Senator COOK (3:53 PM) —I would like to make a few remarks about this legislation which is returned to the Senate due, I believe, to the incompetence of the government, in particular the Assistant Treasurer, Senator Kemp, who botched his own government's amendments in this place, thus necessitating further amend ments in the House which it is now up to the Senate to improve.

For a package that was perfect and did not need any changes, it is interesting that in the first place we saw 128 amendments, including the now infamous million dollar handout to Crown Casino, which was fully supported by the Australian Democrats. We are still dealing with government amendments to the so-called `perfect package' on tax reform and we can be sure that this entire package of legislation will still need to be amended many more times in future. I fear that the A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999 is the first of many remedial bills to correct the errors that the government incurred in forcing through its earlier legislation.

As we are well aware, the Senate has already dealt with hundreds of government amendments which were added to as a result of the deal done with the Australian Democrats. One thing for certain is, as I have said, that we will get many more such amendments in future. Incredibly, these amendments are a result of the government having to amend its own amendments because they were completely botched by the Assistant Treasurer, Senator Kemp, during debate in this chamber. But that is not the end of it as these amendments will soon be followed by hundreds of regulations to give effect to the GST package.

Only last week we saw proposed amendments to the GST treatment of the finance sector with respect to financial products. What is more, all these changes are to be implemented by regulation. One can only think that the government does not want to have to bring in another set of amendments and leave it to the hapless Senator Kemp to explain why the government got it wrong again. I say to the government in regard to making legislation by way of regulation that the opposition will be watching very carefully how the regulations are drafted and will not hesitate to raise issues that may be better dealt with by legislation as opposed to sneaking in regulations to cover up the government's incompetence.

I turn to the so-called tax reform package. The GST package is, of course, not tax reform. It is an unfair tax change where families will face a new tax on almost everything they buy. We were told by the government that one of the key objectives of the package was to remove state taxes. That objective, by courtesy of this legislation, is now in tatters. What Australians will now face is a GST and most of the state taxes will remain as well. The financial institutions duty will remain for the first year of the GST. In addition, the debits tax on bank accounts will remain for at least five years. In reality, this could mean forever. The other taxes such as commercial property transfers have been confined to the never-never and, to paraphrase the Prime Minister's immortal misleading of the Australian people, these state taxes will never ever be removed.

The Australian people know that the GST is not tax reform. Even the economic commentators admit that this package is not tax reform. For example, what did Terry McCrann—an economic pundit not known to have Labor sympathies—have to say on 9 June in Herald Sun? He said:

Remember how this reform was going to sweep away a whole raft of supposedly inefficient state taxes? Apart from the taxes directly related to the GST, they mostly now stay.

His conclusion was:

The package is actually anti-reform.

Those words, I remind the chamber, are from a most conservative political and economic commentator. Not only is the package not tax reform but it is actually anti-reform.

Let me now go to the substance of the matters before us. The major amendments in this package of amendments to the A New Tax System (Commonwealth-State Financial Arrangements) Bill 1999 —that is, numbers 1, 2, 5 and 11—concern the appending of the intergovernmental agreement to the legislation. Labor does not oppose these or any of the other proposals circulated by the government. I will reflect on the history of this agreement.

There was an agreement that was reneged upon by the Prime Minister. He deliberately sold out the states when he made the infamous agreement with Senator Lees. The states were then forced to sign up to a third-rate deal. There was no consultation, simply an ultimatum from the Prime Minister. We do not have time to discuss the agreement in detail but I will make this point: the agreement lasts only as long as the Prime Minister and Treasurer decide it will. The Prime Minister's actions demonstrate that the GST can be varied without the involvement of the states, despite the government's rhetoric to the contrary.

The other matter I wish to raise concerning these amendments is amendment No. 7. This amendment proposes that the GST base can be changed only in order to maintain the integrity of the GST base and prevent tax avoidance. That is pretty rich coming from a government which only six weeks ago massively wrecked the integrity of the tax base in its deal with the Democrats and simultaneously watered down the anti-avoidance provisions in the GST legislation. In effect, we have the government admitting that tax avoidance is possible yet it has purposely watered down the anti-avoidance provisions in the main bill to make it harder for the commissioner to prove avoidance. Where is the continuity in that?

This should come as no surprise, as we know where this government's priorities have been—multibillion GST handouts to the high roller mates of Ron Walker and Lloyd Williams down at Crown Casino, plus weaker anti-avoidance provisions for tax avoiders, another favoured constituency of the Liberal Party. And all this was achieved with the support and the knowledge of the Australian Democrats. So we know where their priorities now lie too.

In conclusion, the opposition support these amendments, but are getting mightily sick and tired of having to clean up the mess created by Senator Kemp and his failure to put through proper amendments in the first place.

I also ask the minister, with respect to amendment No. 7, what constitutes a change of an `administrative nature' for the purposes of maintaining the integrity of the GST base or to prevent tax avoidance. Further, can the minister advise, as these amendments impact on the states, whether the states were consulted over the amendments, and, if so, what their response was? I conclude my remarks with those two questions and I look forward to the answers.