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Wednesday, 17 February 1999
Page: 3001


Mr CADMAN —My question is addressed to the Treasurer. Can the Treasurer advise the House if he is aware of any recent statements in relation to tax reform by church groups? Can the Treasurer detail his response?


Mr COSTELLO (Treasurer) —I thank the honourable member for his question. I am aware that a task force prepared a report for the Primate of the Anglican Church of Australia yesterday in relation to the government's tax package. As would probably be known, at least going back to 1993 the church has strongly opposed tax reform. But I welcome the fact that I think this probably represents the most open statement to date by the Anglican Church and by the churches generally of support for tax reform in this country. The news release which was put out by the Primate of Australia was headed `Anglican Church says yes to GST but questions adequacy of compensation package'. The statement says:

The Anglican Church of Australia generally supports the Australian Government's goods and services tax initiative and other reforms to the taxation system.

We welcome that as a positive contribution. The Australian Labor Party, of course, has a closed mind on tax reform. If there is one group in Australia that will oppose every reform, it is the Australian Labor Party. So I welcome the fact that the Anglican Church says that.

The subcommittee was divided on the question of whether or not GST should extend to food. It did not in fact find that GST should not apply to food. It divided on the question. It then went on to say, as the government says, that compensation for tax changes is necessary. It raised a number of things that would have to have been done if GST were not applied to food. It raised the possibility of taking back income tax cuts. This government won't be taking back income tax cuts.

It raised the possibility of increasing the GST rate from 10 to 11 per cent. This government won't be increasing the rate of GST. It said that the important thing was to make sure that there was adequate compensation—a point that this government completely agrees with. This government is going to be increasing pensions by four per cent. We are going to be introducing bonuses for aged persons to look after their savings. We are going to be increasing the amount of family allowance, lifting the means test and reducing the taper rate. We are going to be lifting the value of all allowances.

After—what is it now? Since August of last year—some six months of every interested group in Australia going backwards and forwards through the government's tax proposal, they have not identified one demographic that will be worse off as a result of the tax changes. In fact, ACOSS found that all demographics, including pensioners, would be better off.

This contrasts of course with 1993 when the Australian Labor Party, on the votes of the Australian Democrats, and it is their economic spokesman who is now a Labor frontbencher, hiked all indirect taxes in this country, including petrol taxes, and paid compensation of zero—not one single dollar—and took away income tax cuts, again on the urging and with the support of the Australian Democrats.

These must be the only tax changes, at least in the last decade and probably for decades in Australian politics where there has been compensation—and more than adequate compensation. That is what makes this tax package different, and that is why the Australian public are entitled to have a new tax system, their income tax cuts in full, their increases in allowances and benefits; and every day that the Labor Party engages in cheap populist nonsense is a day they hold back a new tax system for Australia.