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Thursday, 1 June 2000
Page: 16913


Ms HALL (10:38 AM) —I join with the previous speaker in saying that I am not opposing the Local Government (Financial Assistance) Amendment Bill 2000, but we would not be discussing this legislation if the government had not sought to impose a draconian GST on the people of Australia. Every day we see a new way for the GST to create havoc and hardship in the Australian community. In this legislation, the government is turning its GST sword on local government and extending its tentacles out and forcing ordinary Australians to pay the GST on swimming pool entry; on library services; on the use of the playing fields in their areas, playing fields that have been supplied by their rates; and on most of the services that are being provided by local government. As the GST octopus pushes forward, Australians are seeing the extent of this horrible tax. They are seeing the impact that it will have on their daily lives and on basic services, basic services like the ones provided by their local council, services that have been taken for granted in the past and services they thought they paid for with their rates.

But this government has a different idea. The Prime Minister and his band of merry men and women believe that Australians should pay their council rates and then, on top of their council rates, pay a GST to use those facilities and services that their rates and taxes have provided. John Howard and Peter Costello promised there would be no tax on a tax. Well, I do not know what you call that, but I certainly see that as a tax on a tax. This Robin Hood tax is taking most from those people who can least afford to pay it. It is a very sad picture for Australia. It is the same with councils, because it is those small councils, those councils that are struggling, those councils that are finding it hardest, which are the ones that are going to be hit hardest by this GST.

The implementation costs of this GST for local government are absolutely enormous, as are the administration costs. The Lake Macquarie council, which is the one of the councils that falls within the Shortland electorate, has been forced to hire a GST officer. That is coming out of the rates of the people of Lake Macquarie. That GST officer is going to be paid $43,000. So $43,000 is going to be paid to a GST officer to administer the GST in Lake Macquarie. That GST officer is going to need clerical support. A rough estimate is that it will cost that council about $100,000 in administrative costs. One council in this country will be looking at that sort of cost. If you multiply that throughout the whole of Australia, you can see the enormous impact that the GST is going to have on local government.

And what will it do? It will lead to a reduction in services, an increase in rates or both. Councils have got budgets to manage and they have limited finances. Councils really find it hard to manage. As somebody who has been a local government councillor, I know how difficult it is to balance that budget, how difficult it is to meet all those competing demands out there in the community and cover them all within the budget. Local government is the arm of government that is closest to the people and the services it provides are the basic services—the things that people see every day. Once the GST has been imposed, local government will not be able to meet these needs in the same way that they can now.

As we all know, it is an old-fashioned tax. It has been imposed on the Australian people by a very old-fashioned Prime Minister who sits there in his chesterfield chair looking back to the 1950s. All we have got to do is look at what happened in Canada. I hope that those on the government side are doing that. After the election that followed the introduction of the GST in Canada, I think there were four members of the government left. I cannot speak for the rest of Australia, but I can certainly speak for the electorate of Shortland. I have been meeting very regularly with people in that area. Be warned: they are angry. They are so angry with this government. They cannot understand why their lives are being turned upside down, why they are being forced to pay this GST on the very basics of life—on all those goods and services that they need to survive.

Another issue that will have an enormous impact in my area is that the Lake Macquarie council is the largest employer. This GST will impact on employment. This will really affect local government's ability to maintain employment at the current level. The implications of the GST for local government are absolutely enormous. The government should be very wary of its impact. As I said, local government is the biggest employer in my area and it is the biggest service provider in Australia, with $10 billion being provided by local government Australia-wide in a broad range of infrastructure, economic and community services.

In Lake Macquarie quite a diverse range of services is provided. The council has a business unit called Civil Lake and had to consider whether that would have a separate ABN, but the decision was made that it would go under the council's ABN. Otherwise the council and Civil Lake would be each be charging the other GST. That gives an idea of how ludicrous, how shackling, how bonding this GST will be. There is a business enterprise centre and, as well as doing the usual council `roads, rates and rubbish' activities, the council is the major provider of sporting facilities, libraries, art galleries and senior citizen halls. It also has some caravan parks in Lake Macquarie, but I will touch on that a little bit later.

Councils will have to include a 10 per cent GST in the prices of most of their services. The dilemma for councils is: do they increase the price of fees and services, placing them outside the reach of the people who pay for them? That is what will happen if they increase the prices of fees and services with the GST: it will really be very hard for a lot of people to pay. Or do they absorb the costs and increase the rates? Once again that would create enormous hardship for local governments.

