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Tuesday, 26 May 1987
Page: 3334

Mr TUCKEY(5.44) —I thank the honourable member for Canning (Mr Gear) for his invitation to prove, apparently with some airy fairy figures, that the Government is the biggest spender and biggest taxer in the history of Australia. The simple figures are that, in the last Fraser Budget-the only Budget inherited by the Government because it had to administer it for three months-expenditure was about $49 billion and taxation about $44 billion. The Budget about to be concluded four years later is raising $71 billion in taxation and is predicting expenditure of about $74.5 billion, but as is traditional with this Government--

Mr Gear —It is a bigger economy.

Mr TUCKEY —Yes, it is a bigger economy-the Government borrowed $2.4 billion to make it a bigger economy. It has created a debt-led recovery for which every ordinary Australian is now paying the price of 20 per cent interest, when people in Japan are paying 3 per cent and 4 per cent and in America and the United Kingdom 6 per cent or 7 per cent interest for their home loans, compared with 15.5 in this country. That is the legacy of this Government's big spending. It is a pity that the honourable member for Canning has chosen to leave the chamber rather than be assailed by further statistics.

Mr Gayler —What about the figures for local government?

Mr TUCKEY —Is the honourable member talking about Mr Grace and his air conditioners? I will talk about that. If the honourable member keeps talking about local government, I will tell him how the Ombudsman treated one of his members. Let us return to the comments of the honourable member for Canning. He lectured us about pensioners. He suggested that this legislation, which will apply sales tax to returning passengers, would help them. I refer to `passengers' because I think that the honourable member is of the view that the only people that will be subject to the sales tax measures for overseas travellers are returning Australians. Of course they are not. As the Minister for Science (Mr Barry Jones) made quite clear in his second reading speech, the effect of the legislation will be to allow passengers arriving in Australia a sales tax exemption for duty free goods up to a value of $400 for those aged 18 and over, and $200 for those under 18. In other words, under this legislation every person entering Australia cannot bring in goods to a value of more than $400 or they will be subject to the taxes of Australia-in this legislation, the sales tax. That will be quite interesting. Those passengers may be able to afford it-they may not be pensioners; they may be the rich sparkler-wearers which the honourable member for Canning mentioned. I have been a passenger to a foreign country and I wonder how much those visitors will welcome the bureaucratic nightmare that they will have to go through to get into this country.

The honourable member for Canning said that the Government had been out selling Australia overseas. I suggest that passengers will be confronted with a barrage of computers. Their cases will be inspected not for drugs or the other items in which decent people do not deal, but to discover the value of their watches and whether they propose to leave them in the country. They might be forced to give numbers and other evidence in case they try to take them out of the country. I am not sure about the regulations because we have not yet been told how they will work. Those passengers will be confronted with a bureaucratic nightmare. The one thing that annoys incoming passengers, especially after long flights from countries such as America, is a queue to get into the country. We have all learned about those queues and millions of dollars have been spent trying to alleviate them.

The Industries Assistance Commission, when considering the issue, said that the value of a visitor is what he spends when he is here-get the visitors through the turnstiles as quickly as possible. There will be a search for a mere $20m out of $7.5 billion expenditure-in fact, $8 billion next year. How can the proposed policy be applied without time delays? I remind the honourable member for Canning that I am referring to the visitors to Australia to whom he and his colleagues have supposedly been selling Australia, and who will be very cranky about the queues. They may decide to go to the very close duty free areas that they can walk through speedily, provided that they can cover the normal quarantine arrangements.

Those are the issues that this Government overlooks in its grasping for the last cent to try to overcome the problem that it represents to Australia as expenditure cutting. That is not all that the honourable member said. He said that we were actually going to give back some taxes. How can taxes be given back when taxation collections have been increased by 61 per cent? He said something about a growing economy. The population of Australia has not increased by 61 per cent, and nor have the wages of the average Australian. He knows what his taxation position is. When we left office the average weekly earner with a couple of kids was paying 17.5 per cent of his wages in taxation. After all these tax cuts he is going to pay 20.5 per cent.

Mr Gayler —What about the unemployed?

Mr TUCKEY —The interjector asks me about the unemployed. His government's policies dealt with them. It has told 16- and 17-year-olds that they will not get any money any more. That is the Government's answer to the unemployed. It has given them that with these very measures.

