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Wednesday, 9 December 1998
Page: 1674


Mr BEAZLEY (10:38 AM) —The A New Tax System (Goods and Services Tax) Bill 1998 and cognate bills reflect one of the things which I hate most about this government—and most people in this country are having to learn to live with it as well: their cant and hypocrisy that they are a party of family values and a party for the family when every single thing they do—manifest recently in this piece of legislation—is an action against that. No single study of family breakdown or family difficulty in this country does not have at its heart the financial circumstances in which a family finds itself.

Contemplate the actions of the government to this point as far as families are concerned. The first action was savage cuts to the Australian Federal Police and their vital role in drug enforcement. What happens in terms of drugs is a matter of the greatest significance for the average family these days. Late last year, the Prime Minister said that he was going to put in place a drug education program. Where is it 15 months on?

The second action was savage cuts to child care—the opportunity people have to get good, safe care for their children while they are in the work force when the demand of Australian families these days is choice: choice about whether or not to be in the work force. If they choose to be in the work force, their children should not be penalised.

Then there is the neglect of public hospitals in this country. The shameful Private Health Insurance Incentives Bill 1998 which is now in the Senate is associated with handing out benefits not to the average Australian family, not to the people who are looking after and rearing the children of this country, but to people who will stay in private health insurance no matter what. Note that there is not one single private children's hospital in this country. Every children's hospital in this country is in the public sector. Like every other parent in Western Australia, I take my kids to the Princess Margaret Hospital, and that hospital is being starved of funds by this government.

The next point is the situation in nursing homes with the up-front fees which place a burden on families. Instead of being in a situation where they are seen as the patriarch or matriarch of the family, elderly people in this country are now portrayed as a family burden. That is what they have effectively become as a result of decisions made by this government.

We now have the daddy of them all in this government's systematic assault on Australian families and Australian family values—the goods and services tax. Do not kid yourself about compensation in relation to a goods and services tax. Understand that the 30 per cent rate on 80 per cent of the people that they talk about does not compensate in either the short or longterm for the impact of a goods and services tax on the Australian family.

Only one family friendly new tax proposal was offered in the course of the last election campaign, and that was ours. You can reform the tax system without a goods and services tax. You can reform the tax system by forcing people who are not paying their fair share of tax to pay their fair share—which is the tax reform that the people of Australia seek—and then you reward those who work and look after their families with a decent family tax credit. Our tax package in the last election campaign was 100 per cent family oriented.

Understand about the dynamic of this tax that every piece of rhetoric that the Liberal Party put out on it has to be read for the code. When they say, `This will broaden the tax base,' or when they say, `This will be an opportunity to keep up services,' what do they mean? They mean that the goods and services tax—the rate at which it is levied, the goods on which it is levied—is going to rise and be enforced punitively in order to ensure in their minds that the drift that will occur in other elements of the taxation system is made up there.

When the states come to the government and say, `We need more money for public schools and public hospitals,' the response of the government will be, `You know what to do—raise the GST one or two per cent.' Take it from 10 per cent, which is where it started in Britain, to 17½ per cent where it stands now. Take it from 10 per cent, which is where it started in most Scandinavian countries, and take it to 25 per cent, which is where it is now. Take it from 10 per cent, where it started in New Zealand, to 12½ per cent where it stands now.

What happens to compensation packages when that occurs? What happens to tax cuts when that occurs? They are whittled away. That is the intention of this government. The dynamic of a goods and services tax, once it is in place, will become the focal point of any change in Australian public services from that point on. What does that mean? It means that gradually over time what already is—and the Liberal Party says it with pride—a massive shift of the tax burden from upper income Australia and business onto lower and middle income Australian families will persist and expand. That is the dynamic of this legislation. It starts with a fundamental unfairness to Australian families at its core, and drives from that fundamental unfairness to what is, in taxation terms, absolute persecution.

The government can talk all it likes about changes in the tax rates. In terms of the effect on families, the changes in the tax rates will be eaten up very quickly indeed, if there is any compensation at all. We all know how hard it is for economists to agree on anything, but they are at one on this government's GST compensation package. You can take your pick. Let me go through a few of them on the issue of compensation, which is absolutely critical to the average Australian family. Peter McDonald from the ANU pointed out that the government estimated that the GST impact on a middle income family would be only 30c per child more than the impact on a couple without children on the same income. No parent in Australia will believe that a tax on almost everything children need would add only 30c a week to the budget, but that is the calculation on which the government has based its compensation package.

