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- Start of Business
- MINISTERIAL ARRANGEMENTS
QUESTIONS WITHOUT NOTICE
Timor Gap Treaty: Interim Arrangements
(Brereton, Laurie, MP, Downer, Alexander, MP)
East and West Timor: Displaced Persons
(Andrews, Kevin, MP, Downer, Alexander, MP)
Business Tax Reform: Trusts
(Crean, Simon, MP, Costello, Peter, MP)
Business Tax Reform: Capital Gains
(Georgiou, Petro, MP, Costello, Peter, MP)
Business Tax Reform: Charities
(Crean, Simon, MP, Costello, Peter, MP)
Rural and Regional Australia: New Apprenticeships Program
(Brough, Mal, MP, Kemp, Dr David, MP)
Republic Referendum: Proposed Model
(Andren, Peter, MP, Howard, John, MP)
Goods and Services Tax: Price Rises
(Bartlett, Kerry, MP, Costello, Peter, MP)
- Timor Gap Treaty: Interim Arrangements
- DISTINGUISHED VISITORS
QUESTIONS WITHOUT NOTICE
Goods and Services Tax: Site Fees
(Albanese, Anthony, MP, Anthony, Larry, MP)
Employment and Unemployment: Policies
(Billson, Bruce, MP, Reith, Peter, MP)
Goods and Services Tax: Charitable and Non-Profit Organisations
(Swan, Wayne, MP, Bishop, Bronwyn, MP)
Social Security: Fraud
(May, Margaret, MP, Anthony, Larry, MP)
(Griffin, Alan, MP, Wooldridge, Dr Michael, MP)
Natural Heritage Trust: Native Environment
(Lindsay, Peter, MP, Tuckey, Wilson, MP)
Health: MRI Scans
(Macklin, Jenny, MP, Wooldridge, Dr Michael, MP)
Tourism: Overseas Visitors
(Charles, Bob, MP, Kelly, Jackie, MP)
Health: MRI Scans
(Macklin, Jenny, MP, Wooldridge, Dr Michael, MP)
Rural and Regional Australia: Government Support
(Lawler, Tony, MP, Anderson, John, MP)
Health: MRI Scans
(Macklin, Jenny, MP, Wooldridge, Dr Michael, MP)
Centenary of the Boer War
(Ronaldson, Michael, MP, Scott, Bruce, MP)
- Goods and Services Tax: Site Fees
- AUDITOR-GENERAL'S REPORTS
- MATTERS OF PUBLIC IMPORTANCE
- ASSENT TO BILLS
- MAIN COMMITTEE
- MATTERS REFERRED TO MAIN COMMITTEE
- BILLS RETURNED FROM THE SENATE
- APPROPRIATION (SUPPLEMENTARY MEASURES) BILL (No. 1) 1999
- APPROPRIATION (SUPPLEMENTARY MEASURES) BILL (No. 2) 1999
- FURTHER 1998 BUDGET MEASURES LEGISLATION AMENDMENT (SOCIAL SECURITY) BILL 1999
- TELECOMMUNICATIONS (INTERCEPTION) AMENDMENT BILL 1999
- DIESEL AND ALTERNATIVE FUELS GRANTS SCHEME (ADMINISTRATION AND COMPLIANCE) BILL 1999
- Melbourne: Western Suburbs
- Australian Citizenship: 50th Anniversary
- Canning Electorate: Road Train Trial
- Health and Medical Research
- Six Billion People Day
- Australian Defence Force: Crocodile 99
QUESTIONS ON NOTICE
Department of Health and Aged Care: Payments to Organisations
(Bevis, Arch, MP, Wooldridge, Dr Michael, MP)
Department of Health and Aged Care: Library Services
(Crosio, Janice, MP, Wooldridge, Dr Michael, MP)
Pensions: Disability Support
(Latham, Mark, MP, Anthony, Larry, MP)
Broadcasting: Advertising Complaints
(McClelland, Robert, MP, Hockey, Joe, MP)
- Department of Health and Aged Care: Payments to Organisations
Tuesday, 12 October 1999
Mr EMERSON (10:07 PM) —Just as the GST will prove to be, in the prophetic words of the Treasurer, a nightmare on main street, so too will the Diesel Fuel Rebate Scheme prove to be a nightmare on Mount Lindsay Highway, for Mount Lindsay Highway is a major road that travels through the electorate of Forde and into my electorate of Rankin. This scheme will be wide open to rorting.
