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Thursday, 19 February 2004
Page: 25279


Mr WINDSOR (12:58 PM) —I support the A New Tax System (Commonwealth-State Financial Arrangements) Amendment Bill 2003. I would like to make a few comments, particularly about the tourist refund scheme and the wine equalisation tax. I would also like to comment on the way in which the new tax system has been applied and some of the inequities that have occurred between country and city people in the application of the goods and services tax. In particular, I will refer to the Fuel Sales Grants Scheme that has recently been abolished by the government. It was put in place because of the inequity of the base fuel prices for country people when compared with prices for city people when the GST was introduced.

The government did address that inequity with the scheme, and I thought it was a good scheme. It did address the inequity. In some cases up to 2c to 3c difference in GST would have been paid because of the difference in the base price of petrol. To give an example: when the original new tax system legislation was introduced, some city motorists were paying around 60c to 70c a litre while some country motorists were paying around 90c to 100c a litre. It is obvious that if you apply 10 per cent to the base price you end up with a 1c to 3c difference in terms of the inequitable application of the GST at the time.

As I said, the government quite rightly put in place the Fuel Sales Grants Scheme to remove that inequity. I will quote from a few people who spoke at the time in this House about the Fuel Sales Grants Bill 2000. The Treasurer, talking about the benefits of the bill to rural and regional people, said:

As a consequence of this grant scheme, for consumers in regional and remote Australia fuel prices as a consequence of GST need not rise.

And that was what the bill was intended to do. That bill, as I said, was removed a couple of weeks ago and the new Roads to Recovery package and other moneys that are going to be applied to road funding were announced by the Deputy Prime Minister. That means that $270 million which used to be applied to the Fuel Sales Grants Scheme to make up for the inequity of fuel prices caused by the application of the GST has been taken away from country motorists. A certain degree of spin has been applied by the government, particularly by the Deputy Prime Minister, to try to make that look as though it has not happened and everything is rosy.

The fact is that $270 million has been removed from country motorists. It was a subsidy that was there to take care of the inequity of the application of the GST. Now it is being spun into some sort of new road-funding arrangement. There are a number of fellow travellers that have supported the increase that will occur at the bowser for country motorists—I think that is a disgraceful act. On 20 October 2003 John Anderson stated that the Fuel Sales Grants Scheme was:

... set up to ensure that the introduction of the GST did not result in unwelcome price increases in more remote communities ...

That was in reply to some comments that the member for Fraser had made about the possibility of the Labor Party removing the Fuel Sales Grants Scheme from the agenda. Then in a media release on 29 October 2003 John Anderson, in an attack on the Labor Party, asked:

Where is the vision in making fuel prices between one and three cents a litre more expensive for the people who often have to drive the longest distances to get to work, take their children to school or buy food?

That was in response to the Labor Party making some comments about the possibility of removing the Fuel Sales Grants Scheme—the Labor Party is not clean on this issue at all. But what a difference three months makes! Back in October 2003 the Fuel Sales Grants Scheme was being lauded by the Deputy Prime Minister as something that was there to cover the inequity in terms of the application of the GST; something that was there to help people who have to drive to town to get their food and who have to drive long distances to take their children to school. All of a sudden it has been removed, and there is going to be no impact on country people, apparently.

The amount of $270 million will be removed. We are hearing that the Roads to Recovery scheme is going to be reapplied, which is tremendous. I wrote to 450 mayors across Australia asking them to support the Roads to Recovery scheme. But if the government uses a similar formula to the one it used previously in the application of Roads to Recovery funding, we will have this movement of funds: $300 million a year is going to be applied to Roads to Recovery; if they use the 70-30 formula, there will be $210 million going to country roads. So we have $210 million that is going to be applied—theoretically, at least—to country roads, and country motorists have lost $270 million through the removal of the Fuel Sales Grants Scheme, which, as I said, was there to cover the inequity of the GST. Other members of parliament spoke in 2000 as well. I was quite interested to read the contribution that the member for Dawson made back in 2000. She said:

I would like to speak again about the bill—

the Fuel Sales Grants Bill—

because this is a very significant bill for those of us who represent rural and regional areas. It is not an opinion of just those in the government and of backbenchers like me; it is a policy that has won wide praise. The National Farmers Federation president, Mr Ian Donges ...

... ... ...

... went on to describe the government's Fuel Sales Grants Scheme as another significant boost for agriculture. He added:

In a welcome move, compliance costs for farmers will be reduced by provisions under the extended scheme.