Then you have got the Melbourne Institute of Applied Economic and Social Research. These are no friends of the Labor Party that we are dealing with here; these are just serious economic analysts. The Melbourne institute said that a family with two children in the bottom 20 per cent of income earners needs $19 a week to compensate them for the GST. The government will provide $8. You have got Professor Ann Harding, who said that the government must undertake additional research before the tax package is introduced to confirm whether the general CPI is a satisfactory basis for compensating social security recipients. These are actually friends of the GST that we are now talking about. Neil Warren estimates that the impact of the GST on a pensioner couple's cost of living, at $15 a week, is more than double the $6 allowed by the government. And Arthur Andersen—again, no Labor Party hacks in this list—estimates that the impact for a pensioner couple at $18 a week is three times the amount allowed for by this government.

The compensation for pensioners is worth talking about briefly here. Of all the pieces of chicanery that impacts upon the average Australian family with this piece of legislation, this is the biggest confidence trick of all. Pick up the budget papers from last year and you will see this. Sitting in those budget papers are $2.2 billion worth of compensation or catch-up for pensioners to bring them to 25 per cent of average weekly earnings. That is a very good policy that we put in place, and a policy persisted with under this government. It is one of the few decent policies they have actually persisted with, but they have. But they have found a way around it; they always do. Pensioners would have got that 25 per cent average weekly earnings catch-up no matter what—no GST, nothing. They would have got that 25 per cent, and the government budgeted for it. But the government double-counts. The government gives them compensation, but it is the compensation they would have got anyway to take the pension to 25 per cent of AWE. If the government were serious about compensation, the starting point would have been to render that compensation neutral in relation to that 25 per cent AWE target, so it would have become 25 per cent plus. That is what the compensation would have been if there was going to be a serious effort at compensation. There is none of it here. This is a con job on the pensioners of this country and yet another demeaning of their status as the patriarchs and matriarchs of the families of this nation.

The organisation of this has its implications into the business tax area. Upon whom will the burden of this fall? On BHP? On any of the large companies of this country? They have got their accountancy and financial systems in place which will do this standing on their heads. The people who will be affected by this will be the 45 per cent of small business people in this country who are micro-businesses. Every single micro-business effectively is a family business, almost by definition. They do their own accounting. It is usually the wife who does the accounting in that arrangement; let us be frank about that. She it is who has to sit up night after night doing the books. This is a tax which attacks lifestyles as far as micro-business in this country is concerned. It has a massive impact on micro-business in this country, on the organisation of their lives.

What will be left of the family life of the ordinary, average Australian family who happen to be running their own business? Every year more redundancies come forward and people use those redundancy packages to set themselves up in business, because they cannot get back into the permanent work force again. Every time they now have to do that, as a result of experiencing that redundancy, they know who to thank for the total confusion in their lives, if this particular tax measure goes through. It will be the so-called small business and family friendly Liberal Party, who have lost that flag for all time as far as any rational analysis of Australian politics is concerned.

Contemplate the impact that there will be on the average life of the Australian family when this goes through. Many countries have found it worth while to exclude food from the goods and services tax. The government thinks there is a 1.9 per cent price effect of this. You have not taxed fresh food and necessities in this country ever. The government is going to assume that a family budget, which is made up virtually in its entirety of fresh food and other essentials of life, is somehow going to be operated with a 1.9 per cent impact upon it. When you examine that 1.9 per cent and what it is made up of, there is an assumption in there, for example, that the family will be acquiring sometime during the course of the year a harvester or some other piece of major agricultural equipment. This will be news to the average Australian family living in Kwinana or Rockingham, that on their list of essential purchases this year which will make the GST all worth while for them is a combine harvester. Imagine rocking down the road with a combine harvester and saying, `As a result of having this combine harvester, I no longer resent the fact that I'm paying 10 per cent more on everything that is essential to my family.'

The average housewife in this country who handles the family budget knows that one thing will not occur in this, and that is that that family budget will be compensated for. She knows, as every Australian family will come to know, that all of a sudden life on the margin will be even more marginal, as those bills chase each other around the fridge door for the services that come into the household, be it repairs for plumbing, be it repairs for the electric light, be it the bill for electricity. Those fridge magnets will be up there with every one of those bills sitting under them. That race that starts with the pay packet as the bills come in at the end of the month will be a race which families might have actually won under the current situation, but now they will stay permanently behind.

