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Thursday, 18 February 1999
Page: 3177

Mr NEVILLE (12:18 PM) —I am pleased to talk on the A New Tax System (Trade Practices Amendment) Bill 1998 . The question I am probably asked most about tax reform implementation—and have been asked as far back as the 1998 campaign—is, `How are you going to make them pass on the savings?' `Them' invariably refers to the three major supermarket chains in particular and business in general. I am not being at all disparaging of business—although I do have a very strong view on the centralisation of ownership of supermarkets, but that is not the question we are looking at here today. We are simply stating the fears of ordinary people as they express them to their members of parliament.

Naturally, I did what I could to explain how the government would achieve what it desired. Hence, I am delighted to see this bill introduced. The integrity of the GST system could well depend on the effectiveness of this scheme. However, I do not think it is reasonable, as the member for Rankin said, that because $27 million is being spent that necessarily reduces it to dividing that by every business in Australia. Obviously, other factors will determine whether or not there are complaints.

Not every business in Australia is shonky. A lot of businesses will act on a sectoral basis rather than on an individual basis and, if it is found that $27 million is not enough, then no doubt we will do something about it. But it is true to say that people are worried and concerned that, although the tax reform package sounds good in theory, the flow-on of price reductions could be diverted during the transitional period by businesses acting to distort the benefits, and thus increase their profits. We have heard that the figure of 1.9 per cent is the likely increase. We also had evidence from Treasury that it could be as low as 1.8 per cent.

In this legislation, we are putting the concerns of ordinary Australians to rest. We are going to make sure that no business or entity can profiteer at the expense of the rest of the community. It is about time a government came along that was prepared to do more than just put measures in place and expect the market to act fairly. While most people in the market act fairly and most people react to competition, I recognise that there are some who will not. It raises the question of just how moral the market really is. I may be cynical, but neither I nor the government is naive enough to think that all the participants in the market will act in the best interests of consumers in my electorate or, more broadly, across Australia.

That is where the Labor Party went wrong with its reform program in previous parliaments when it was in power. It caused a lot of hurt and damage in the bush. Regional and rural Australia is still hurting from many of its policies. In fact, the ALP itself actually participated in the system of hurt when the Keating government raised sales taxes by one per cent across the board for all wholesale sales taxes, not once but twice, during its 1993-96 term of office, to say nothing of the five per cent loaded onto cars.

Let me remind the member for Rankin—and I am sorry he is not here to hear this—that there was no one-off compensation for pensioners at that time. There was no compensation for low income earners. There was no assistance for people whose car prices went up by five per cent. Those people, I might add, were already being hit by increased excise. As we know, the same Labor government increased excise by two per cent on leaded petrol, supposedly for environmental purposes, but there was not a person in Australia who did not believe that that was just a revenue raising matter. In fact, when the increase was first introduced it was 5c a litre, but the Labor government backbench almost revolted on the issue and that is why it was brought back to 2c a litre.

We are talking about pensioners and low income earners and, when you think about it, they were the people who had the cars that used leaded fuel. There was no one-off compensation for the pensioners in that package. There was no one-off compensation for the low income earners. The people who were most affected were those who were least able to buy the new cars. So don't let us have all this pious nonsense that you are concerned about the low income earners and the pensioners. When you were in office, your own track record does not bear examination.

I believe the new tax system will impact in a much fairer way on consumers if there is a carrot and stick system adopted. The carrots for business are the inherent benefits of the new scheme which will cut red tape and taxes on production and create a level playing field for Australian business, primary producers and exporters, while the stick is the power and resources that the bill gives to the ACCC to discipline exploiters and rorters.

We promised to protect the community at large from unprincipled business operators that might seek to engage in profiteering and exploitation during the transitional period of the new tax scheme. This government has always taken its duty of care for Australian people seriously, and this matter will not be any exception.

