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Wednesday, 21 April 1999
Page: 4027


Senator PATTERSON (3:10 PM) —I hardly think the comments made by Senator Faulkner warrant my rising to counteract them.

Opposition senators interjecting


The DEPUTY PRESIDENT —Senator Faulkner and Senator Carr, please cease interjecting.


Senator PATTERSON —I do not want to waste time counteracting that personal attack on Senator Alston. It is quite obvious that, when somebody has not got the wit or the brains to actually put forward an argument, they have to be involved in personal attack. What the Labor Party are doing is failing to face up to the fact that they failed in government to reform the taxation system. All they did was to rely on the wholesale sales tax system, and the taxation policy that they took to the last election is now in shambles. They were going to have capital gains tax on capital gains items purchased before 1985; they got rid of that days after the election. They were going to have a tax on four-wheel drives; they got rid of that days after the election. All that is left of their tax policy is to take wholesale sales tax off orange juice and put it on caviar. That is all that is left of their policy: a shell. They have no ideas.

Gary Johns, a former Keating minister, said in the Herald Sun on 25 November—and I am sure he would say it again:

Labor promised then not to raise taxes and to provide income tax cuts.

This is before the 1993 election. He continued:

Its Budget raised wholesale sales taxes and delivered only half of the promised tax cuts.

They are crying crocodile tears on the other side saying that people are not compensated when they have the gall to raise wholesale sales tax and provide not one cent of compensation. In fact, they failed to give the l-a-w tax cuts that they said they were going to give. So to stand up here today and say, like Senator Faulkner did, that Senator Alston did not have the answers is absolutely outrageous. As Peter Costello said in the Financial Review on Monday:

This is the first time a government has provided real assistance to low-income earners to cover the effect of indirect tax changes.

If the Labor Party were prepared to own up to that, and if they were so concerned about low income families and people on pensions, they would look to the future and say, `We need a taxation system that is sustainable into the future. We need a taxation system that relies on an expanding sector of the economy, not a contracting sector of the economy as we now have with taxes based on goods.' As services expand, we end up with a larger pool of money and the premiers—Labor premiers included—have admitted that; Labor, at the federal level, is totally out of step.

Opposition senators interjecting


Senator PATTERSON —Madam Deputy President, they all have an opportunity on the other side. Would you ask them to desist from interjecting?


The DEPUTY PRESIDENT —All interjections are disorderly, Senator Murphy, and I call you to order.


Senator PATTERSON —If they were as concerned as they say they are about people on low incomes, they would be looking to the future. They would be looking to a tax system that will provide pensions into the future, that will provide health into the future, and that will provide the states with the money that is going to be needed for people with disabilities, for hospitals and for roads. But they have not got a vision. They cannot see beyond their policy bellybutton; in fact they do not have a policy to put forward. The only policy they have on tax, as I said, is to take wholesale sales tax off orange juice and put it on caviar. It is absolutely outrageous.

The ALP has forgotten its former leader's support—and should we mention him, after the speeches we heard at lunchtime today? But the former Labor Prime Minister recognised the need for taxation reform; the current Leader of the Opposition cannot bring himself to support taxation reform. In particular, the former Labor Prime Minister supported a consumption tax. Paul Keating highlighted the three main advantages of a consumption tax, and I will repeat them. First, it would allow a more rational indirect tax system than the wholesale sales tax system. But what do the ALP do? They stick to the wholesale sales tax system. That is their policy. Second, it would allow greater tax revenues to be generated for the benefit of individuals' tax rate reduction, and it would generate tax from those who evade or avoid income tax. Third, it would provide a useful net dividend for distribution to the rest of the community. But they have turned away from that. They have failed to acknowledge that there is a need for taxation reform in this country and would hold Australia back. They do not care about the future of our social security system, the future of our health system, or the future of the states and their need to provide services to the community.


Senator Ferris —Working families.


Senator PATTERSON —That is right. Senator Ferris reminds us that this tax package is for working families. It is the first time, as I said, that a government has provided real assistance to low income earners to cover the effect of indirect tax. It is about time Labor got into step with their state colleagues.