The member for Dawson spoke euphemistically about grey areas. What she is referring to is opportunities for rorting of this scheme. In response to those opportunities that are created by this hastily cobbled together scheme, the tax commissioner has been given very strong powers indeed because the government knows that the arrangements that have been put in place through this legislation are wide open to rorting.
I draw the attention of the House to some of the provisions of the enforcement scheme that is being put in place through this legislation. On production of an identity card to an occupier, authorised officers must be given entry at any reasonable time to land or premises where those officers have reason to believe that there are documents, goods or any other property relevant to the operation of the act. The officers are to be given full access to documents, computer files, goods or other property. The occupier of the land or premises will be obliged to provide the officers seeking access with reasonable access and assistance, including advice, as to where relevant information is kept. If an authorised officer has reasonable grounds to believe that a vehicle is involved in obtaining fuel grants, the officer may stop the vehicle for the purposes of searching it or for taking a fuel sample. That is where the dipsticks come in. They have moved from thermometers in chooks to dipsticks in diesel fuel tanks. An officer of the government can follow a truck driver into his or her house and demand the production of documents and can get out the dipstick and put it in the fuel tank to seek to enforce what is an ill-conceived and hastily cobbled together scheme.
I point to some of the anomalies that already appear to be in this legislation. For example, it appears that an applicant driving an eligible vehicle is entitled to a grant for the entire journey from a non-metropolitan to a metropolitan destination. Yet an identical journey in the other direction seems to be eligible only for that part which is outside the metropolitan area. The consequence of this is that it would increase the cost of goods transported to regional areas compared to identical trips in the opposite direction. Surely this is not an intention of this legislation. The intended consequences of this legislation are bad enough as they are, but, if this is correct, this is one of the many unintended consequences of the legislation, where trips one way are given the full diesel fuel rebate but only part of the trip coming the other way would be given such a rebate. This is a hastily cobbled together scheme.
I would like to commend the member for Calare, representing a rural electorate, who spoke eloquently of the shortcomings in this legislation and predicted—I believe quite accurately—that the Diesel Fuel Rebate Scheme will not reduce the cost of goods and services delivered in rural and regional areas very much, if at all. It is being hailed as a great boost to rural and regional Australia, but when you look at the impact of this so-called reduction in the cost of diesel fuel and trans late that to the cost of a typical good or service delivered in those areas, it will be infinitesimal at best. There are legitimate grounds for fearing that the operators will appropriate those gains anyway and they will not be passed on to consumers. So what are we going to have? We will have the dipsticks and the ACCC out there monitoring the passing on of any savings to consumers. This is a nightmare on Mount Lindsay Highway. This scheme was cobbled together for one reason and one reason only: to obtain Democrat support for the GST.
This legislation is completely silent on what constitutes an urban conurbation. In my own electorate of Rankin, I am already receiving calls—some of them outraged—at the lack of definition of it. One call has come from a truck operator from the suburb of Algester, on the southern outskirts of Brisbane, but still within the boundaries of the Brisbane City Council. This person said, `It appears I may not be eligible for this rebate scheme.' I would say that it is highly likely that that operator will not be eligible for the rebate scheme, because he lives in what may well be defined as an urban conurbation.
When we go further south towards the New South Wales border, where will that line be drawn? Will it be drawn at the border, at the Tweed River and the New South Wales-Queensland border? If it is, then an urban conurbation will include one of the largest world heritage areas in Australia—the scenic rim rainforests. Is this a definition of an urban conurbation? We do not know yet, because this legislation is completely silent on that. I am already getting calls from people saying, `Under this scheme, will I get the rebate or not?' The answer I must give is, `I have no idea, because the government has no idea as it has not grappled with the difficult task of defining what an urban conurbation will be in south-east Queensland.' Will trucking operators just south of the border get a competitive advantage over trucking operators located in places like Beaudesert, Boonah and Kalbar? I do not know, because the government does not know as it has not addressed this issue.
