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Wednesday, 9 December 1998
Page: 1686


Mr NEVILLE (11:44 AM) —I have heard today one of the greatest examples of mock indignation in my life, starting with the Leader of the Opposition, and going on with the member for Calwell who said that the minister was interrupting him. That would be a physical impossibility. Not only that; there are some very convenient gaps in the memories of the members of the opposition. To cite one of the great gaps in memory I will take you back to 1993 when you promised the Australian people tax cuts.

Mr Horne interjecting


Mr NEVILLE —Wait a minute! You promised them tax cuts—I am going to make a very important point here—then you promptly went in and put the sales tax up one per cent and, 12 months later, you put it up another one per cent. The point I make is this: during that period of Labor government, wholesale sales tax rose from $9 billion to $13 billion. What about the pensioners of Australia then? What about the low income earners of Australia? You did not offer them one cent of compensation, and you come in here today, beating your breasts with mock indignation, and talking about the poor children in the children's wards of hospitals. You are a disgrace!

I believe my electorate provides something of a litmus test for the attitudes of people in regional and rural Australia. At the last election, the majority of the people in Hinkler joined a select group. That group is the one which, as early as 1993, saw the need for a broad based consumption tax. That group is the one which recognised as early as 1993 the need for tax reform to create greater equity in income tax. That group of people is the same one which bucked the national trend and saw through Labor's scare campaign to elect me to this place in 1993. That group of people again saw through the scare campaign in 1998. Despite the facts that I had a horrendous redistribution, an 18 per cent One Nation vote and that my Labor opponent outspent me 2½ to one, they still would not accept your scare campaign.

Those people recognised back in 1993 that regional and rural Australia has been unfairly shackled by Labor's tax system—the sinister and hidden wholesale sales tax system which is embedded in every section of trade. The wholesale sales tax was described by Paul Keating in 1985 as `irrational'. He was hijacked by the minority interest groups which Labor is still pandering to at the expense of the greater good of this community. Those people in that select group I was speaking of recognise that the full potential of the outstanding farming, milling, grazing, manufacturing and export operations in my electorate can be fully realised only if they are free of tax on inputs.

Those people recognise that the solution to high unemployment levels in my electorate and many others in rural and regional Australia is to free up producers and exporters from red tape and the tax on raw materials so that they can put more of their resources back into their enterprises. By making Australia more competitive in this way, the outcome will be more jobs. The cost of producing these exports is expected to fall $4½ billion a year. I do not remember the member for Calwell or the Leader of the Opposition or anyone else who has spoken in this debate showing any real concern about where the jobs will come from. It is all this beating of the breast and rhetoric, but no solutions, no policies.

The Labor Party really gets on my goat on this issue. If the ALP was really in tune with the hopes, dreams and aspirations of regional Australians, then surely it would know deep down that it is vital to reform the way we deliver our tax policy. Perhaps it is just policy envy because they came so close to doing the same thing back in 1985.

Kim Beazley had a massive change of heart in 1985 when he backed Paul Keating's proposal to get rid of the wholesale sales tax and replace it with a GST. Remember the flowery statements? It was not only Kim Beazley and Paul Keating; it was also the member for Holt, the former foreign minister; and Wayne Goss, who was then Leader of the Opposition in Queensland. In 1985 and 1986, every Labor leader of note in this country said that the answer to our problems was to remove the wholesale sales tax and replace it with a consumption tax. You have not had the guts or the courage to do it—that is the problem. If he and others opposite had stuck to that vision then perhaps we would not have had the recession we had to have.

The people of Australia realised at the last election that the only way for the government to deliver a better policy for Australia was to switch the mix of taxes. The Howard-Fischer government's visionary plan gives Australia a fairer tax system that can deliver growth, exports and jobs into the next century. We are going to have a new system which picks up those who avoid tax now but at the same time slashes red tape.

Each Australian company will be given a business number, and it is only with the business number that they can be part of the system. At the moment, you could have one number for your company, another for your workers' compensation, another for your tax file, and so on. We will have a one-number system which will allow the Taxation Commissioner to police both the GST and company taxes. This will give us the opportunity to pick up the black economy. It does not take Sherlock Holmes to tell you that, if you pick up on the black economy, you can save up to $3 billion a year. That could go into the children's hospitals that the Leader of the Opposition so passionately talks about.

One of the key components of this package is the reduction of income tax to lower and middle income Australians. The threshold will be lifted to $6,000 and people earning under $20,000 will be taxed at 17 per cent instead of the Labor Party's previous 20 per cent. Then all earnings from $20,000 to $50,000 will be taxed at 30 per cent. That means—we have heard it before, but it bears repeating—that 81 per cent of Australians will be paying 30 cents or less in the dollar.

No matter how twisted the Labor logic is, health, education, child-care services, hospitals and nursing homes, local government rates, and water and sewerage charges will all be GST free. No matter how Labor tries to muddy the water, the rate can be locked in at 10 per cent. That can be done because GST is a growth tax that reflects population growth, which is where demand for government services comes from. That is, after all, why we collect tax—to pay for services demanded and rightly expected by the people who pay those taxes.

The Labor Party knows that special powers to be given to the Australian Competition and Consumer Commission will ensure that price reductions are passed on. The one thing that Labor stressed in 1985 was equity. As I said, 81 per cent of the population will be paying 30 cents or less in the dollar in income tax. This is where the key comes in. That means that the bottom 20 per cent of taxpayers will pay just two per cent of the total income tax burden, compared with 2.3 per cent now—do you notice that the opposition is very quiet on that point?—that is, over $13 billion a year in tax cuts for battlers.

Mr Sidebottom interjecting


Mr NEVILLE —It was your former core constituency who must realise their interests are now being better looked after by the coalition. As I said, the tax free threshold will be increased from $5,400 to $6,000. An extra $140 a year will be provided for each dependent child and an extra $350 a year will be provided for single income families with one child under five. I do not remember any of those things in the Labor packages. In addition, there are incentives for families to earn more by allowing them to keep more of their income and benefits.

Child-care assistance will be increased by up to $7.50 per week. Pensions and allowances will increase by four per cent. At every stage in this package, lower and middle income Australians have been looked at and cared for in a way that has not occurred in the last 13 years. Not only that, but many Australians from all income categories—including Labor voters—want income tax deductibility for their health insurance payments. The proposed 30 per cent rebate on private health insurance is exactly what that equates to and it will apply to 81 per cent of Australians. I commend the various bills and hope that they will lead to a far better quality of life for most Australians and in particular for low and middle income Australians.