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Monday, 7 December 1998
Page: 1532

Mr ADAMS (9:33 PM) —The government has talked a lot about mandate. Mandate is one of those words that can be used and abused as seen fit, and never has it been so abused than by this government and this Prime Minister with regard to the debate over the GST. We all know John Howard's true thoughts about the mandate theory of politics. They are a matter of public record. But since the election we have been witness to a conversion of near biblical proportions as he tries to convince us that he has a mandate to impose a GST on the people of Australia. I am here to say that he does not have a mandate.

How many times does the Prime Minister need to be reminded that on 3 October this year more people of this country voted for political parties opposed to a GST than for those in favour of it? The Australian Labor Party polled 51.3 per cent of the two-party preferred vote across the nation. In my own state of Tasmania that figure rose to 57.3 per cent, enough to deliver the Australian Labor Party all five seats in the House of Representatives from that state. That is a mandate and that is why I am here today to say that never ever should this parliament pass a bill that allows a goods and services tax. It is a mandate my colleagues take very seriously. The people of Tasmania have told us that they do not want a GST, and for a very good reason.

A GST will not do the things that the Prime Minister has claimed. A GST will not mean the end of the black economy. In fact, a GST provides some of the more unscrupulous within our community with an incentive to enter the black economy. This is borne out by research overseas where in the UK it has been discovered that more than one in three British consumers now regularly negotiate to pay in cash to avoid the country's GST. A similar situation exists in Tasmania. A GST will do nothing to stop tax evasion. It will not help with the nation's savings and it will not repair our trade imbalance. Most importantly of all, a GST will not redistribute the tax burden to make it fairer for ordinary Australian men and women.

But there are some things a GST will do. It will add to the cost of the basic necessities of life, especially at the supermarket for such basic items as bread, milk, fresh fruit and vegetables. It will mean that, for the first time in our country's history, people will be paying a tax every time they telephone a plumber, electrician or mechanic. It will mean that small business will spend their time being tax collectors for the government instead of getting on with the business of earning a living.

People in Tasmania will feel the effects of a GST much more than anywhere else in the nation. Just a few days ago the President of the Australian Council for Social Services, Michael Raper, told a forum in northern Tasmania that Tasmanians already pay more for essential items than in any other regional centre of the country. This is a matter of established fact. Also a matter of established fact is that the average earnings in Tasmania are less than those on the mainland, so the already unequal effects of a GST on Tasmanians will be amplified twice over.

In my own seat of Lyons, community concern over the GST has been overwhelming. Local councils fear it. They fear the inconsistencies that have already been flagged, particularly that many local government activities such as holiday programs, swimming pools, sports facilities and hall hire, if they charge a nominal fee, are liable for the GST. Any work they contract out is liable for the GST. Their biggest concern is channelling funding through the states, because they are concerned that local government will become the poor neighbour to everyone. This is particularly true of country councils, who raise a good deal less than half their revenue from rates.

Welfare and charitable organisations fear it. Small businesses dread it. Most of all, pensioners, low income earners and people living in small rural towns and hamlets fear it. They fear it because, as a regressive tax, it discriminates in favour of wealthier sections of the community over the less wealthy. Most people who live in my electorate are not wealthy people. They are on low incomes and in many cases live without easy access to the sorts of facilities and services many in the cities take for granted. They are the families who spend most of their income on food: up to 25 per cent or more of their budgets, compared to the 12.5 per cent spent by the wealthiest 20 per cent of Australian families. In the game of tax winners and losers, the vast majority of my constituents will be losers.

It is not hard to predict the winners. Using the government's own projections, we see that the Prime Minister of this country will get 17 times more out of his own tax package than the average pensioner—17 times! He then has the temerity to claim that his proposals are fair and equal. I think many Australians feel sickened at the Prime Minister's definition of fairness—which is a bit of a problem in itself, given that most over-the-counter medicines will increase in price under a GST. As put to me in one piece of correspondence recently, the GST is payable by the poor, collected by small business and payable to the rich.

