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Thursday, 25 June 1998
Page: 5428


Mr LLOYD —Thank you, Mr Speaker.


Mr Lee —Last question, Jim.


Mr LLOYD —You said that last time, Michael. My question is addressed to the Treasurer. Has the Treasurer seen suggestions that Australia's outdated and discredited 1930s wholesale sales tax system could be modernised for the 21st century by taxing luxury jets? What affect would further tinkering with the sales tax system have on the fairness and equity of Australia's ramshackle system of indirect taxes?


Mr COSTELLO (Treasurer) —I appreciate the question. I was rather surprised to see that the Leader of the Opposition said that maybe Australia's indirect tax system could be fixed by introducing a tax on private aircraft. That is what he said on 23 June 1998. He said:

This business about family cars being taxed but private aircraft not, if Mr Costello wants to introduce a tax on private aircraft, we'll support it. Tell him to put it in straight away. We'll support it, pass it.

I thought that was rather strange because he had 13 years of government to put it, support it and pass it. He apparently came to the conclusion on 23 June, after 13 years of inaction, that the most important reform required to the indirect tax system was to put a tax on private jets. As the Prime Minister asked, why would you tax motor vehicles 22 per cent and private jets nothing? Our view is that, in relation to indirect taxes, you should have the same rate. That is our view.

Let me also ask some other questions. Labor wants to tax pens and crayons at 22 per cent but antique, gold-plated fountain pens at nothing. Labor wants to tax household vinyl floor tiles at 12 per cent but household marble floor tiles at nothing. Labor wants to tax biscuits at 12 per cent and caviar at nothing.


Mr Beazley —Mr Speaker, I have a point of order to do with relevance. The Treasurer was asked a very specific question about whether or not he had seen a view expressed on the need to tax private jets and what comment he had on that. I would say that he has strayed a long way from the question that was asked of him.


Mr SPEAKER —The Leader of the Opposition would know that the question certainly related to tax and where tax was being ap plied. I think the Treasurer was telling the House. I call the Treasurer.


Mr COSTELLO —Labor wants to tax children's painting sets at 22 per cent but a Van Gogh at nothing. Labor wants to tax peanuts at 12 per cent but lobster and prawns at nothing. Labor wants to tax wrapping paper at 22 per cent but gold wallpaper at nothing. The one thing we know about the Labor Party is that the Labor Party is absolutely addicted to the wholesale sales tax. Make no mistake about it. In the next campaign, Labor will be fighting for the wholesale sales tax. That is the thing it really cares about.

Why does the Labor Party care so much about the wholesale sales tax? Not because it has any logic to it. Why does the Labor Party really care so deeply about the wholesale sales tax? I will tell you why: the Labor Party knows, as it has proved, that if people do not know what the rates are, you can secretly increase them.

In 1993 the Labor Party went to an election saying that it was against indirect tax reform. Back then in 1993 we had rates of 10, 20 and 30 per cent, but that was not enough for Labor, was it? Labor knew it could increase those wholesale sales tax rates and, as soon as that election was over, the 10 per cent rate went to 11 and then the 11 went to 12; the 20 went to 21 and then the 21 went to 22; and the 30 went to 31 and then the 31 went to 32.

How could you in all honesty support a system that says that vinyl floor tiles are taxed at 12 per cent and household marble floor tiles are not taxed? As most countries around the world have discovered, the fair thing is to have a uniform rate across the board, then you do not get into these arguments in relation to caviar and biscuits. But that takes leadership. Tax reform takes leadership, and leadership is the one thing you will never get out of this Leader of the Opposition.