Senator CRANE —My question is to the Assistant Treasurer. The Assistant Treasurer's attention would have been drawn to recent newspaper reports highlighting the increasingly negative impact of the current taxation system on middle and low income earners. I ask: does the government plan to address the huge inequities and inefficiencies in our taxation system? In particular, will the minister outline the level and nature of support for fundamental reform of Australia's unfair tax system?

Senator KEMP (Assistant Treasurer) —Thank you, Senator Crane, for that question. Senator Crane has a reputation in this chamber for always focussing on the main issues, and again his question on tax reform demonstrates that point. Yes, I have seen a number of newspaper reports highlighting problems with our current tax system. In fact, the front page of the Herald Sun today graphically illustrates how workers will be paying more and more in income tax unless something is done very soon to radically overhaul our tax system.

The headline in the Herald Sun is: `The great tax grab', and the report goes on to say that workers face a huge tax grab. More than 2.4 million workers face being stranded on the top tax rate unless the system is radically overhauled, according to the Herald Sun. The report goes on to say:

New analysis of the tax system shows almost one in three workers will have been forced on to the top rate early in the new millennium.

The article also says:

Figures prepared for the Herald Sun by the Australian Taxpayers Association reveal that by 2003-4 more than 2.4 million workers will be paying 47 cents in the dollar, or 48.5 cents including the Medicare levy.

This and many other articles and studies have shown how our current tax system is hurting the average working Australian. Let me make it very clear: the government is strongly committed to fixing our unfair, outdated and inefficient tax system.

Opposition senators interjecting—

The PRESIDENT —Senators on my left will stop interjecting.

Senator KEMP —We are the only party prepared to take the necessary steps to overhaul our current tax system in this century and prepare it for the next. We are the only party prepared to seriously address the problems facing low and middle income earners.

In relation to Senator Crane's question, I was pleased to read a recent quote by the shadow Treasurer, Mr Gary Evans. This is what he said. This goes a bit to the nub of Senator Crane's question. He said:

We can all agree that tax reform is a good thing.

I think we were pleased to hear that endorsement from the shadow Treasurer. We wait with great interest and eagerness to see just what the Labor Party has in mind on tax reform. That is becoming increasingly vague. He went on to say, somewhat surprisingly:

If we didn't—ie. if we weren't in favour of tax reform—we would not have done so much of it ourselves in office.

I think the truth of the matter is that the Labor Party's idea of tax reform was more tax. Labor's tax reform in its last term meant putting up the following taxes. Let me list them. They increased the wholesale sales tax. They increased petrol excises.

Senator Conroy interjecting—

The PRESIDENT —Senator Conroy, stop shouting!

Senator KEMP —The Labor government increased the Medicare levy. The Labor government increased the company tax rate. They increased the fringe benefits tax, and they increased departure tax. Of course, above all they failed to deliver the l-a-w tax cuts. Labor had 13 years to make the tax system fairer, but they really fiddled and, while they fiddled, Rome burned and the tax system got worse and worse. (Time expired)