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Wednesday, 9 December 1998
Page: 1691


Mr BARRESI (12:07 PM) —I rise to speak on the A New Tax System (Goods and Services Tax) Bill 1998 and cognate bills. The 1998 parliamentary year draws to a close, and members on this side of the House can feel a good deal of satisfaction with another year of strong economic performance. With inflation at record low levels, interest rates that we have not seen since the 1960s, the job outlook the brightest for a decade, low unemployment in Deakin, and growth rates of five per cent defying expectations, Australia has the strongest economy in the region. While our neighbours have gone into a tail spin, our economy has bucked the regional trend. Not only have we appeared to weather the storm but we are continuing to grow.

Terry McCrann has little doubt where the credit lies for that. The other day, he wrote in the Murdoch press that the Treasurer, and the Reserve Bank chief, Ian Macfarlane, can claim much of the credit. He went on to say:

. . . thinking Australians should breathe a big sigh of relief that Kim Beazley and his assorted policy vandals did not sneak into government at the election.

Future generations will look back on 1996 and be thankful that Australians kissed Labor and its policies goodbye. It is frightening to think where our economy would be now if the people had not shown such wisdom.

Again, future generations will be grateful that, in 1998, the people re-elected a government that is prepared to take the bull by the horns and reform a tax system that handicapped our past performance and threatened our future. It is rare that an Australian government—or, for that matter, any government—has gone to the people seeking such sweeping reform as this. It is just as rare for a government to be returned by the people after campaigning for extensive change.

Far from there being insufficient time for this debate, the Howard government showed all its cards early. The Australian people liked what they saw. The efforts of the previous government were characterised by no support, no election, and no consultation with the electorate. We did not see that in the 1998 election campaign with what the government took to the people.

This plan originated in an open manner with submissions being taken by the Prime Minister's Tax Consultative Task Force—of which I was proud to be a member—which contrasts greatly with the post-1993 Keating government's performance. We are back here not to dream a political fantasy but to deliver a new taxation system: a system that is fair and provides a satisfactory base for our future needs. Our current system has outlived its usefulness; it is unfair and inadequate. The system itself is a tax on Australia. The faster we want to go as a nation, the more it slows us down.

Even some of the more rational Labor members admit this in private—but not here. It is only when they retire or resign from office, or lose at the polls or, in some cases, get banished to the back bench, that they are finally free to express their true feelings—as evidenced by the former member for Petrie's recent comments about Labor's lacklustre policy performance. Most of the current Labor crowd think there are votes in their opposition to our program. However, in the electorate, people do not see opposition; they see Labor's lazy and hypocritical attitude.

The member for Hotham is, predictably, leading the charge against meaningful tax reform. He is leading the charge against anything meaningful. On Monday, he came in here and, with a straight and earnest face, mustering all his thespian abilities, proclaimed that our tax system is fine and that it is all okay. His view would appear to conflict with that of 82 per cent of the Australian public. Opinion leaders, media commentators, business and community groups have all agreed that the member for Hotham's perfect tax system is `broke' and needs to be fixed.

The member for Hotham is a man who never met a tax he did not like. But he is now pleading the case against a GST—a tax which will reduce taxes and, in many cases, reduce the prices on items we purchase. He is still strong on the idea that a salacious government would be able to raise the level of a GST. We know that only a greedy Labor administration such as the Keating-Beazley crowd would countenance such a thing, but even they would not be able to pull this off.

No other nation has had the safeguards that Australia will have against raising the level of indirect tax. Once it is set, even the `tax and spenders'—the political descendants of Bannon and Cain—will not be able to hike up the rate. With electoral cycles as they are, with an election somewhere in Australia almost every year, which state premier would dare to take a chance by voting to increase the rate and then face the people in an election that year? It is a safeguard which has been brilliantly thought out and which will succeed. It is ludicrous to compare us with other nations. No other country has had a tax system exactly the same as ours. With our current mess—the mess that Labor wants to prolong—it is no wonder.

This almost maniacal fixation that Labor has on the GST ignores the savagery of our income tax set-up. In 1955, personal income tax accounted for 38 per cent of government revenue. Today, it accounts for 52 per cent. Australian workers pay far too much income tax. When the nation begins its new tax year on 1 July, we will all be working hard for the tax man. A single income person with a taxable income of $35,000 pays $8,477 in income tax, including the Medicare levy. That means that he or she will work until AFL grand final day to satisfy their responsibilities to general revenue.

