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Tuesday, 30 May 2000
Page: 16592

Mr EMERSON (9:35 PM) —The member for Barker is a living example of the constitutional incapacity of the government to tell the truth. We have just heard from him a statement that, as result of the government's tax changes, 10 taxes will be abolished. That is completely untrue. The truth is that four taxes will be abolished. It is true that the government gave an election promise before the last election that it would abolish 10 taxes by introducing the GST. But, as I said, only four are going. The four that are going are: the wholesale sales tax, a bed tax that applies to some hotels in New South Wales and the Northern Territory, financial institutions duty and stamp duty on shares. I fail to see how the removal of a bed tax on some hotels in New South Wales and the Northern Territory would benefit the constituents of the member for Barker one iota.

This is just another example of government members and the government publicity campaign—now amounting to over $400 million—spreading completely untrue statements about the tax changes, the risky tax scheme that this government is putting in place in just one month's time. I can go on to point out the range of taxes that will stay. There is a perception, because of this publicity campaign and because of the statements by people such as the member for Barker, that a whole lot of taxes are going. These are just some of the taxes that are staying: income tax, payroll tax, alcohol excise, cigarette excise, petrol excise, diesel excise, stamp duty on buying a house, stamp duty on hire purchase, stamp duty on insurance, stamp duty on cheques, stamp duty on mortgages, bank account debits tax, customs duty, gambling taxes, other state fees and charges and local council rates, fees and charges.

So the very deal that the member for Barker referred to—that is, the Howard-Lees deal—in fact resulted in an outcome where only four taxes are going, not the 10 that the member for Barker has just asserted. He knows other details of the deal, because he lamented the fact that some food items are now going to be exempt from the GST, and he said, `If we did not have the exemption on a range of fresh food products, then we could do a lot more.' So we are already seeing demonstrated the agenda of the government—if Australia were to be so unlucky for this government to be re-elected—which is clearly to roll the GST forward. Government members are lamenting the deal that they did with the Democrats to exempt many food items from the GST. They are saying, `Wouldn't it be terrific if we could actually be re-elected and then we could roll the GST forward so that the GST would apply to all food items,' which in fact is precisely what the Treasurer, the member for Barker and the Prime Minister want. I refer to a statement made by the Treasurer not very long ago, on 24 January this year, on radio 3AW. He said:

Every time you go for an exemption you get into a complication. I argued this in relation to food. You can recall I was arguing all the way through the tax debate that you should have food included as a good.

This is obviously the sense of the party room discussion of the government—that they want the GST rolled forward on to food, which has always been their agenda and has always been what they wanted, and the member for Barker has yet again confirmed that in his speech tonight.

This bill proposes to maintain real per capita grants to local councils, but it proposes to maintain those real per capita grants from a base that was reduced by $15 million in 1997-98 and has never been replaced. From a lower base, the bill proposes to maintain payments—financial assistance grants—to local governments in real per capita terms. But local councils will now face a major new expense, and that is the implementation of the GST and the compliance costs for the GST. We may ask, `What allowance has been made by this government to cover the compliance costs that are being confronted by local councils right here and now?' because they have only a month before the GST is implemented and many councils are underprepared for that. The answer is that the government has allocated only $3.5 million to help local councils with their GST implementation costs. The Senate estimates process of 25 May revealed that the government has spent only $2½ million of this. So that amount of $2.5 million is equivalent to just $2,000 per council. This government is providing to local councils an average of $2,000 to cover the compliance and implementation costs of the GST. It is saying to the local councils, `Wow, have we got a really good deal for you.'

The reality is that medium sized councils face a bill of around $100,000 to upgrade their computers and to train their staff for the GST. I can give you some further estimates: the Municipal Association of Victoria estimates that individual councils face costs of around $1 million each to implement the GST, the Western Australia Municipal Association estimates that the total state bill to implement the GST will be $3.5 million and the Local Government Association of Queensland, in my home state, has estimated a total state bill of $7 million to implement the GST. Yet this government is offering the miserly sum of an average of $2,000 per council to implement the GST.

Astonishingly, the Minister for Regional Services, Territories and Local Government would have us believe that there is no impact on local councils, that there is no need to provide any sort of compensation for the compliance costs of the GST, because there will be no impact whatsoever. I refer to a statement made by the minister for local government in the Jimboomba Times on 10 March 1999. The minister, Senator Ian Macdonald, had met with Beaudesert Shire Council to promote the coalition's GST tax reform package. The Jimboomba Times article said:

Senator Macdonald said despite recent negative publicity the GST package would “not impact on Councils at all” and would not result in increased Council charges for ratepayers.

That is what the minister for local government wanted people to believe, that there would be no impact on local councils at all. He then went on to say something even more astonishing:

There are no down sides for Councils and there are some positives.

So there is the minister for local government saying, `We do not need to compensate local councils at all'—not even the miserly amount of $2,000—`because there are no downsides for councils at all and there will be no impact of the GST whatsoever.' I had an article published in the Jimboomba Times refuting that claim, because it was a ridiculous claim by the minister. Then the minister wrote back. In a letter to the editor in the Jimboomba Times on 24 April 1999, he said:

In the Jimboomba Times March 24, the Labor Member for Rankin “called upon me to provide accurate information about the GST's impact” on the Beaudesert Shire Council.

I certainly did, and in response to that he did make one very important admission in his letter:

Where Councils do provide a fee for service for commercial activities then this will, like every other commercial service attract a 10 percent GST.