The Australian Labor Party and the people of Lyons do want tax reform. The proposals the Labor Party put forward at the last election reflect our commitment to a fair and socially just taxation system that provides tax relief where it is most needed: to struggling low and middle income families, especially those with children. It also includes a commitment towards ensuring that those wealthy Australians who can and should be paying their fair share of tax are made to do so. Nothing at all sticks in the throat of the average Australian more than the knowledge that the mega-rich of our country are not paying their way. These people make their fortunes in Australia but use every means at their disposal to avoid making a fair financial return. Why is it that the government only ever talks about the need for mutual obligation in the context of social security recipients, whom it knows it can push around, vilify and scapegoat on a whim, and not the rich and powerful?

As everybody bar the government seems to realise, a GST is not only bad for people, it is also bad for the economy. The inflationary impact of a GST is well documented, as is its impact on consumer spending and jobs growth. In the service sector, from where most future employment prospects are expected to come, a GST will hit very hard indeed. For the government to knowingly go down the road of exposing our economy to these perils borders on the reckless.

And no-one, not one person in this place, truly believes that a GST, if introduced, would never ever rise. It simply beggars belief to think that a GST would remain at 10 per cent forever and a day. Take, for instance, these simple historical facts. In 21 of 23 countries that have a GST, the rate has risen. In New Zealand the GST was introduced at 10 per cent; it is now 12.5 per cent. In Spain the initial rate was 12 per cent; it is now 16 per cent. In Britain it was 10 per cent; it now stands at 17.5 per cent. In Denmark it started at 10 per cent and is now a colossal 25 per cent. Every time the rate of a GST in these countries increases, so does the unfairness.

The supposed safeguards the government has put in place to prevent increases can only be described as a sham. `What the parliament giveth, the parliament can taketh away.' Any future Commonwealth government can legislate a rise in the GST, with or without the consent of the states. Australians simply do not believe the Prime Minister's promise that the GST will not rise. After all, this is the same Prime Minister who gave a commitment three years ago that he would `never ever' introduce a goods and services tax. This is the same Prime Minister who has performed more backflips in the past three years than an Olympic gymnast, albeit without the grace and elegance.

Australians have a reputation for egalitarianism—a fair go for everybody. It is a notion embedded deep within the psyche of our people. What will become of our nation if we lose this picture of ourselves? So much of what this government has done, and is trying to do with this bill, will take us further down the path of a divided society, a society of haves and have nots, of people being left without the safety nets that set us apart from other countries. A GST is one step along this path. The chronic underfunding of our public health system is another.

The Prime Minister wants to compensate for his government's failing to provide adequate safety nets by asking business to donate more to charity. At the rate this government is going, it will not be long until we have a `charity state', and from there I guess we will have workhouses for the unemployed and goodness knows what else. The mind simply boggles. At least he has had the good sense to exempt charities from the GST; an act of charity, you might say. But I dare say we will see many new `charities' arising which seem to have rich benefactors, not beneficiaries.

Perhaps on the eve of Christmas our Prime Minister has revisited A Christmas Carol and is hearing the ghost of Christmas past on the matter of the GST. Will he heed the ghost of Christmas future that tells us that, if he continues down this path, many people will be the poorer on Christmas Day after the advent of the GST? Can he remember back before the last election saying there would `never ever' be a GST? Will the ghost of Christmas past be heard echoing around the corridors, `Never ever, never ever.'

Mr Hockey —Save us.

Mr ADAMS —There are many in my electorate who are questioning and are really concerned about their future, despite all these promises of exemptions on this and exemptions on that. Exemptions can easily disappear, Mr Minister at the table. This government must start heeding the voice of the electorate, and the electorate is saying that they do not want a GST. I am reminded in this debate of the Prime Minister's defence of the monarchy in the republic debate. This defence is premised on the belief that `if it ain't broke, don't fix it'. All our present tax system requires is the sort of periodic maintenance proposed by Labor during the election. I repeat, `It ain't broke and it don't need fixing.'