What do they have to look forward to? As far as this system is concerned, they have this to look forward to: a very low quality of life and a government which has put pressure on their child care, on their education and on the nursing homes they have to put their aged parents into. The government is now going to put pressure on them in every single feature of their daily lives. This is a lifestyle tax—a family lifestyle tax.

Not all families live hand to mouth. There are some families in middle income Australia that have that little bit extra, that like to give their kids the opportunities that arise. They may feel that they need to put them through a bit of extra private tuition for remedial education if they are not keeping up with maths. If they are lucky enough to send them to a greater public school they will be all right. But if they are in a government school or a poor Catholic school there is no chance. Those facilities will not be provided by the schools. They will pay another 10 per cent. Another 10 per cent will go on that.

If they are concerned about the fitness of their kids and they want them to join Little Athletics—it will be taxed. If they are concerned about the fitness of their kids and they want to provide them with a sporting opportunity in a sports club—it will be taxed. If they want to maintain their own personal fitness so that they can look after their families effectively and they join the squash club or any other sporting club—it will be taxed. If they want to get themselves a bit of rest and recreation at the end of the year, or take the family away for a holiday around Australia to see something of the country—it will be taxed. And when they do that if they sit on an aeroplane with a foreign tourist they will be able to swap yarns about how that foreign tourist is not paying tax while they are paying tax themselves. This will be a rocking little opportunity for the average Australian family when they have a chance to do that.

Perchance they will talk to their mum or dad who may be in one of those marvellous complexes available now where the nursing home, hostel and independent living facility are combined. This is a way many Australians are now choosing to spend their old age. There is a guarantee, more or less, that they can move from one to the other as the need arises. What are the people in these complexes going to find as they go to pick up their food? They find that, if they are in the independent living part but are sharing the dining room with the nursing home folk, they are somehow or other going to have a badge which says, `We are not GST-free residents' or, alternatively, `We are GST-free residents'. Talk about simplicity.

But there will be, it has to be said, some degree of confusion applying in all of this for the average family, because the ultimate piece of cowardice and gutlessness as far as this government are concerned as they confront the consequences of their new tax is their decision to conceal it. They remonstrate about the wholesale sales tax, which is a tax on some things but not on the necessities of life. `Oh,' they say unctuously, `this is a hidden tax; you don't actually get to see the wholesale sales tax. And you ought to know that there are wholesale sales taxes on some things.' But what have they put in this legislation? Is the GST on the receipt? No, not a bit of it. The GST goes into every single document except the last. Every single line that business is taxed on with the GST will have on the documentation related to it the 10 per cent—except the final point. At the final point, when it comes across the table to the mums and dads of Australia, to the elderly of Australia or to the kids of Australia, there is nothing there that says what the GST is.

They will go into that nursing home, hostel or independent living complex and as they go through to get their $3 meal—


Mr Hockey —$3?


Mr BEAZLEY —Yes, they are quite cheap in many of these places. You ought to go through a few of them.


Mr Crean —It is $4 in North Sydney.


Mr BEAZLEY —Let us now defend the position of the good people of North Sydney. It is $4 for the good people of North Sydney. So it will cost $4 for the GST-free residents but $4.40 for those who are not. This is the situation you will see as an elderly person comes up to the table: `What are you dear?' the person behind the table will say in that dreadfully patronising way that the elderly are often dealt with. `Are you a GST person? I'm sorry, darling, it's going to be $4.40 for you if you are a GST person. It is only $4 for old Meg over here because she is in the nursing home and that is already covered. Don't worry dear. Just sign your little chit, dear, to indicate that we are not actually ripping off the till and to make absolutely certain that you have been properly charged.'

This is a wretched tax, a tax we did not need, a 1960s European tax invented at a time when we thought jobs would go on forever. What a crazy notion—that every time you put a bit of effort into something and add a bit of value you ought to be taxed. This is a crazy notion: to shift the tax burden onto precisely the people in this country who are working and supporting the future of this nation—shifting the tax burden onto them and taking it off other people, many of whom have been evading their fair share to this point. It is a disgrace and it will be opposed. (Time expired)