There is no doubt that this scheme will increase greenhouse gas emissions. As an offset to the impact of this scheme on greenhouse gas emissions, the Democrats demanded and obtained a fuel conversion program. Questions have been asked about this in the Senate in the last 24 hours, because the government has appropriated $75 million over four years to convert 800 buses and 4,000 trucks, which is out of a population of 1.9 million eligible vehicles. That works out at a cost of around $15,000 each.
The important point is that the government's target estimate is that converting these trucks and buses from diesel to compressed natural gas will reduce greenhouse gas emissions by 400,000 tonnes per year. It is not just a target. The Special Minister of State, Senator Ellison, said last night:
We have said in this program that we have a target of 400,000 tonnes less emission after four years. That is a target we intend to meet. If we are to meet that target, we will have to spend these funds wisely, because if we do not, we will not meet the target; and if we do not meet the target, we will be criticised. There is no greater court than the court of public opinion.
The minister was asked how the government calculated the 400,000 tonnes. His answer was:
Vehicle numbers and rates of conversions were sourced from the Bureau of Transport Economics. Other key assumptions, such as fuel consumption rates and conversion costs, were sourced from the submission by the Australian Natural Gas Vehicles Council to the Senate inquiry into the new tax system. That is, the government relied on the submission by that council.
They were the basic sources. The relevant shadow minister asked the minister to provide detailed figures on how the 400,000-tonne saving of greenhouse gases was calculated. His response was:
I indicated the source of the data relied upon in relation to the calculation of 400,000 tonnes. I will undertake to get more detail in relation to that. I am not sure what there is available to me . . .
Before I entered parliament, I worked as a private consultant on issues such as greenhouse gas emissions. We had occasion to do some work for Brisbane City Council. We were asked what the savings in greenhouse gases would be of converting the Brisbane City Council bus fleet from diesel to compressed natural gas. We did all the calcula tions, and the savings were negligible. They were close to zero. The reason for that is the different fuel efficiencies of the vehicles. There are other reasons as well, but that is the main reason.
There are no major greenhouse gas savings to be made by converting buses from diesel to compressed natural gas, and yet the Democrats have bought the argument and the bodgie figures from the government that say we are going to make the great saving to the environment of 400,000 tonnes of greenhouse gases as a result of this conversion program which they insisted upon to offset the greenhouse gas increasing impacts of the legislation, the Diesel and Alternative Fuels Grants Scheme (Administration and Compliance) Bill 1999 , which is before us tonight. When the minister's response finally comes, we will be very interested in the basis of those calculations. I am quite confident that those calculations are wrong. There are no net greenhouse savings from converting buses in that manner.
The legislation before us tonight and the dodgy program that I just spoke about of converting buses from diesel to compressed natural gas had one purpose only for the government: to purchase the support of the Democrats for the GST. We did get a very grubby deal as a result of that. I have in front of me a booklet entitled The New Tax System—Here's what you need to know . Lurking out in the Australian electorate is a dark, sullen mood about the GST. There is fear and apprehension about the GST purchased through the deal with the Democrats. That fear and apprehension will become a reality when people start looking at this document. I will go through some of the claims.
Page 3, which is the major summary page, says that there is no GST on basic food, health or education. Yet foods taxed by the GST include sandwiches—are they not a basic food?—pies, pasties, sausage rolls, ice-cream, fish and chips, McDonald's, Hungry Jacks, Burger King, KFC, Red Rooster, frozen and takeaway pizzas. The list goes on. The Democrats want to be the nutritionists of Australia. For low income people, these are basic foods, and yet this document says that basic foods will not be subject to the GST.
The booklet goes on to say that health will not be subject to the GST. That will be news to people because, from 1 July, non-prescription pharmaceuticals will be subject to the GST. Contraceptives, for example, will be subject to the GST. It also says that education will not be subject to the GST. The Australian people are in for a shock from 1 July next year when they learn that school shoes, school uniforms, shirts and skirts, shorts and trousers, books—except for textbooks—and stationery will be subject to the GST. Are these not education expenses? Yet this document has reassured people that education will not be subject to the GST.
