Senator McKIERNAN (3:23 PM) —With regard to the remarks of the previous speaker, Senator Ferguson, I am not one of the people in this chamber who can be accused of getting up here and scaremongering in the past, and I am not going to do it at the moment. What I am going to do, though, is something quite unusual. I am going to quote from the Daily Liberal . This is a newspaper that operates in the western district of New South Wales. It is not within my constituency but, because of its name and because of what the editorial of yesterday says, it is well worth while reading it into the record to see where this scaremongering is coming from and to see where the facts and the truths, and where the fears of the charitable organisations, are coming from. It will not take very long to read. The editorial says:

The western region branch of St Vincent de Paul Society believes it will cost $40,000 to comply with GST regulations when they come into force on July 1, 2000.

This particular case, which won't be uncommon among charities and other community non-profit groups, highlights the difference between the current system of exemptions and a system immersed in paperwork.

At the moment—

Senator Ferguson should listen to this—

registered charities and some other groups are exempt from paying wholesale sales tax. It's a fairly simple procedure requiring a registration number and little or no paperwork during the transaction.

Under the Federal Government's GST guidelines there is a significantly more complex system which will tax corporate sponsorships, fetes, food vouchers, refuges and even sheltered workshops.

The Australian Tax Office has admitted GST compliance costs will eat into charity funds and volunteers will need training to cope with GST paperwork and personally bear the additional out-of-pocket expenses.

It is a significant quote coming from the Daily Liberal . I believe it is quite an accurate portrayal of the fears that abound in our community of those organisations which provide such a service to the Australian community.

Even Mr Costello has heard of these fears. Yesterday in the House of Representatives Mr Costello tried to calm nerves, but what he also did was to actually tell it like it is. He has told the charities that operate in Australia that, whichever way they turn, they are going to get it in the neck. They are going to get it in the neck because if they register that they have over $100,000 in inputs, they will have all the associated paperwork. If they do not have $100,000 in inputs and seek not to register, then they are going to be hit with the GST on the inputs. So whichever way they turn they are going to cop it—they are going to cop it going and they are going to cop it coming back as well. Today's Adelaide Advertiser says:

And Mr Costello said large charities with big turnovers would still escape the tax by separating their individual activities into units worth less than $100,000.

But by doing this, charities would still be caught in the GST net because they would not be allowed to claim the rebates for the GST on products they purchase.

For example, a parent group with a turnover of less than $100,000 would still have to pay the GST on items such as some foods for the tuckshop, raffle prizes and clothes for the uniform shop. The group could sell the items GST-free but would not be able to claim back any of the GST it paid for the stock.

As we approach the last year of the current century, Ebenezer Scrooge is well and truly alive. But what is the identity of Ebenezer Scrooge? Is it John Howard? Is it Mr Costello? Or is it Senator Lees?

The DEPUTY PRESIDENT —Please do not reflect upon a member of the other house or a senator.

Senator McKIERNAN —The answer to that question is still to be found out.

Question resolved in the affirmative.