Senator COOK (3:03 PM) —I move:

That the Senate take note of the answers given by the Assistant Treasurer (Senator Kemp) and the Minister for Schools, Vocational Education and Training (Senator Ellison) to questions without notice asked by Senators Bishop, Conroy, Jacinta Collins and McKiernan today, relating to a goods and services tax.

Senators will know that during the lead-up to the last election some famous words escaped the lips of the Prime Minister (Mr Howard). They are captured on television for the world to see. In regard to the question of a GST: `I will never ever introduce a GST.' We have now $36 million of Australian taxpayers' money being set aside in the current budget to prepare the Australian people for the introduction of a GST. The Prime Minister said, `Never ever'. The budget says $36 million of Australian taxpayers' money, $10 million of which is to run a television campaign to sell the GST to a reluctant Australian electorate.

When this government talks about tax reform, it means a GST. `Tax reform' is the nice language they use to coat the bitter pill of a goods and services tax in this country. In question time today, when posed several questions about what they mean, what they intend and when they will introduce such a formula, they ran scared.

It is appropriate, therefore, for the opposition to canvass some of the myths that the government has given birth to about a GST. One of the biggest myths is that those who avoid tax in Australia will be caught under a GST, that is to say, the black economy in Australia will be wiped out. We know the evidence. Of all of the 26 countries in the OECD, Australia's black economy is amongst the smallest. What is the distinguishing feature of the countries with large black economies? The distinguishing feature is that all of them have a GST. It does not follow that when you introduce a GST you wipe out wholesale tax avoidance in the black economy. In fact, tax avoiders who are able to save money and find smarter ways of avoiding tax have a way of doing so even with a GST regime. So put a cross against the idea that you overcome tax avoidance. In any case, we know that this government will not overcome the tax avoidance engaged in by Senator Parer because it will not introduce a law on trusts to do so.

What is the second big myth about a GST? The second big myth is that it will cut the costs of imports to exports and our export industry will be able to earn more dollars overseas. That is also a myth because we know that the exchange rate changes to correct the competitive advantage. The competitive advantage is nil. The competitive advantage to exporters becomes nil because of a variable floating exchange rate. We know that is to be a fact. So will there be more jobs under a GST? No, there will not be any more jobs under a GST. Why do we not go back to what Labor did when we supported manufacturing industry in this country? Manufacturing exports during the decade of Labor government grew by 15.7 per cent. What are they growing at now?—about three per cent. Who got it right on creating jobs through exports? We did. Who wants to get it wrong? You do. So let us cross off the list the idea that the GST will somehow improve Australia's competitive position.

Let us go to the other great myth about a GST. The government says they will introduce it and it will remain fixed—it will not increase. We know all about that one. Of the 23 countries in the OECD with a GST, 21 of them have increased it after it was introduced. We know that John Hewson, a former Liberal leader, shone the light of truth upon you lot when he said, `Unless the GST is at 15 per cent, no-one will believe it, and if it is at 15 per cent, that is the level it should be at. Anything less is not enough.' A former Liberal leader exposed the current Liberal government. Who believes the myth from John Howard—the man who said, `Never ever will I do this'—when he says, `But I won't increase it when I do'? So that is another myth.

Who wants a GST? The big end of town—the business community. They will pay the same tax as we will and as ordinary income earners in this country will. The rich pay the same tax as the middle and low income earners in this country. They say that is fair. Of course, it is fair for them, but it is not fair for the ordinary Australian because the ordinary Australian pays more out of their wage packet for housing, food and clothing than do wealthy Australians. They will all be taxed at the same level by a GST on the costs of food, clothing and housing. (Time expired)