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Wednesday, 21 April 1999
Page: 4022

Senator GEORGE CAMPBELL —My question is directed to the Assistant Treasurer. Has legal advice been sought on whether the government's proposed mechanism for locking in the rate of the GST is ineffective and whether the rate of the GST can be simply changed by an amendment act of the Commonwealth parliament? If so, will the government release that advice and, if not, why not?

Senator KEMP (Assistant Treasurer) —I thank Senator George Campbell, a former Vice-President of the ACTU, for that question.

Senator George Campbell —That's right.

Senator Conroy —And proud of it!

Senator KEMP —He had to be famous for something, so I felt I would refer to it. If you like, I will mention what Mr Paul Keating said about George Campbell, but I won't bother to do that.

The PRESIDENT —Senator Kemp, I draw your attention to the question.

Senator KEMP —We have put in place a mechanism which will provide great assurance to people about locking in the GST rate of 10 per cent. Let me contrast this with the fact that there is no lock-in approach in any act on sales tax or excise duties. That is why the Keating government could come into this parliament in 1993 and increase sales taxes across the board.

Senator George Campbell —Answer the question. Did you seek legal advice?

Senator KEMP —Your colleagues, Senator Campbell, increased sales taxes across the board and substantially increased the fuel excises. There was no lock-in at all. These increases were passed by the Senate with the help of the Democrats.

The next point I would make is that, having imposed this huge rise in indirect taxes, not an element of compensation was offered. We have had a great deal of discussion in the last couple of days about compensation. In 1993 when the Labor Party came back into office they broke all their election promises. That is in contrast to us, Senator Campbell, we are trying to keep our election promises; we are trying to encourage the Senate to make us keep our election promises. You came in in 1993—

The PRESIDENT —Senator, you should address your remarks to the chair.

Senator KEMP —Madam President, the ALP came in in 1993 and broke their election promises. There was no lock-in for the sales taxes and no lock-in for the excises. You would be well aware that the mechanism we have put in place gives great assurances to the public. After all, any rise in the GST would require the approval of all state premiers—that is what it would require—and it would require the approval of the Commonwealth government.

Senator Faulkner —Have you sought legal advice?

Senator KEMP —Of course, it would also presumably require the approval of the Australian Senate. We are very confident of the mechanism that we have proposed.

Senator Faulkner —Have you sought advice?

The PRESIDENT —Order! Senator Faulkner.

Senator KEMP —We are very confident of the mechanism that we have proposed. It is certainly welcomed by the state premiers; it is certainly supported by the public. It is in absolute contrast to the wholesale sales tax, which is the Labor Party supported tax.

Senator Cook —Answer the question.

Senator KEMP —Senator Cook chips in. Well, Senator Cook's second-most famous quote—

Senator Faulkner —Madam President, I raise a point of order. I wondered if you had noticed—as I have and as I am sure any objective observer would have—that Senator Kemp has made no attempt to answer the question of whether the government has sought legal advice on the proposed mechanism for locking in the GST. He was asked not only that, as you would be aware, Madam President, but also, if that is the case, whether the government would release the advice; and, if they are not willing to release the advice, why not. He has had three minutes. I would ask you to direct him to actually have a crack at answering the question.

The PRESIDENT —Senator, you know that I cannot direct him on how to answer the question. He must keep to the topic of the question that he has been asked, and I believe he is doing so.

Senator KEMP —Thank you, Madam President, for that ruling. I thought that was an entirely appropriate ruling. I am making the extremely important point, which the Labor Party do not seem to understand, that the ALP's wholesale sales tax has no lock-in approach at all. The wholesale sales tax can be increased at the government's will and with the approval of the Senate, which happened in 1993.

Senator Cook —You are a disgrace.

Senator KEMP —Senator Cook says, `You are a disgrace.'

The PRESIDENT —Order! Senator Cook, I ask you to withdraw that interjection.

Senator Cook —I withdraw, Madam President.

Senator KEMP —For Senator Cook to make any such comment when Senator Cook is the man who is on record as saying—

Senator Faulkner —Sit down.

Senator KEMP —He is on record—

Senator Faulkner —Sit down.

Senator KEMP —as saying that the Labor Party is a high tax party—

The PRESIDENT —Order! The time for answering the question has terminated. Senator Campbell.

Senator Alston —Madam President, is it appropriate for Senator Faulkner to call out, `Sit down,' on a number of occasions? I would have thought that is a matter for the President.

The PRESIDENT —No, it is in breach of the standing orders.

Senator Faulkner —Madam President, I raise a point of order. Is it appropriate for Senator Alston to stand up here and address the chair without taking a point of order or anything else? He has been out of order doing that today; he does it consistently. You should not recognise him in those circumstances and you know it, Madam President. He is not taking a point of order; he is standing up and taking the call in the Senate; and he should not be recognised by you presiding in the chair.

The PRESIDENT —Senator Faulkner, you were out of order, and Senator Alston was out of order in the way he approached that matter. I call Senator George Campbell.

Senator GEORGE CAMPBELL —Madam President, I ask a supplementary question. Given that the minister totally ignored the initial question, I ask: does the minister agree that the only truly effective, legal lock-in of the GST rate at 10 per cent would be a constitutional amendment? Isn't it the case that the Howard government is cynically relying on one or more of the states and territories being in pre-election mode and therefore being unwilling to agree to a rate rise? Is the government arguing that it is feasible to have an effective lock-in mecha nism between the states and a bucket of money?

Senator KEMP (Assistant Treasurer) —I must say it is very unkind of Senator George Campbell to refer to Premier Carr, Premier Beattie and Premier Bacon in that fashion. I can understand, Senator Campbell, that you may be very upset with the approach that they have taken to the GST, because they are very supportive of the package and the agreement that we have reached with the premiers.

Senator Cook interjecting

Senator KEMP —`Tell the truth,' says Senator Cook. If I recall correctly, it was Premier Carr who indicated that the government had a mandate. Governments that go to an election with a clear policy have a mandate to pass their legislation. Senator George Campbell, we think the mechanism we have is a very effective one. Certainly in relation to the Labor Party's wholesale sales tax there is no lock-in at all, so I believe that what we have done is the appropriate way to go. (Time expired)