Senator COOK (4:37 PM) —This is the first brace of gambling amendments to the package of GST bills. Minister, given the way in which the debate in the chamber has just gone—that is, procedurally—there seems to be an acceptance that we will deal with the high-roller amendments that the government proposes to the GST legislation when we arrive at them in the pack and not under this heading.

Senator Kemp —That is not the way I would describe them, but I understand what you are saying.

Senator COOK —That is what I understood you to say, and it seems that that is a point of view that is accepted by at least Senator Murray. Before we move to the substantive nature of the amendments before the chair now, perhaps I should say something about the high-roller amendments which will put you in a position to answer questions when we do arrive at the other high-roller amendments.

I want to draw the minister's attention to a report in the West Australian newspaper of last Friday—I cannot distinguish the page but I think it is page 12. It has the headline `Court firm on casino GST stance'—that is, the Premier, Richard Court. I will quote selectively from the report. You will no doubt turn up the whole thing so I am not trying to mislead you with my selective quotes. Starting with the first paragraph, it states:

Burswood Casino will not be granted any State compensation if the Howard Government fails to get goods and services tax concessions for high-roller gamblers passed through the Senate, according to Premier Richard Court.

That is the opening paragraph. The report goes on to discuss the whole issue of what the state government will do and further states:

Mr Court told the Legislative Assembly he did not believe the GST would affect revenue received by the State Government from Burswood.

The article quotes Mr Court as saying:

"Now I appreciate that there are some difficulties in the way the legislation is going through the Parliament."

He goes on:

"But in the balancing that takes place to make sure that the States have their revenues protected, we do not foresee any problems."

When we come to the high-roller amendments, in chief—if I can describe them as that—the minister's explanation, up to this point, has been that if the Senate defeats the high-roller amendments it will be up to the state governments to make the adjustments. At least one state government, if the Premier is to be believed, is saying that they will not make the adjustment. I repeat what the state government said:

But in the balancing that takes place to make sure that the states have their revenues protected, we do not foresee any problems.

That would suggest that they will not make an adjustment—that there will be no diminution to state revenues. The point of view—I will not describe it as a principle; I think that is a terrible notion—that the federal government has accepted from the Casino Association, when it lobbied the government to include these amendments, is not shared at state level by the West Australian state government.

I understood you to say, and I would have to check the Hansard record, that this was a matter of a federal-state agreement and that you assumed or you presumed that if it was not done at federal level it would be done at state level. I take this opportunity to draw your attention to it, Minister, because when we come to the high-roller amendments I will have a series of questions for you on that matter, and I do not want you to be caught unawares. They will be serious questions and we will be intent on pursuing serious answers to them when we get to that point.

I will proceed now to the amendments that are before the chair at the moment. One of those is government amendment No. 7—the seventh of 128 amendments to your own legislation, Minister, on the GST. Amendment No. 7 says:

. . . after clause 126-32, insert:

126-33 Tax invoices are not required for gambling supplies

(1) You are not required to issue a *tax invoice for a *taxable supply that you make that is solely a *gambling supply.

(2) This section has effect despite section 29-70 (which is about the requirement to issue tax invoices).

The government is proposing, should we assent, to insert those provisions into the bill at this stage. I understand how the government intends to apply a GST to gambling—that is, a GST is applied to the margin. The losses of the patrons of a casino are regarded as sales by the casino for that purpose, and you deduct the losses by the casino against the losses by the patrons to get the net advantage to the casino and then tax that.

Here we have a provision referring to tax invoices. If I am a $10 pokie player and I lose $10 on the pokies, an invoice will not be issued to me. Under this law, it would be technically a sale worth $10 by the casino. I have lost it but, technically, it would be a sale by the casino of $10. How will you keep track of what the casinos are rebating high rollers under this provision for an invoice? Because the way it operates—I think this is a settled matter between us; it is not a disputed matter—is that a high roller, defined as someone who gambles $500,000 to $5 million a throw, gambles at whatever game of chance they choose. Where they win, they take their winnings and run. Where they lose, in order to keep their custom—presumably, so that they can win more—the casino rebates them part of their losses. Say they are flipping half a million dollars on a game of chance and they lose, that for tax purposes is regarded as a half-million-dollar sale for the casino and is taxed.

But where the casino then rebates them $300,000 to soften the blow and encourage them to keep coming back, that means the sale by the casino, the actual loss borne by the high roller, is $200,000, not $500,000 as was wagered. If you are not issuing each of those high rollers with an invoice, as in that case—it is a similar question now to Senator Murray's—how would you keep track of what the amount of rebate is that casinos are giving to high rollers and whether the government is in a position to make a social judgment about whether the level of the rebate is fair, given that it applies only to people in this category and not to anyone else?

Senator Murray —Or whether it is true.

Senator COOK —I take that interjection from Senator Murray, because it is to the point: whether the level of rebate is reported accurately and truthfully. How will the government be in a position to know, if it is just going to take the casino's word for it? What degree of transparency will be able to be exercised in this? To extend that question one step further, how will we in this parliament, and through us the people of Australia, know what amount of money could have been collected in tax because of the GST but was forgone by the government in recognising the practice of casinos to rebate high rollers in the manner in which they apparently do?