We recognise that the concerns of people are legitimate. This is a very complex and muddied area, and we do not want to degenerate into the populist scaremongering that occurs when some new measure is introduced to the Australian community. It is very interesting that the member for Werriwa talked about the `scab-lifting' of the ALP. It refuses at times to look at these things in a positive way, but lifts the scab on its own performance in past eras. I repeat: we recognise that the concerns that people have are legitimate, and we intend to ensure that the weak are protected from the strong.

Treasury's economic modelling of the CPI effect on the removal of 10 indirect taxes and the introduction of the GST assumes that all participants in the chain will pass on the savings on their costs and prices. In order to arrest the concerns that this will not be done, the ACCC will have sweeping new powers vested in it and significant additional resources to draw on during the transitional period of the three years from July 1999 to July 2002. It is not a tame measure, as the member for Rankin has suggested. Businesses will face the prospect of public exposure and severe financial penalties of up to $10 million for corporations and $500,000 for individuals if they use the transitional period as a cover for taking advantage of customers.

The best way for business to avoid public exposure in the Treasurer's foreshadowed quarterly reports and the relegation to `shame files', with a consequent nasty hit on the hip pocket, is, of course, to do the right thing. It is the only way to treat them. The ACCC will name names to ensure that unscrupulous operators receive the maximum negative publicity for their actions. Here is where the media organisations, whether they be national, metropolitan or provincial, can play a crucial role in the success of the new tax reform regime and, at the same time, do an invaluable service to their readers, watchers and listeners. There would be nothing worse for businesses in provincial centres like Bundaberg, Gladstone and Rockhampton and, indeed, in the smaller towns in and around my electorate than to be publicly named and shamed by the local media in such a way.

I would envisage that newspapers could run columns such as `GST watch'. Talkback radio programs could have a GST watch segment. The local television could carry regular GST enforcement items in their news bulletins. The media have generally played a very negative role in this whole debate because it is in their nature to be rather reactionary. In this particular instance, they could take a positive proactive role and see that the measures that the government and the ACCC will implement are enforced to the full. However, the consumer interest and feature pages contain advice on investment and money management and have provided excellent services of good information for people thirsting for real explanations, and I applaud their efforts in this field. I therefore ask them that, with columns such as `GST watch', they carry out a similar activity.

Having said that, this is not to be a Spanish Inquisition. We recognise that many factors affect prices and any genuine price increases will not be prosecuted, although there will be an onus of proof on the various retailers and businesses to demonstrate that the increase is not exploitative and is a reflection of a genuine increase in costs. The ACCC will set guidelines about when prices may be regarded as exploitation. The methods that will be particularly harmful to those who want to exploit this period of transition are these: failing to reduce the price of an item on which the amount of tax falls because the GST payable is less than the total wholesale price previously paid in respect of that item, and increasing the price of an item by more than the actual price effect of the GST on that item.

The ACCC will also have the power to prosecute and seek court injunctions or accept voluntary undertakings in relation to the price settings. That is quite an extreme power, and I hope it is exercised. It goes further because the ACCC will also be empowered to issue a notice to a business specifying the maximum that may be charged for the supply of a particular product. This will act as a warning to a business that, if it charges a price in excess of the maximum, it will be engaging in exploitation. That is very important because it means the ACCC can be proactive and not simply reactive.

I urge the states and territories to apply the new tax system price exploitation code outlined in the bill to their own legislation as soon as possible and without any fiddling at the margins. Perhaps a Labor government might be tempted to have a go at this just to muddy the waters of the GST scheme, although I hope that will not be the case, but I believe if any state government did that for purely exploitative political purposes they would be judged very harshly by their citizens.

In conclusion, I am sure all members will agree that there are substantial penalties and sanctions outlined in the bill. The powers this bill will vest in the ACCC are a first for Australia. We are indeed handing them a very heavy stick to wield, and I am sure that this will place in the minds of people in my electorate and in other parts of Australia the sort of confidence they need to embark on a very interesting period in Australia's political history, one which I think will make us world competitive. It will go a long way to job creation. There is no stronger evidence than this bill of the government's absolute and resolute determination that all Australians share in the full benefits of this revolutionary—and, we trust, very positive—tax system for the Australian people.