The honourable member for Canning was at pains to talk about the cross-subsidy and taxes on telephones and the ogre of privatisation. I am not here to debate the ogre of privatisation, but every time that I, as a rural member, hear people talk about cross-subsidy on telephones, I am reminded that it requires two telephones to make a phone call. All the revenues of capital cities would be substantially reduced if people were unable to phone country areas. We have these ridiculous figures brought forward, based purely on the revenue of competing city and country areas, without the recognition that the revenue is calculated at the point of making the phone call. Numerous long distance and expensive metropolitan phone calls are made to people in country areas, and that creates considerable revenue for the metropolitan areas. There is obviously a cross-subsidy, but there would be a heck of a lot less revenue for Telecom if it were unable to provide a service into country areas.

The Liberal Party has no intention whatsoever of destroying that arrangement, whatever its plans for Telecom are. I personally think that the first stages of privatisation in Telecom will be to get more private activity within the organisation, more contracting and more encouragement of existing employees to become small businessmen and to earn a decent quid-to have the right for the first time in history to practice their skills as private businessmen. A worker who wants to leave Telecom, with its monopoly, and give himself a chance to have a bit more for his retirement by taking his superannuation and investing in a business is by law denied the right to practice his skills in private business. He has to buy a newsagency, a corner grocery store or a delicatessen, because he cannot get work in his trade other than as an employee for Telecom. I am not sure that that is what all the Telecom workers want, although I know it is what their trade union wants, because everyone who leaves to become a private businessman no longer provides a membership to swell the trade union coffers.

The honourable member for Canning spoke a lot of rubbish. He complained about quorums. Quorums are applied by the Opposition in retaliation for the abuse of Question Time. Question Time is abused by this Government because it has no good news left. It has to come up with every question asked from its own side. Its whole back bench is regimented. The other day I congratulated the honourable member for Melbourne (Mr Hand) because he actually asked a question about some people, about some Vietnam veterans. He actually sought some information to help somebody. We rarely hear that from the Government's back bench. It is always serving up questions inviting the Government to attack the Opposition-never asking it to explain to Australia the benefits of the policies that it pursues. We know why that is. This Government has no good news left for Australia. It is purely trying to use the power of the numbers that it has in this place to divert public attention from its failings. Its failings are that it is still borrowing money and still spending too much money. This legislation is one of the greatest frauds of all, and that is the point that I wish to make.

These Bills are part of the mini-Budget, the initial Budget measures for May 1987, presented by the Treasurer (Mr Keating) on 13 May. These measures are very interesting because their basic plank, as the Treasurer explained, is that the Government is to save $4,000m by expenditure cuts. That is a pretty simple statement. Most Australians could understand that. But when we read the fine print how do we find the $4,000m is made up? Firstly, we are to sell some of the family jewels. One thousand million dollars of Australian's assets, paid for by their taxes, are to be sold to finance current expenditure. I have already pointed out that the Government has borrowed an additional $24,000m, but we are not going to use the $1,000m to pay any of that debt; we are going to use it to finance next year's current expenditure-that is, if we can get the money in. That is $1,000m out of $4,000m.

The next $1,000m, as was established yesterday, is to be gained by reducing the grants to our State governments. I am not necessarily complaining about that. I think if a government genuinely reduces its expenditure it is entitled to ask other levels of government to take a pro rata cut. But what we do not know yet is what the State governments have to do. When I have to pay my taxes to the State Government or to local government, it hurts just as much as when I have to pay them to the Federal Government. The dollars are equally real. It is a joke to suggest that, this Government having taken all that away from the State governments, if they go out and raise additional taxes to finance things they will be better off. We do not know about that as a tax cutting measure or, for that matter, as an expenditure cutting measure, because the State governments may go on spending the money and in fact, in the end, raise more money by imposing additional taxes. That accounts for half of the Treasurer's $4,000m. We have not struck any genuine cuts in expenditure yet.

Then we deal with the provisions of this legislation. This legislation proposes to impose sales tax on certain Commonwealth authorities, of which the most notable are Australia Post, Telecom Australia, the Australian Capital Territory Gaming and Liquor Authority, the Army and Air Force Canteen Service, the Housing Loans Insurance Corporation, the Phosphate Mining Corporation of Christmas Island and the Superannuation Fund Investment Trust. I do not say that those particular organisations should not be taxed. Particularly where they compete with other organisations that are taxed, I think it reasonable that they be asked to be taxed on an equal footing. The point I make is that they are consumer based organisations that happen to be owned by the Government and they will naturally have to pass that tax burden on to the consumer, namely the Australian taxpayer.