Someone on $41,000 will toil until they do 162 laps of the Mount Panorama circuit on Bathurst Sunday to do the same. It gets worse. Those with a taxable income of $44,000 will discharge their duty to the public purse about the time that Might and Power wins next year's Cox Plate. So it goes on. It will be Derby Day before someone on $55,000 pockets a cent for themselves—near enough to four months, or one-third of a year, as indentured slaves to the Australian Taxation Office.

Under the coalition plan, the taxpayer on $35,000 will have earned his income tax for the year by the end of August. The taxpayer on $50,000 will be done by the end of September. Both will pocket the equivalent of an extra three weeks pay a year. The 10 per cent GST will replace hidden, indirect taxes on a whole host of products. We all pay these taxes, and we pay them at seven different rates, from nought to 44 per cent.

Labor gave only grudging recognition to this problem in the last parliament. Its own tax plan offered only to tax caviar and to change the rate on orange juice. Its so-called tax plan was as transparent as it was pathetic. The people of Deakin realised that it was cobbled together in a hurry, a bit like the member for Jagajaga's speech last night. Like her speech, the plan made no sense, was chock-full of untruths and addressed none of the issues. In contrast, the member for Herbert illustrated very well the anomalies and the stupidity of Labor's wholesale sales tax system. Under the current farcical system, we have companies arguing with the Taxation Office over whether a product is a biscuit or a chocolate bar, because each is taxed at a different rate. We have the same product taxed at a different rate, depending on whether you call it a credenza or a sideboard. We all know that these wholesale sales taxes penalise exports, which have been a real boon for growth and jobs in this country. We all know that FID, BAD and stamp duties are a burden for business and individual alike, yet Labor defends these taxes. Labor wants these taxes to be prolonged and to continue being a burden to our businesses.

The Leader of the Opposition asked us during an MPI debate last week to imagine the crisis we would be in if Labor had not encouraged the broadening of our export base. He invited us to close our eyes and follow his yellow brick road of fantasy—the `would be if could be' achievements of a fanciful government. The problem is, the people have had their eyes open since 1996. They awoke after a 13-year nightmare. In contrast, the economic performance of this government is not a dream but a reality which all Australians can rightfully be proud of playing a part in. You may say he's a dreamer, Mr Deputy Speaker, but he's not the only one. I wonder if he can imagine the extra business our exporters would have enjoyed for a dozen years if Labor had possessed the ticker to reform the system in 1985, when they believed in change and when they were answerable to the people. Back then, as a government minister, the member for Brand supported a broad based indirect tax. Now he is clearly putting the interests of the Australian people a distant second to the survival of his shaky leadership.

The Labor Party's only crack at reform was a belated response to the coalition's Fightback plan. They promised not to put up taxes. As soon as they were elected they did—to the tune of $10 billion. They put up the Medicare levy by 1.5 per cent, increased company tax from 33 per cent to 36 per cent, and hiked taxes on cars, petrol, and everything from buckets to horse rugs. In return, they promised income tax cuts, l-a-w law style. They did not deliver. Once again, it was the battlers that got hurt. Then again, Labor has consistently hurt those it claims to represent. Those on lower incomes, on fixed incomes or on government benefits will all gain from this package. A very important mechanism in this plan is the measure to increase benefits by four per cent up-front—and then ensure that they stay at a level of 1.5 per cent above the CPI. Yet we have heard nothing from the other side on this or the other advantages of our plan. Rather, we have been subjected this week to the same tripe that Labor foisted on the people during the campaign.

It is almost comical to hear these Labor ideologues come in here and say that the people will reject these reforms at the next election. Some of them have learnt in just six weeks what it took Paul Keating more than a decade to learn—that is, to totally ignore the message and mood of the electorate. The voices of the people are loud and clear: `We are sick of the arguments—just do it. Get it done, give us a break, and give Australia a future. That's what we elected you to do.' Many in the electorate may now be unaware that we cannot achieve this without the votes of some Labor, Democrat or Independent senators in the other place. I can guarantee that that situation will have changed well before the next election. I urge all members to support these bills.