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Thursday, 10 December 1998
Page: 1844

Mr CREAN (12:29 PM) —I move:

(1) Clause 4, page 2 (line 12), omit "10%", substitute "0%".

I move this amendment for two reasons: one to demonstrate how simple it is for this government to change the tax rate by a simple decision of the parliament to change the rate which they said was locked in by the so-called `fantastic mechanism', to quote the Treasurer; and, second, to reinforce the point that, if we have already started to see the government, under pressure, agree to extending the exemptions to the GST, why not take it to the fullest extent and exempt everything? What they could have on the books is the technicality of a GST and no rate.

I want to go to this issue of the lock-in of the mechanism because this was heralded with great triumph by the Treasurer when his package was announced. He referred to it, and I mentioned the words before, as a `fantastic mechanism' for making sure that the rate once struck is locked in. But where is this fantastic mechanism in the legislation? The only reference one can find in the 1,000 pages of bill and explanatory memorandum is contained in clause 1-3(b) which says:

The Parliament acknowledges that the Commonwealth:

. . . . . . . . .

(b) will maintain the rate and base of the GST in accordance with the Agreement on Principles for the Reform of Commonwealth-State Financial Relations endorsed at the Special Premiers' Conference in Canberra on 13 November 1998.

So here we have this fantastic mechanism being based on an agreement on principles—the principles of which still have to be thrashed out and which, when I asked the Treasurer in this parliament where his mechanism would be, he said we would have to wait on.

What is he hiding? If in fact he has got this fantastic watertight mechanism developed, why isn't it in his legislation? Why isn't it the subject of scrutiny in the Senate where the inquiries are taking place? We know this government will not answer the question. But the issue is: where have they guaranteed the lock-in?

To demonstrate how simple it is to change the rate, all that is required is a bill to be introduced into this parliament. In the schedule to that bill—called a taxation reform act 1999—is a two-line entry. The first is to repeal the part that levies the rate at 10 per cent and, secondly, to omit `10 per cent' and substitute `15 per cent'.

Let us not have any of this nonsense about the veto powers. A simple act of parliament will increase this GST. Why is it so simple to do it? Because we are demonstrating it here today. We are demonstrating by an amendment that you can turn the rate from 10 to zero. It is validly before the parliament, and the parliament will decide whether it gets up. Remember that Labor will be voting against the GST and the coalition will be voting for it. There will be 10 per cent on almost everything you buy. From the cradle to the grave, there will be a new 10 per cent tax on everything.

That is what they want to impose, and they will have you believe that the rate will not increase. Do not believe them. Do not believe them because the rate can be changed by a simple act of this parliament. If anyone doubts that this can happen, of the 25 countries that have introduced a GST, 22 have put it up. And another one—Switzerland—is about to put its up. Do not believe them when they say that the rate will not rise.

We are still looking for the `fantastic mechanism' of lock-in, and so is Jeff Kennett. Jeff Kennett has written to the Prime Minister saying, `You have dudded me, Prime Minister. You told me that there was a lock-in mechanism.' (Extension of time granted) But this is not the first time that Jeff Kennett has attacked this legislation. He did it again today by saying he wants the 10 per cent disclosed on all receipts. That is something that this government have just voted down. Not only are they imposing a 10 per cent tax; there is also no mechanism to ensure it cannot rise and there is no mechanism to identify the precise amount. This amendment should be supported.

Mr DEPUTY SPEAKER (Mr Andrews) —Order! The time allotted for the remaining stages of the bill has expired. The question is that the amendment be agreed to.