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Monday, 24 May 1999
Page: 5156


Senator FAULKNER (3:02 PM) —I move:

That the Senate take note of answers given by the Assistant Treasurer (Senator Kemp), to questions without notice asked today.

In Senator Kemp, we have a politically wounded minister representing the Treasurer in this chamber, someone who the government does not have any faith in and who is not involved in the current negotiations with the Australian Democrats on the government's GST package. In question time today Senator Kemp was comprehensively unable to explain why, after months of hardline rhetoric from the government on its refusal to change the government position on anything, the Prime Minister now is suddenly willing to compromise. Mr Howard knows that Treasury has told him that if the GST is not applied to almost everything it will not work as a tax. Mr Howard believes that as soon as food and other items are exempted from the GST the tax system will become truly ramshackle. He knows that Treasury abhors an exemption, but that is what we are facing. This is the same Mr Howard who for a long time has given assurances that the GST was perfect and could not be changed. Those commitments will go into the rubbish bin of history, just like Mr Howard's claims that there are no losers or there will never, ever be a GST, or even his core and non-core promises. It will be interesting to see how many backflips on cast-iron commitments or long-held positions of principle there will be in the current negotiations with the Democrats.

Mr Howard has said again and again he will not budge on the issue of the exemption of food—food will not be exempted. He says he will fix the tax system. On 12 February, on Neil Mitchell's radio program, he took the Treasury line supporting the unified application of the GST on food. In that Sunday interview on 18 April he was asked, `Will you exempt food from the GST?' He said no. In Brisbane on 14 May he said, `We are not prepared to back down on food.' On 21 April Mr Costello said:

What the Democrats want the government to do, if this were accepted, would be to hire tax inspectors to go around putting thermometers into chickens. You really want a tax system where we're employing people sticking thermometers into chickens to try and run a tax system—it's nightmare on Main Street. It is not real life . . . It won't work . . . And we ought to get on with real tax reform which is taking complexity out of the system rather than putting it in.

That is what Mr Howard and Mr Costello said. And, of course, you cannot believe them. Now we have a situation where Senator Lees and the Democrats need to take whatever deal they can out of this from their negotiations with the government. We hear a lot of lectures about what is allegedly the most democratically driven party in the country. In a feature in the Sydney Morning Herald a day or so ago I saw that the Democrat rank and file are consulted continuously. One ex-staffer called it `Democracy gone mad'. The Democrats should take this deal back to their members and see what they say. Senator Lees revealed on the Sunday program that the government has suddenly reached into its bottom drawer and found a whole lot more information than was provided to the GST committee of the Senate. The government should disclose that information for the benefit of the Senate and the public. That would be consistent with the way Senator Lees has argued so often in this chamber, that this sort of material should be made public. (Time expired)