax reform. Senator Sherry is getting close to that margin and we do not think Senator Sherry wants tax reform.

In relation to my answer to Senator Mackay, we can judge from history what is the Labor Party's attitude to tax. The Labor Party's attitude to tax can be summed up in two words—more tax. That is what the Labor Party stands for. That is exactly the point that Senator Hill made about Gary Evans.

When Labor were in office they increased wholesale sales taxes, they increased petrol excises, they increased the Medicare levy, they increased the wholesale sales tax on cars, they increased company tax. There is great amusement in the Labor Party at this because the one thing you really like and really love is to increase taxes. That, I might say, is the one thing the Labor Party is good at—increasing taxes.

There are some real problems with the current tax system. The current tax system has real problems in relation to the high levels of marginal tax on personal income. There are problems with the wholesale sales tax system, as anyone who has been close to this system clearly knows. What is most peculiar is that the Labor Party refuses to join in this tax debate. What we have is a scattergun approach day after day with various members of the Labor Party moving in and moving out of the tax debate as they are corrected by their leader, Kim Beazley.

The coalition is very clear on its principles in relation to tax reform. We want a system which will encourage people to work, to save, to invest. We believe there is widespread support in the Australian community for tax reform; there is no question about that. As I said, we support a constructive debate on tax reform.

Senator Sherry —You said that about the surcharge—it is a tax on super.

Senator KEMP —I will come back to you on that one in a minute. It is a great tragedy that the Labor Party refuses to join in. One of the Young Turks said that we want to tax the wealthy.

Senator Robert Ray —Who are the Young Turks?

Senator Kemp —One of the Young Turks said that, Robert Ray.

Senator Sherry —You taxed their super.

Senator KEMP —But what did Senator Sherry want with the 15 per cent surcharge? Senator Sherry did not want a surcharge to be placed on higher income earners and he convinced the Labor Party of that. Thank you for the interjections.

The PRESIDENT —Senator Kemp, your time has expired. You ought not to refer to Mr Evans in the fashion you did during your answer to the question.