Just a few weeks beforehand, he was saying there would be no impact on local councils at all and no downsides whatsoever, and then in response to my article published in the Jimboomba Times he at least, to some extent, came clean and said, `Of course there will be impacts on local councils.' The local councils of Australia have been under extreme pressure as a result of the GST because they were begging this government to produce a determination of exempt taxes, fees and charges, and that determination was finally produced in draft form on 31 January and gazetted on 1 March, just a couple of months ago. So local councils have had about four months to deal with the whole issue of which fees and charges are going to be included, and therefore subject to the GST, and which fees and charges are going to be GST exempt.

In my local area, the Local Government Association of Queensland had done a study for Logan City Council that said that up to 263 of its charges may be subject to the GST. They were living in an environment of great uncertainty until finally this determination came out, which runs to approximately 300 pages. The councils have had to sift through these fees and charges to work out which ones will have GST on them, because these are the exempt fees and charges. It has been a nightmare for local councils to prepare, and yet this government went to the last election saying that there would be no impact on local councils. We had it repeated by the local government minister quite recently, as I said. In fact, during the 1998 election campaign, the coalition promised local government that non-commercial activities of councils, for which a nominal charge is applied, would be GST free. That advice was given to local government by way of a letter written by the Federal Director of the Liberal Party, Mr Lynton Crosby, on behalf of the Prime Minister of Australia on 17 September 1998, where he said:

The non-commercial activities of government will be outside the scope of the GST. This means that where a service is provided free of charge or for a nominal charge, the GST will not apply.

Subsequently, at Senate estimates hearings on 19 February 1999, in response to questioning from Senator Sue Mackay, the local government minister said:

I am aware—and I guess you are coming on to this; perhaps I can pre-empt this long tortuous process—there is a letter from the Liberal Party campaign office prior to the election suggesting that nominal charges would be exempt. That is not correct. To all intents and purposes it is correct, because if the nominal charge is 10c the GST will be 1c. But it is on the charge that is made.

It became clear that the government would define all activities of local government for which a nominal fee or charge is levied as being commercial, even though these activities are community service obligations and they are heavily subsidised by rates and are not attractive to the private sector. When he became aware of all of this, the local government councillor, John Campbell, President of the Australian Local Government Association, said at the Senate Select Committee hearing in Brisbane in March 1999:

We responded and accepted this undertaking at face value and, therefore, communicated it to all our councils....It was taken as a letter of comfort that, indeed, those non-commercial services, in our terms—basically, the provision of services with nominal charges—would be GST free. We took it at face value ... If it was a mistake, it should have been drawn to our attention ... That raises the question: what is the basis of undertakings given by political parties before an election? Does that mean we should not accept a response from somebody who presents themselves as speaking on behalf of the Prime Minister or the Leader of the Opposition, whoever it is? It really adds to the concern about the credibility of any undertaking being given.

There we have it from the President of the Australian Local Government Association, completely disillusioned as a result of the Director of the Liberal Party misleading local councils into believing that these fees and charges would not attract the GST. It was only after the election, under pressure and under questioning from Senator Sue Mackay, that they had to concede that, yes, in fact, these fees and charges would attract the GST. That is the living nightmare for local councils.

I want to inform the House of the range of fees and charges that will, in fact, attract the GST. Just some of those council services that will attract the GST are cremation fees, fire maps, sale of bins, sundry rubbish removal, library membership, library fax machine charges, sports ground and reserve hire fees, catering fees, netball court hire, dog obedience classes, plant and machine hire fees, car parking charges, fire hazard inspection fees, sale of rainwater tanks, swimming pool admission fees, library photocopying charges, senior citizens centre hire fees, recreation centre fees, tennis court hire, basketball court hire, adult day centres, and fees for removing rubbish. We have the minister for local government saying that the GST will not affect councils at all and that there are no downsides for councils, and yet these are just some of the fees and charges that will attract the GST.

In my own electorate of Rankin, Logan City Council will have to apply a GST to the hire of places like the Kingston Butter Factory, the Logan West Community Centre, the Cornubia Leisure Centre and a whole range of other community facilities which are provided not for profit but to community groups who are trying to make ends meet and who are trying to provide volunteer services to strengthen the community. Yet they are now going to be slugged with the GST—a GST that this government promised before the last election would not apply. How can we believe anything this government says about the GST?

In its $410 million advertising and publicity campaign, there is a litany of misleading or completely untrue statements, and this government continue to perpetrate those statements. They are doing so, shamefully, at taxpayers' expense. They know what they are saying is untrue, but what they think they can achieve by this is for people to believe that the GST will not be so bad after all—because, if they believe the $410 million worth of government propaganda, perhaps they will believe that they are, in fact, not worse off. It is just one month until the GST comes in, and the people will make their judgment. People who use local council services will make their judgment upon this government as it told them before the last election and on several occasions after the last election that the hire of community halls, basic services and swimming pools would not attract the GST—when all along this government knew that it would indeed attract the GST.

There is an entire issue of trust at hand here. This government has lost all credibility and it has lost the trust of the people. It is trying to spend $410 million to restore the people's trust, yet is attempting to do so by misleading people with these false claims in its advertising and publicity campaigns. It will not work. We know that people are very well equipped and able to work out whether they are worse off under this GST. Thousands upon thousands of Australians will be worse off under the GST, and thousands of Australians who provide volunteer services to try to strengthen our community and who hire local council facilities in order to do that, will now be slugged by the GST. The Australian people and those volunteers, those good people in our local communities, will make their judgment on this government after 1 July.