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Wednesday, 8 November 2000
Page: 19401


Senator McKIERNAN (2:00 PM) —My question is directed to the Assistant Treasurer, Senator Kemp. Has the minister seen the views of former Liberal Party stalwart, Mr Peter Searle, in last Sunday's Herald Sun, where he stated that he was so sick and tired of being the government's unpaid tax collector that he had sent the Treasurer a $1,200 invoice for work done on behalf of the Commonwealth government? Do the Howard government support their former Liberal Party branch president when he says:

Hopefully, if enough people send in their own invoices ... the fools who devised this scheme will get the message... Peter Costello said he was going to free us from red tape—he's buried us in it.

If former Liberal Party stalwarts think your GST has buried them in red tape, why should struggling small businesses think any different?


Senator KEMP (Assistant Treasurer) —I thank Senator McKiernan for that question because it gives me the chance to clear up a number of misconceptions which underlay that particular question, the questioner and the person whom you were quoting. Let me get a couple of things clear that some people may not be aware of; certainly, Senator Cook is not aware of this, but every other Labor person apparently is. The first point is that the Labor Party now supports the GST. We want to avoid any confusion because this is a tax system that the Labor Party now supports. You did go to the last election, Senator, with a policy of `A fairer tax system with no GST'. You have actually rolled back `with no GST', and from 1 July the Labor Party supported the GST. So you changed your mind, and that is the first point I would make.

The second point is that I accept the fact that you have done a backflip on the GST in the last 10 months, but in relation to the other aspects of the business tax system, the Labor Party signed on to them not just on 1 July this year but two years ago. I think if you read this policy dealing with things such as PAYG and how you consolidate the various withholding taxes which are being paid into the one account, you will see that you are actually supporters of the BAS system too.


Senator Cook —Not with a GST.


Senator KEMP —I do not know what we can do about Senator Cook. I frankly think Senator Cook is the only person in the Labor Party who seems to think that the Labor Party does not support the GST.


Senator Faulkner —No, he's absolutely right. That's two of us.


Senator KEMP —There are two of them. I wish you would actually tell Mr Simon Crean that and give him that message. I know you people in the Senate occasionally go off on your own frolics. We have seen that before with Senator Sherry in a number of areas where he seems to be quite contrary to the policy being run in the lower house. The first point I am making is that this is actually your policy. I do not think you understand that, although the public understand it. I think the public will be bemused by the fact that somehow you seemed to be so opposing of the GST and now you are supportive of it. You seem to be now attacking the BAS statement, although that was your policy two years ago. That was the policy which you went to the election on two years ago.

Let me now come to the specifics of the question. Senator McKiernan, I am a bit concerned because time is on the wing and I may not get through this. I have got some very good information for you in relation to red tape, so I wonder whether you would ask me a supplementary question so I can deal with those issues as well. The question was raised in relation to red tape. Let me make it very clear that the government has implemented a large number of specific measures which in fact reduce red tape for business. The first point is that we have presided over some sorely needed changes in the tax system. As part of this change, we have introduced a wide range of measures which are specifically designed to reduce red tape. The senator looks a little puzzled. Let me just say that in the area of the capital gains tax, for example, the government has removed the complex indexation averaging rules and replaced those with a 50 per cent reduction. Senator, that happens to be your policy too. You actually support that, and you supported that because it was a good idea and it helped to simplify the tax system. (Time expired)


Senator McKIERNAN —Madam President, I am tempted to ask a supplementary question but, before that, I should ask the original question. Minister, why won't you answer a question? In addressing that, when will the Prime Minister honour his promise to cut small business red tape, now made twice as bad by the GST?


Senator KEMP (Assistant Treasurer) —Senator, that is not correct. The Prime Minister has in fact answered the question. First of all, thank you for the supplementary, because I asked you to give me one and I appreciate that. With the various reporting arrangements, we have cut down many contacts that people in business would have had with the tax office compared with the old system. Let me just go into a number of other areas. I mentioned the capital gains tax system, and I mentioned the BAS system, which has helped by consolidating all the payments onto one form for many businesses. We have helped cut down the number of contacts that a business would have had with the tax office. Let me mention a number of other areas. In the area of corporate groups, for example, the government is introducing measures to allow corporate groups to consolidate their taxation accounts and effectively operate as one taxpayer, bringing very substantial benefits in the area of simplifying the tax arrangements. To assist small business, the government is introducing a simplified tax system. (Time expired)