Senator LIGHTFOOT —My question is for the Minister for Industry, Science and Resources, Senator Minchin. The coalition went to the last election with a detailed policy of tax reform to replace the ramshackle and ambiguous system we have had since the 1930s. I ask the minister: what are the benefits for the resources and manufacturing industries of this overdue and very much needed tax reform?

Senator MINCHIN (Industry, Science and Resources) —As Senator Lightfoot knows only too well, mining and manufacturing are vital to Australia's economic wellbeing. Together they generate around half our export income, which Senator Cook seems to be concerned about, and they employ over a million Australians. It is a national imperative that we ensure that these industries can compete successfully internationally and that we remove all impediments to that competitiveness.

One of the biggest impediments these industries face is our current tax system. This is of course what our irrelevant opposition wants us to keep. The current wholesale sales tax is one of the most pernicious taxes on manufacturing imaginable. A well-known Australian, in advocating that we do replace the wholesale sales tax with a GST, said:

. . . it will allow a more rational indirect tax system than the current anomaly-ridden wholesale sales tax, which has multiple rates, numerous exemptions, and fails to tax the services sector.

That of course was none other than the latest star of 60 Minutes , Paul Keating, in 1985. There are any number of examples of what Paul Keating was talking about.

We had the discussion of food. We had the problem with yoghurt and whether or not it should be taxed under this system, and that had to go to the Federal Court. Ice-cream is taxed—that is a food and it is taxed—but frozen yoghurt is exempt. So we had the problem of what to do about a form of yoghurt that is delivered to retailers frozen but sold as soft-serve. The Administrative Appeals Tribunal said it was not yoghurt and therefore it was not exempt. It had to go to the Federal Court, who said the AAT were wrong.

Something as simple as a chair is taxed at two different rates—12 per cent if it is for household purposes and 22 per cent if it is for office purposes, and they have enormous difficulty working out which is which.

The wholesale sales tax system, which Labor wants us to keep, taxes household essentials like washing machines and fridges but, if you want to go to the opera, that is tax free. Toothpaste is taxed, but the brush that you put it on, under Labor's tax system, is not. This is an insane tax system for a modern economy.

What did Labor do in the lead-up to the last election? What was their plan? How did they approach what Paul Keating had said 14 years ago were the problems with the current tax system? After 2½ years of labouring away about what to do with the current tax system, what did they come up with? A grand plan to take the WST off orange juice and stick it on caviar and Lear jets. That was the product of 2½ years of intensive policy work to reform our tax system. What a joke! We recognised that we had to fix the tax system. We went to the people asking for a mandate, which they gave us, to remove your wholesale sales tax. Our plan gets rid of that plus nine other taxes which burden Australian industry.

We are going to take 4.4 per cent off the cost of mining in this country. Chris Murphy, in a report to the Senate inquiry into this issue, said that mining production would be boosted by seven per cent—employment in mining will rise by 7,000 people. Even dear Senator Cook recognises the advantages to mining. He said to the mining industry in the Senate inquiry:

There is a quantifiable—subject to advice of course—advantage to your industry, I suspect, from the ANTS package.

Senator Cook recognises that this package will be good for the mining industry—one of the most important industries in his state—but he is going to vote against it. As Senator Alston has said, why don't you take advice from the two best professionals you have ever had—Bob Hogg and John Della Bosca—get out of the mud, get out of the trap you are in and pass the package?