Senator MURRAY (6:02 PM) —Before I commence, I might make the remark, having some experience in matters of war and security, that it strikes me as a bit odd that the person guarding you would be 50 metres away from you in the aeroplane, which I think adds a point to what Senator Carr was saying. Aeroplanes are not always safe these days. If you are to be guarded, then the person guarding you needs to be a lot closer than I hear that they were. With that remark stimulated by Senator Carr's thoughts, I will turn to the bills before us, the Appropriation Bill (No. 3) 2003-2004, the Appropriation Bill (No. 4) 2003-2004 and the Appropriation (Parliamentary Departments) Bill (No. 1) 2003-2004.

These bills are largely uncontroversial as they approve a range of government commitments made since the budget in May last year. As hopefully all my Senate colleagues will be aware, the Democrats were founded with a principle that we will not block government supply for the ordinary services of government and we pledge ourselves not to do so. I fear that one day a Labor government will be faced with a combination of Liberals and Greens that will share only one thing in common: they will vote together to block supply of the ordinary services of government. Recently there was a vote in this chamber to indicate where people stood on that and it was notable that it was one of the few occasions the Australian Greens sat with the government. They sat together on the principle that they would vote together to block supply. The Democrats will not do that.

I turn to the appropriations bills. The Appropriation Bill (No. 3) 2003-2004 appropriates $945 million for government functions including $236 million for peacekeeping in the Solomon Islands, $86 million for drought assistance, $75 million of indexation adjustments for the Department of Defence, $65 million for the Australian Federal Police in Papua New Guinea, $39 million for the MedicarePlus package and $19 million for Australia's contribution payments to various international organisations.

The Appropriation Bill (No. 4) 2003-2004 is primarily directed towards payments for states and territories. It includes a further $188 million for drought assistance and $37 million for the Tough on Drugs initiative. It also includes equity injections of $47 million and $37 million for the Australian Federal Police and the Australian Customs Service respectively.

As it is the last sitting day before the budget, I thought it might be worth while for me briefly to tell you the Democrat view with respect to some of the various tax loopholes that we would like closed. We will be releasing some detailed budget suggestions later this month. As always, we will try to be economically, socially and environmentally responsible. All our spending measures are fully costed, but with our resources we do lack the modelling capabilities of the government.

In developing our policies we listen to numerous business organisations, community groups and, of course, pre-eminently the Australian people. Last night I was otherwise engaged and unfortunately was unable to attend a function held by the Institute of Chartered Accountants. Contrary to their general reputation, I understand they had a lot of fun. However, I did obtain some polling statistics that the accountants and the Roy Morgan organisation provided last night. In response to the question of whether more public funds should be spent on health, 94 per cent responded with either `agree' or `strongly agree'. Similarly, when asked whether more public funds should be spent on education, 94 per cent of respondents said `agree'.

Does this mean that Australians want to pay more tax for health and education? I have never seen a survey saying that the majority of Australians want to pay more tax. In fact, 55 per cent of those surveyed thought that the top tax rate of 47 per cent for those earning over $62,500 was too high. Only 23 per cent of respondents wanted the top tax rate to be higher. So 94 per cent of Australians want more public funds for health and education but only 23 per cent want the top tax rate increased. Is this an irreconcilable inconsistency? I would say no, because the government can raise much more revenue and cut income tax rates if it chooses to close some loopholes and end some tax concessions.

Just dealing with a few, the Democrats have long advocated broadening the tax base. Like John Ralph, we would like to remove the excessive tax concessions for company cars. This would raise up to $1 billion a year and would have as a by-product the promotion of cleaner, more sustainable transport systems for our major cities. We would like the government to implement the Ralph Review of Business Taxation recommendation that trusts be taxed as companies—that all business activity be taxed equivalently regardless of the entity structure. This would improve the integrity of Australia's tax system and be a positive first step in tackling the prevalent culture of tax avoidance.

Another $1.2 billion or thereabouts could be raised by reforming negative gearing. We have advocated this position for a decade—increasingly stridently over the last five years. At first we were ignored. Now there is a deluge of support. It is not only the Democrats that are advocating this reform; groups as diverse as ACOSS, the Reserve Bank and the Centre for Independent Studies have all pointed out that negative gearing, the generous depreciation rules and the capital gains tax concessions have combined to create an investment-driven housing bubble, distorted the economy and minimised tax unfairly.

The Economist recently described the Australian economy as being similar to that of America before the dotcom bubble burst, largely because of the terrible mistake the government made in not following international precedents by ensuring that negative gearing was properly restrained. This issue needs to be addressed. Reforms to the tax treatment of negative gearing and other property concessions would be economically responsible. This is important but, even more importantly, by proposing changes such as these, the Democrats are giving the Australian people what they really want. That brings me full circle to those polling figures. We can increase funding for health and education without increasing taxes if the government will attack waste in expenditure and drastically reduce unnecessary, unwarranted and unfair tax concessions. To use the Treasurer's mantra at the time of the new business tax system: we need to broaden the base so that we can lower the rates.