The booklet boasts that the GST will replace wholesale sales tax and other taxes such as financial institutions duty. The Australian people were promised before the last election that 10 taxes would be replaced. In fact, four will be replaced, and they include a small bed tax in New South Wales and the Northern Territory that certainly has no relevance to people in other states.
I will go through some of the taxes that will not be replaced by the GST. Again, the people of Australia will be rudely shocked from 1 July next year when they realise that the following taxes will not be replaced by the GST: income tax, alcohol excise, cigarette excise, petrol excise, diesel excise, stamp duty on cheques, stamp duty on hire purchase, stamp duty on insurance, stamp duty on buying a house, stamp duty on mortgages, payroll tax, bank account debits tax, customs duty, gambling taxes, other state fees and charges and local council rates, fees and charges. None of those will be replaced by the GST.
We are told in this glossy document that has gone to every household that there will be dedicated watchdog powers to ensure price reductions are passed on. That is going to be done through 40 additional staff for the ACCC—ineffectual at best. The document goes on to boast that typical families will gain $40 to $50 a week. I draw the attention of the House to analysis by Access Economics, a very reputable organisation. Here are some typical families that are supposed to get $40 to $50 a week. A two-income family with two children between five and 13 years of age on a combined income of $45,000 is not going to get $40 to $50 a week. At best, under optimistic assumptions, it will get $13.01 a week.
Here is another typical situation: a single income couple—is that not a typical family?—with no children on $30,000 will get $4 a week. They are being told by the government that they are going to get $40 to $50 a week. They will get $4. A single person—not a family, so a single person must not count—on $30,000 will get $5.51 a week, according to this analysis. A two-income family with no children on $45,000 is supposed to be a typical family getting $40 to $50 a week but will in fact get $3.76 a week at best. A single age pensioner obviously does not fall into the category of a typical family as far as the government is concerned, because a single age pensioner will get at best $3.33 a week.
We have false claim after false claim from the government, which thinks it is clever in misleading people by producing documents like this and sticking them in letterboxes. But people will not be misled by the reality that, from 1 July next year, the GST is going to be a big crunch on family incomes and on pensioners.
This document goes on to say that pensions and allowances will go up four per cent on 1 July next year. It fails to reveal that, a few months later, half of that four per cent will be clawed back. I think it would be reasonable for a pensioner to read that and say, `I'm going to get a four per cent increase.' The age pension will go up on 1 July next year when the GST comes in, and the increase will be four per cent—which works out at about $7.25 a week for single pensioners and around $6 a week for each member of a pensioner couple—but from March 2001, when the pension is automatically adjusted for inflation, half of the initial four per cent increase will be taken off. That is not revealed in the document that has been put in the letterbox of every Australian household. The real increase in the pension will therefore be two per cent, not four per cent as is glibly claimed by the government.
It goes on to say that this is going to be great for small business and that GST registration is optional for small businesses with a turnover under $50,000. People may say, `That is pretty good.' It does not, of course, confess the fact that anyone who does not register for GST purposes will not get any credit on the GST paid on the inputs that business uses. That is missing somewhere in the fine print of page 15 or 16. I still have not been able to find it. Wait until small businesses work that out.
Then the government says, `But we're going to give up to $500 million for GST start-up costs for small and medium businesses, charities and education.' For the 1.6 million taxpayers—businesses, charities and so on—that will be caught in the GST net, that works out at around $300 per organisation. So the government is saying, `Look, we may give you $300. We may use it on seminars and all sorts of other things. We may pay favoured friends and clients a lot of money to go around conducting seminars and information programs.' I do not think many businesses will see anything like $300, nor do I think $300 will be anywhere near enough to cover the enormous compliance and paperwork burden of this tax.
So there we have it. The Democrats did a deal on the legislation before the House tonight. They said, `Oh well, this is the deal that has convinced us to pass the GST.' The Democrats will live to rue the day that they did that deal. The government will live to rue the day that they did the deal with the Democrats because, from 1 July next year, that lurking sullenness that is out there in the community right now will become a very harsh, sharp reality for the government. The community will realise the extent of the government's betrayal by this sort of rhetoric and by this sort of cheap and misleading publicity, and the government stands condemned for producing it. (Time expired)
Debate (on motion by Mr Truss) adjourned.