Of course, the telephone is now not a preserve of the wealthy. It is argued that a telephone is something unemployed people must have, if only to gain an opportunity to get employment. We are told by Mr Brack of Telecom that Telecom needs an extra 3c a telephone call, a 17 per cent increase in revenue, to handle this situation. We are told that the Government is not sure whether it will get that. It will probably be a 2c increase, which is still a very substantial increase in the cost of a telephone call. I put it to the House that it will have an additional relative effect on people in rural areas because they infrequently have the opportunity to make a `local call'. Many of the calls charged at 30c are monitored to just three minutes, after which the caller pays an additional cost even if it is a form of local call. These people will pay dearly for that. We are told, in these measures that the cost of this increase is of the order of $395m in 1988-89 and $310m in 1987-88, but there are additional measures, not referred to in this legislation, which take that tax burden up to $500m. I have not yet listed any expenditure cuts for which the Treasurer and this Government have any responsibility, and we are down to $1,500m.

Then we find how some of the cuts are to apply. There is a substantial cut in defence spending of $350m. I might say, considering the volatility of our region, as demonstrated to us in recent weeks, that now may not be the time for the Australian Government to be reducing the manpower and the operations of our defence structure. We are told that defence expenditure is not going to be cut in the capital works area. We are apparently going to have our you-beaut new FA18s and our you-beaut new submarines, but there is some doubt as to whether there will be any diesel to put into the submarines or any fuel to put into the FA18s. As we confront our highly skilled servicemen with these sorts of problems, they are leaving in droves. The next problem we will have is to design some sort of auto-pilot for our FA18s so that we can get them out to confront the enemy. I do not think that that is a very wise cut.

As honourable members can see, the mini-Budget is a fraud. I am astounded to hear the big business community of Australia lauding it when the simple facts are that we are looking at $1.5 billion of cuts against forward Estimates. The cuts have not been made against the relative figures for this year. As I have just identified, we know that we will have increased taxation. Of course, the Treasurer is pretty cunning. He talked about the deficit that we would have next year. A deficit is the money that a government borrows, using our kids as security, to fund the difference between what it spends and what it taxes. He says that we will only have a Budget deficit of less than one per cent of gross domestic. That is very helpful to all Australians, and the Treasurer knows it. People do not know what GDP is, and one per cent does not sound like very much. I tell those who are listening tonight that one per cent of GDP represents a figure of about $3,000m. That should be compared with the $3,500m that the Treasurer said he would borrow in this current year and the $4,500m he said he would borrow for the previous year.

Let me tell honourable members that those figures that he gave us were only indicative. The reality was that whereas last year he estimated he would borrow $4,919m, he actually borrowed $5,726m-an overrun of a mere $807m. Of course, this year we are told that his estimate of $3,500m of borrowings has increased to $4,000m-an increase of $500m, most of it represented by interest costs. Why is this so? It is because this Government's policy has made Australia unique in the world regarding its interest costs. We have never been in this situation before. Previously, when international rates were up, our rates were up; and when the international rates were down, ours were down. At this time they are down internationally-the world is awash with money-but ours are sky high. That is due to this Government's policy. That is the point we must make.

It is absolutely ridiculous for the Government to try to tell us that these measures represent some sort of price cutting. They are additional taxes on Australians and, to a limited degree, on visitors coming to Australia. That does not sound very smart. I repeat in that regard that the worst problem is the inconvenience that this mechanism will apply to Australians. Of course, we should therefore oppose it. The Government is foolish. The Opposition is not opposing it. We have moved an amendment to the motion for the second reading, which I support wholeheartedly.

Let me also tell honourable members, in the last couple of minutes remaining to me, about the growth of indirect taxation in this country under this Government. In 1983-84-it is a pity that the honourable member for Canning is not present to hear this-we raised $14,848m in indirect taxation. Of course, this sales tax adds to indirect taxation. This year, in 1986-87, we are raising $20,080m-a substantial increase. Of course, this means that over 30 per cent of all taxes raised in Australia are now raised by indirect means. When we look at fuel excise, in particular, we find that the growth has been dramatic. Over four years fuel excise has increased from $1,293m in 1982-83 to an estimated $5,644m in 1986-87. I believe that, if we add other forms of taxes, the cost of fuel this year-the stuff that ordinary, poor people have to use to gain their entertainment-will be about $7,000m. Excise growth alone over those four years has been 186 per cent. People have been taxed through the back door. Of course, this is just another mechanism. The Government taxes the statutory authorities and then says: `Blame Telecom because it has put its prices up'. The Government does not have the courage. It tells people that it is reducing taxation when it is increasing it dramatically.

Mr DEPUTY SPEAKER (Mr Ruddock) —Order! The honourable member's time has expired.