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Wednesday, 9 December 1998
Page: 1749

Mr PRICE (4:22 PM) —I very much appreciate being given the call, Mr Deputy Speaker. There is no doubt that in the electorate of Chifley, like in the rest of Australia, the GST was the focus of our election campaign. I am very privileged to have received the support and encouragement of our party members and volunteers. In particular, I wanted to name a few of them who really made a tremendous contribution: my campaign director, Tom Kenny, Jim Maynard, Cath and George Young, Vince and Gwen Grinham, Andrew Rylewski and Sumalya Chakraboorti. They were tremendous in the office and in helping us in our campaign on the GST.

Campaigns are usually about two alternative party manifestos and you are out there trying to sell and plug away at it. But the 1998 campaign, like the one in 1993, was very different. The cornerstone of the government's policy was the GST and it was pushed to the Australian people. I was very disappointed to see what was basically the corrupt misuse of $17 million of taxpayer funds to promote a community education program about the tax package and particularly about the GST. On the Labor side we were very much opposed to a GST and we did have an alternative plan.

In terms of mandates, a lot of people have concentrated on the fact that the government won the election in the House of Representatives—not with a clear majority of voters, but undoubtedly they won the election—and have then concentrated on the issue of whether or not the Senate has a mandate as a result of the election. I do not want to reflect on those arguments. However, as a Labor member I fundamentally believe that governments, whether they be conservative or Labor, should be allowed to get on and govern. That is why I think this election was so unusual in the sense that we on the Labor side specifically campaigned against the GST as we did in 1993. That is why I have no difficulty saying to my electorate, `Thank you for your tremendous support.' There was absolutely no doubt in the electorate of Chifley where I stood on the GST. Now that the people of Australia have made their decision in the election, I will still be voting against this particular measure.

Why am I opposed to a GST? I know that the Liberals have previously used the argument about the 1985 tax summit. I would like to place on record that we probably have to go back to the Second World War to find a contribution by a federal Treasurer similar to that of Paul Keating's in fundamentally changing the economy the way he did in his period as Treasurer. In 1985 we had the summit and quite a number of proposals were put to it. At the end of the day a GST was not adopted, so a GST has never been part of the Labor Party's policy platform. Clearly we believe that if there were an appropriate opportunity or need to introduce a GST, that need has long gone.

Of the electorates throughout Australia, mine is one that is going to be very savagely hit by the impact of a GST. I particularly regret the impact on older Australians. After all, they have worked all their lives and in many cases they have contributed to the national welfare fund for their pension. They are now in retirement. They have actually paid income tax on whatever savings they have made or assets they have accumulated over their lifetime of contribution. Part of the proposal for the introduction of a GST is to lower income tax but increase the cost of consumables. Clearly, if there is a group of people who are going to be losers from a GST it is the elderly. I particularly value and esteem my senior citizens in my electorate of Chifley.

I also have many battling families in the electorate of Chifley. It is nice to have theoretical arguments about discretionary dollars, but by and large my constituents—whether they are buying their first home, renting privately or in a housing department home—spend their last dollar of income every week or fortnight that they receive it just on living. So if you are introducing a consumption tax like a GST then you are hitting them.

Whilst Treasury has modelled long-run inflationary impacts of the GST, it is not clear from Treasury what the short-run impacts are going to be. There is also some question about whether the percentage they have indicated as the long-run inflationary impact is realistic. In the future we will have an opportunity to evaluate that point. I suspect we will be reminding coalition members of that point in the future.

You would never guess, listening to the constantly repeated rhetoric in question time, that either the Prime Minister or the Treasurer had ever uttered in their whole lives a derogatory remark about a GST. But John Howard said this on the Channel 9 Today program in January:

People get the idea that it's the economic elixir of Australia . . . I don't think people should make the mistake of imagining that a dramatic change to the tax system is going, of itself, to transform the economy—

or his `never ever' statement. In 1996 Peter Costello said:

I pushed the GST . . . (but) I honestly think now it's receded from consciousness, it's being invested with some snake-oil qualities.

I suspect that those statements made by the Prime Minister and the Treasurer are both as equally valid today as when they were made. They have undergone some tremendous transmogrification of their views, but they have never adequately rebutted what is on the public record.

Indeed, I notice the honourable member for Page is talking about the export benefits of a GST. There is no doubt that there will be some benefits, but the best estimate is about a one per cent difference. Changes in terms of trade or changes in the currency have delivered far more to exporters than that benefit.

I understand a lot of Australia's exports are price competitive, but the really big difference that we have made is to broaden the range of goods and services that are being exported and, increasingly, they are not as sensitive to price fluctuations as they once were. Even in commodities—even in agriculture—we are value adding our products and congratulations go to the sector for doing it, but when you value add, you add a premium and the product itself becomes less price sensitive if you are marketing it well. I am not saying price is of no concern, Mr Deputy Speaker, but you really cannot get very excited about a one per cent change to prices through a GST.

A GST will not create any jobs. It is not a solution to job creation. I cannot say to you, Mr Deputy Speaker—nor can a coalition member say—that the day after we introduce a GST we will see an explosion of jobs in Chifley or in any other electorate. The policy settings needed to create jobs are very different: we need to support Australian industry and innovation and we need to have a skilled work force. These issues are far more important to me.

For example—just to quote one figure—35½ per cent of people in my electorate left school at 15 years of age or under. This places them at an enormous disadvantage in the labour market. But I say they are intrinsically, as Australians, very worthwhile people. I would like to see this country investing in these people—investing in skills, training and education—and allowing them, through the skills that they acquire, to compete in the labour market and have a rapidly growing economy. The GST is not going to do one jot to change that equation in the electorate of Chifley.

Because we are all on limited time, I will conclude on my next point, although there is a lot more I wanted to say. A GST is not going to fix up the black economy. One of the examples I like to quote is that of a mate of mine, Peter Baxter, who is a plasterer. He works in a partnership, but if he decides to work two days a week for himself and has a revenue of less than $50,000, he is not subjected to the GST. This is not illegal, but here is a clear way small businesspeople can legitimately minimise the impact of the GST. There is absolutely no overseas experience that members opposite can quote which suggests that a GST is going to close off the black market economy or tax avoidance. In fact, when you go from 75,000 people who submit wholesale sales tax returns to—I think—about 1.4 million, there are going to be great opportunities for this.