I have here some of the Lake Macquarie council services that this GST will impact on. Currently, the council does not have to charge groups for swimming club room hire but, because of the GST and because everything has to fit nicely with the accounting standards of this government, the council is going to have to put a $7 charge on the hire of its club rooms in swimming clubs to non-profit groups. Instead of costing those groups nothing, it will now cost them $7.70. Council pools do not charge commercial rates; they provide a community service, not a commercial activity. But voucher books to allow swimming in the pool, for 10 adult visits, will go from $17 to $22.55. There is currently no charge for swimming squad coaching, but to fit in with the criteria for GST there is going to be a $45 charge levied which will then attract the GST.

Faxes sent by the library system go up, as do photocopies. Faxing service is provided for lots of little groups—the pensioners, the swimming club, the athletics groups—and so are photocopies. But they go up. Local history photos which now cost $8 will go up to $8.80. In the art gallery, hire of the open area goes from nothing to $88. That is $80 in the charge to fit in with the accounting requirements and then another $8 GST. Hire of the piano goes up in price; there is a GST on that. All the little groups that go along to Warners Bay and have their concerts, the pensioners' Sunday afternoon concerts, will now be paying a GST on the hire of halls and of services. Local pensioner groups will now have to pay $8 hire for their pensioner halls and on top of that there will be an 80c GST. Previously, the city parks were controlled by management committees. Those committees will have to meet the requirements of the GST, and GST will be charged on the use of those parks by every person, young or old, that engages in sport throughout the country.

In Lake Macquarie we have some council caravan parks. I certainly hope that Lake Macquarie City Council does absorb that five per cent GST that can be charged on permanent residents in those parks. About 80 people live in caravan parks throughout Lake Macquarie as permanent residents. But once again the council is placed in a dilemma by this government—the dilemma of having a `choice' of whether or not to slug permanent residents and put them in a position that no other resident in Lake Macquarie is in, a position where they have to pay a GST on the home that they live in.

The list goes on and on, and the bottom line is that the residents of Lake Macquarie and every other council throughout Australia will have to pay these GST charges on facilities, facilities that their rates and their taxes have paid for, and continue to pay for. It is interesting to note that this is in direct contrast to a promise—and we know about the promises made by this government—made by John Howard before the election, a promise that non-commercial activities of local government would be tax free. We have all seen how tax free these charges are. We can see that these are not commercial enterprises. Hiring a hall to pensioners? That is not like hiring out a function centre for a wedding. This is about creating an environment where pensioners can interact on a social basis.

I really think that the government has made a very big mistake here. The fact that it and the Prime Minister are locked into the 1950s is so obvious. It as if the whole of Australia is being pushed into a situation where they have to fit in with the Prime Minister's picture of what Australia should be like, and the rest of the government are going along with it.

Another disturbing aspect of the GST as it applies to local government is the fact that local government will be paying GST itself where previously it was sales tax exempt. This represents a huge cost to local governments. Yes, they will be eligible for input tax credits, but 90 per cent of all council activities will be GST free. This will create enormous cash flow problems for councils and it will put pressure on them to increase rates and charges. Of course, who will be hit the most? The smaller councils. All I can say is that it is going to have an enormous impact on basic services. It is going to affect every area of local government.

The true cost to local government will not be known for some time. As one council after another struggles and starts to go under, the people of those areas will blame this government. When the potholes are not fixed, who will they blame? They will blame John Howard because people like myself will be out there telling them why they have those potholes, why they have no kerbing and guttering, why they have to pay so much money to use the sporting facilities, and why they cannot take their children to the local swimming pool.

While this government under John Howard's leadership continues to attack ordinary Australians, taxing them in a new way every day, it is spending in excess of $420 million selling its regressive 1950s tax to the Australian people. This government's extravagant `Unchain my heart' campaign is the worst example I have ever seen, or could ever imagine, of a misuse of taxpayers' money, particularly when you consider that 51 per cent of Australians voted against the GST. This government says, `You voted against the GST but we are still going to use your money to advertise it.' They are involved in a blatant political campaign where they are saying, `Unchain my heart, release me, but I am not going to tell you anything about how I am going to do it.'

Not only is it immoral and a blatant misuse of taxpayers' money; it is actually misleading. This regressive 1950s tax of our divisive, backward looking Prime Minister is certainly not unchaining the hearts of local governments or local councils; rather, it is shackling them and restricting them in ways that are unimaginable. This means it is making it harder for local councils to manage, and even harder for them to provide the basic services that they are there to provide. Rather than unchaining the hearts of councils, it will be tying them into taxation knots.