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Tuesday, 8 December 1998
Page: 1604


Ms GILLARD (6:54 PM) —As has been noted by other speakers, the time the government has allowed for this pivotal debate is shamelessly short. If, as the Treasurer boasts, `This is the most comprehensive reform of taxation in the history of Federation,' it seems curious that the government would be shy of an exhaustive debate in this place. But shy it is and, given the limitations on time available to me, I intend to focus on one aspect of the new tax plan: the effect of the GST on education.

The government speakers in this debate have at times sounded like children, breathlessly extolling the virtues of a new toy, like snake oil spruikers who will assure you that their product will banish everything from baldness to wrinkles. But, in all this `Where do you get it?' style marketing hype, government members have been silent on the issue of education and the GST. I was going to say `curiously silent' but perhaps the silence is not at all curious, given the clearly negative impact of the GST on education in this country.

Let us look at the introduction of this regressive new tax and its impact on education in context. The new century in which the government seeks to impose this tax is the century in which the twin forces of globalisation and new technology, particularly information technology, will continue to remake our world. There can be no doubt that since the 1970s global forces, including the rapid industrialisation of a number of developing countries, the fall in transportation and communication costs and the rate of technological development, have left a portion of the work force in the industrial world, including Australia, relatively underskilled and consequently at risk of unemployment and underemployment. The value of investing in education to improve the skills base of the economy and to consequently limit unemployment, underemployment and wage inequality not only makes intuitive sense but also stands the test of close and rigorous scrutiny.

A recently published work by Carlos Boix entitled `Political parties, growth and equality' contains a regression analysis of the impact of educational attainment within the population and unemployment, and concludes for OECD nations for the period 1982 to 1990 that:

. . . unemployment decreases a whole percentage point for each six to seven percentage points of population that have studied beyond lower secondary education.

Indeed, increasingly, one of the major differences between conservative parties and social democratic parties worldwide is the attitude taken to public investment in supply side economic strategies, particularly investment in education.

In Australia, despite investment in education being a vital ingredient for sustained economic success, what do we see? We see the coalition at federal and state levels hack ing away at education funding. In the 1996 budget this government hacked $1.8 billion of public support away from our university system. In my home state of Victoria we have seen 9,000 teachers sacked, 370 schools close and a $50 million maintenance backlog.

Mr McArthur interjecting

Mr Hockey interjecting


Ms GILLARD —Now, to add insult to past and continuing injury—I am speaking of the Kennett government, if members of the coalition are confused—this government is introducing a GST and falsely claiming that education is GST free.

Let me list the facts that show that claim to be a lie. Fact 1: the GST applies to privately accessed tuition. This was the simple point of the question asked by the member for Dobell at question time today—a question the minister simply did not want to answer. In states where conservative governments have hacked into the education system, parents of kids in state schools often have no choice but to access such privately paid-for tutoring. The Jeff Kennett system of education is to limit resources to schools and then give them Hobson's choice: do you want to have an art teacher, a music teacher and a physical education teacher and have class sizes way over 30, or do you want to bring class sizes down and have no specialist teachers?

For schools that resolve this cruel dilemma in favour of lower class sizes, parents know that the only way their kids are going to get a music lesson or a drawing class—the sorts of things provided as of right by the GST-free tuition fees of prestige private schools—is to buy it privately and pay GST on it. How regressive is this tax package? We will have GST-free prestige private schools while ordinary battlers trying to give their kids the best possible start in life will be slugged by a GST.

The GST on education does not stop there. Fact 2: the GST will apply to ordinary school activities like the hiring of laptop computers and musical instruments and on items like the food eaten by kids on excursions. How absurd! The bus to the zoo is GST free but the sandwich you eat while you are there is not. Fact 3: the GST will also apply to aspects of school fundraising. Many in this House might take the view that school fundraising is no more than an occasional lamington drive, an attempt to find a valuable but discretionary add-on to schools. In Victoria think again. In Jeff Kennett's Victoria, every parent with children at state schools has to raise an average of $430 per year. In some schools, fundraising pays for more than 50 per cent of the cost of school programs.

In 1996, one of the large secondary schools in the eastern suburbs raised $2 million in fundraising, or an average of $1,700 per student. Not only is this a recipe for further entrenching educational inequality, it is a recipe for breaking the backs of parents of state school kids in Victoria, breaking their backs running fundraising dinners and fetes and sausage sizzles. To that kind of effort and struggle this government says, `Let's put a 10 per cent GST on every sausage you sell, every ride you hire for the school fete.'


Mr Hockey —That's wrong. You know that's wrong. That's absolute rubbish.


Ms GILLARD —That is absolutely right. You cannot squeeze Victorian parents harder than they already are being squeezed. This must make each and every such fundraiser less profitable. This fact clearly is not understood by the members opposite. Fact 4: the GST will impose huge compliance costs on schools, not only in set-up but on an ongoing basis. Schools will need to delineate between GST-exempt transactions and non-exempt transactions, and maintain records sufficient to enable refund of GST paid on inputs. The costs of set-up and administration of such accountancy programs are unknown.

Fact 5: the GST will apply to items used by students, and other speakers from the opposition have noted that the compensation package for battling families with children is woefully inadequate. The problems with the incidence of GST on education do not end in the school sector. In higher education institutions we will see students slugged by a GST on services like photocopying, access to email and access to the Internet. In higher education research, institutions are being sent on an impossible mission: to divide GST-free research from commercial fee-for-service research which will be subject to a GST.

How, for example, would the research work of cooperative research centres be classified, given that it is aimed at generating commercial benefits but may have significant public benefits as well? Presumably it will be slugged by a GST, and Australia's research effort will be further diminished. The GST will affect the adult and community education sector, with the application of a GST to recreation, leisure and personal enrichment courses. The added cost, no doubt, will provide a significant disincentive for a culture of community and lifelong learning, and the increase in costs will limit access.

What this government does not seem to understand is that, for many adults who have had scant experience with the education system, the first step on an educational pathway may be a personal enrichment or leisure course. Having proved to themselves their competence in dealing with such a course they then move further down the educational pathway to vocational training. Many will now be discouraged from taking that first step on the educational pathway, because the cost of the personal enrichment, leisure or hobby course will now be 10 per cent more because of the advent of the GST, if this government is successful in introducing it, once again limiting access to education for those who most need it. Last, but by no means least, we will see books and the Internet the subject of a GST—access to information in the information age taxed. What an absurdity.


Mr Hockey —How?


Ms GILLARD —The member opposite asked me how. There will be a 10 per cent GST on the price of books. If you do not want to take my word for that and it has not been explained to you in your party room briefings, which is, of course, possible, then perhaps you will take the word of Sir Anthony Mason, the Chief Justice of the High Court of Australia from 1987 to 1995, someone I am sure even those members opposite would describe as an impeccable source. He puts his criticism of the GST on books as follows:

My criticism of a GST on books is not simply based on the reading of books for educational purposes (including self-education). My basic point is that reading is so central to our lives that we should reject a tax that, though not a tax on reading, is inimical to the encouragement of reading.

They are the words of Sir Anthony Mason on the GST on books—and it will also apply to Internet access. This is a bad tax for education and, therefore, a bad tax for Australia. It should be comprehensively rejected in this place.