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Thursday, 25 March 1999
Page: 4422


Ms KERNOT —My question is to the Minister for Transport and Regional Services. Does the minister stand by the Prime Minister's claim that the only GST losers will be tax cheats? Has he seen the new report of independent expert, Peter Dixon, that shows a scenario under which the GST will cost 16,000 jobs in regional New South Wales, 11,000 in regional Victoria, 12,000 jobs in regional Queensland, 2,500 jobs in regional South Australia, 1,600 jobs in regional Western Australia and 2,200 jobs in Tasmania—a total of 45,000 jobs in areas of high unemployment.

Government members interjecting


Mr SPEAKER —The member for Dickson will come to her question.


Ms KERNOT —Can the minister guarantee that all of these people will not be losers under the GST?


Mr ANDERSON (Deputy Prime Minister) —It is interesting that the opposite number in this regard is, of course, the person who facilitated the passage of Labor's increases in the indirect tax mix mess that they put up after the 1993 election—the Dawkins budget. There was no compensation then for pensioners. There was certainly no compensation for those people in rural Australia who were most affected by the increases in fuel tax—


Mr Crean —Mr Speaker, on a point of order which goes to relevance: the question was specific and clear—the GST package and the job losses, his comments and his guarantee.


Mr SPEAKER —The minister will respond to the question. It was not difficult to draw a bow between what he was saying and where he was going, but he will respond to the question.


Mr ANDERSON —I submit that the point is relevant because, in fact, their changes to the indirect tax mix did cost jobs whereas the assumption is made by—


Mr Crean —On a point of order, Mr Speaker: he is defying your ruling.


Mr SPEAKER —Order! I believe the minister was coming directly to the answer and that is why I had not intervened. If I thought he was defying the chair, clearly I would have intervened.


Mr ANDERSON —The point really is that whilst those measures cost jobs, the assumptions made by Dixon are inappropriate. Apart from the fact that we are not hearing from the opposition the full story on this work that has been done—which does point to the prospect for increased jobs in totality—the assumptions in relation to rural industries and regional areas are made on incorrect foundations. For example, there seems to be an assumption that making Australian rural and regional export industries more competitive means that we will therefore produce too much of them, we will flood global markets, the price will come down and somehow there will be fewer jobs. I do not believe that that is realistic at all. I think the assumptions made about elasticity of demand and supply and prices here are inappropriate.

In reality, global economic strength, international seasonal circumstances where agricultural products are concerned, the corrupt world markets that we sometimes face as a result of activities in Europe and America: these factors will have more impact on global supply and demand and price than taxation reforms here at home in Australia. The reality is that a more competitive tax system will boost exports, boost economic growth and boost jobs. That applies to rural and regional Australia as much as anywhere else.