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Wednesday, 9 December 1998
Page: 1682


Ms GAMBARO (11:23 AM) —Today we have a range of new tax bills before this House that mark the beginning of a rejuvenated taxation system for Australia. These bills are about securing a future for all Australians. The bills ensure the maintenance of a constant stream of revenue for both federal and state governments. They also deliver tax cuts to ordinary Australians and, in doing so, they will remove the burden so heavily placed on battling Australians by the current 1930s income tax system. The bills will also remove a hidden wholesale sales tax system which secretly taxes Australian families at the rates of 12 per cent, 22 per cent and 32 per cent.

There has been a great deal of debate about these bills, and the debate continues today. The focus has been on a goods and services tax, naturally, and that is what the 1998 general election was fought on. But, as everyone in the chamber knows, the GST forms only a very small part of that overall package. Tax cuts and other compensatory measures also play a very crucial role in the overall reform of the taxation system.

Before discussing these measures I want to say a few things about the GST bills. These bills will give Australia a mechanism to ensure that all Australians have the level of government services that they can expect, and members opposite, including the member for Batman, will know that. For example, let us look at some comments made by the Leader of the Opposition. In 1985 the member for Brand stated, at a National Press Club conference:

There are very few societies which operate with a tax system so heavily dependent on income tax as we do and very few which don't have a substantial component of their tax system reliant on broadly based consumption taxes.

I think the Treasurer and the government will agree, as will most of the Australian population. Also, the Treasurer has reminded the Leader of the Opposition of many societies that operate with an outdated tax system, one of those being Swaziland.

The need for a more efficient taxation mechanism in this country has actually been recognised by members of the opposition even though they come into the House and complain and present their negative views about the tax system. But they reject it, and they reject it for one reason—for their own political survival.

I am heartened by the refreshing honesty of my predecessor in the seat of Petrie, Mr Gary Johns. He has been refreshingly honest, and it is a pity that members opposite cannot be as honest as Mr Johns. I see the member for Paterson cringing; he does not want to hear what Mr Johns has said because he knows in his heart that it is very true. As the member for Paterson will recognise, Mr Johns was a former Keating government minister. In August of this year Mr Johns came out and supported the Howard government tax plan. Why did he do that? He supported the tax package because:

. . . it's the sort of package that Labor will have to introduce, at some stage in the future. Any honest decent Government would.

Why is this? Why would Labor have to introduce such a package? According to Mr Johns, they would have to because Australia needs a mature tax base. And why? In Mr Johns' words `so that the Labor side of life can look after the poor' and the disadvan taged—and that is what we are all about as well.

Honesty in politics from the Labor Party is very refreshing indeed. From Mr Johns' comments then, one could reach the conclusion that Labor's opposition to the package is really opposing assistance to those in society who need help the most—those in the social security system and those who are disadvantaged—and that that is really what it is all about. Labor's position today is—and on other occasions has been—really about grandstanding.

Unlike those opposite, the government has acted decisively to try to fix the crumbling tax system. All the members opposite give us is negativity. They do not think about the future or the prosperity of the country. These bills are about building a solid foundation—and that is what we are all about, as Mr Johns recognised. Despite the scaremongering of the Labor Party, Australians know that, and that is why they voted for us in the 1998 election.

Since the election the government has also acted on its promise to ensure that contentious areas such as health, education and religious services will receive equitable treatment. It is to these areas that I will now turn. In my electorate of Petrie I have a very high proportion of people who are over the age of 65. Many of them are pensioners, and they are self-funded retirees. The government has made sure that the areas that concern these people are GST free and that nursing homes can provide goods and services which are free of GST.

Qualifying institutions, such as those funded under Commonwealth or state legislation or budgets, or those which are privately funded institutions approved by the minister, are exempt. Home and community care services are also exempt. Many older people want to have the choice of staying in their own homes, and that is what this package is about as well. It gives people the choice and the freedom to exercise their quality of life. It ensures that the services that these particular people get in their homes—such as Meals on Wheels and personal care—are GST free. Members opposite will know that. That puts them on an even footing with residents of aged care facilities.

I must applaud that. I visit many people—just recently I visited with a Meals on Wheels service—who would do anything to stay in their home for as long as they are physically capable. I think we have recognised this in providing care and services to them accordingly.

Similarly, health services are very important. It is important that they remain GST free if they are clinically provided by a registered medical practitioner. Recently, we extended the scope of those medical services to include health services such as audiology and osteopathy. It may not please members opposite to know that there are other services such as non-essential cosmetic surgery which are not included in these health services. These exemptions are evidence of the government's commitment to listening to community concerns. They also play a very important part in addressing equity in the system.

However, the real source of equity in the new system comes through tax cuts for wage and salary earners and also in compensatory measures for recipients of government benefits. This is part of the package that the Labor Party does not want to discuss—the additional tax cuts that will be available to people.

Mr Horne interjecting


Ms GAMBARO —There will also be a four per cent up-front increase for social security and veteran payments. The member for Paterson can argue all he likes about that, but he knows that these are adequate measures and that what we are doing is beneficial for families. Family assistance will increase by $140 a year for a child or $350 a year for single income families with a child under the age of five. Income tax cuts will also reduce the burden on families. I point out again to the member for Paterson that it is all about reducing the burden on families.

I would like also to speak about the abolition of the hidden GST. Members opposite never want to speak about the hidden GST—the wholesale sales tax system. By their actions they seem to support the retention of the wholesale sales tax system which we have had since the 1930s. Only the Labor Party would have the audacity to claim that the government's package is unfair when they have had a system that taxes families. The member for Paterson spoke earlier about families. I remind him that at the moment families are taxed at 12, 22 and 32 per cent on everyday items.

During the election I visited a number of local schools. There is a 22 per cent tax on lunch boxes and on a number of pencils and stationery items. These are things that families must provide for their children on an ongoing basis. I know that my children come to me regularly with a list of stationery and equipment requirements. Many of those attract a 22 per cent wholesale sales tax.

This is a system which the member for Holt and former Deputy Leader of the Opposition says does not `need any kind of wholesale revision'. The member for Holt even admitted in July that he could not rule out increasing some wholesale sales taxes. The abolition of the wholesale sales tax regime will put families on a better footing. Previously, the member for Batman said that the new system would disadvantage people trying to get jobs. We are about creating jobs. We are about creating a system that will encourage employers to provide jobs.

I will end my remarks by giving one very quick example. Recently, I visited an independent grocer who has a supermarket. He said to me that he was looking forward to the introduction of the new system because every year he has to pay a loan because of his sales tax bill of $22,000. The abolition of that tax would enable him to employ one extra person, which he dearly needs.

We are about improving the current system. We are about creating jobs. We are about moving into the 21st century and providing prosperity for the people who come after us and for the generation after that. I have no hesitation in commending these bills to the House.