Obviously the National Farmers Federation were very pleased. They had been involved in the lobbying process to get the scheme put in place, because they recognised at the time that because the base prices were different there was going to be a different impact when 10 per cent was added to the base prices of city and country fuel. The member for Dawson continued:

There are others with praise for the government's initiative. Queensland Farmers Federation president, Mr Richard Armstrong, has publicly thanked the Deputy Prime Minister and Minister for Transport and Regional Services, the Hon. John Anderson, and the Minister for Agriculture, Fisheries and Forestry, the Hon. Warren Truss, for their approach. He said:

Rural industry should be confident that the approaching GST arrangements will be good for this industry, good for exporters, and good for the economy.

Mr Armstrong was embracing the Fuel Sales Grants Scheme as part of the initiation of that package. The member for Dawson continued:

The NFF president, Mr Donges, made the very valid point on 11 April, when he said:

The effect of high fuel excise taxes has long been an impediment to rural businesses and rural communities, so the new grants scheme will be a significant commitment by the Government and will help reduce the unfair price differential between metropolitan and rural prices.

I will say that again:

... will help reduce the unfair price differential between metropolitan and rural prices.

The member for Dawson went on to say:

Hear, hear to that!

Then she went off into some diatribe about the Labor Party. Back in 2000, the member for Dawson was very supportive of that scheme, as was the Deputy Prime Minister, as was the Treasurer, as was the government. But times change, don't they? I made some critical comments in relation to the application and the removal of the scheme and the spin doctoring that was going on in relation to where the money was actually going. I received a letter from the Chief Executive Officer of the National Farmers Federation, which I found quite interesting. I will read a little of the letter into the Hansard:

Dear Mr Windsor

I am writing to you about the Government's recently announced transport funding package, including the renewal of the Roads to Recovery (R2R) program.

NFF is pleased that we have both welcomed the Government's commitment to renew the R2R program until 2008. I am sure that you are aware of the significant benefits that R2R has generated in rural and regional areas.

I fully concur with that line of thinking, being one of those who actively went out and campaigned and praised the government for its Roads to Recovery program. So I concur with what the National Farmers Federation is saying. However, Ms Cronin went on to say:

However, it appears that we differ on the benefits of redirecting the Fuel Sales Grants Scheme (FSGC) towards further transport infrastructure funding. Naturally—

and here is the rub—

NFF would have preferred the Government kept the Scheme and, in addition, spent extra funds on transport infrastructure. However, this was not realistically possible in the current situation with the many competing demands on the Budget.

I wrote back to Ms Cronin. I was very heartened by her great concern for the government's budgetary position when we are probably looking at a $7 billion surplus! I am making some inquiries as to what the National Farmers Federation actually did to persuade the government to keep the scheme. Ms Cronin quite clearly says that the National Farmers Federation would have preferred that the government kept the scheme. I think there are some questions that need to be answered in relation to that particular issue. I can table the letter if members would like to see the whole thing. It concluded by saying:

While we respect your right to disagree with this decision of the Government—

that is, the removal of the Fuel Sales Grants Scheme—

we would appreciate it if you refrained from criticising NFF for agreeing with this decision. As I have outlined above, it was not a decision taken lightly and it was done with the best interests of rural and regional areas at heart.

I find that quite a disgraceful letter. One part of the letter says that they would have preferred that the scheme be maintained, and they are congratulating the government—as I have done in regard to the Roads to Recovery program, which is a tremendous program—and then the letter says it is being done in the interests of rural and regional residents. I might read a little of my reply to Ms Cronin, because I think it brings home the way in which this issue has been treated:

Dear Ms Cronin

Thank you for a letter dated 28 January, 2004. It is most informative of the NFF's viewpoint on its own role in relation to offering support for the dismantling of the Fuel Sales Grants Scheme to assist the government's budgetary needs.

I find interesting that the NFF has decided to become the voice of all country people by endorsing the inequity created by the application of the GST to the higher base prices that exist for country motorists. Clearly the group that the NFF actually represents (of which I am one) already benefits from the excise rebate on fuel used on-farm and GST reimbursements on legitimate business expenses that may include some on road fuel costs.

I also note from your correspondence that the NFF apparently has great concern for the government's budgetary position: `NFF would have preferred that the Government kept the scheme (FSGS) and, in addition, spent extra funds on transport infrastructure. However, this was not realistically possible in the current situation with many competing demands on the Budget.'

There is great concern for the government's budgetary position! As I said, the government has something like a $7 billion surplus. My reply went on:

This is an interesting position for NFF, the peak farming organisation, to adopt, on the one hand sympathising with the Government's budgetary plight and on the other supporting the removal of a programme that should benefit all regional motorists, a far broader group than the NFF's actual membership. Your membership may be aware that the Government's current estimate is that it will run a surplus of $7 billion and choose to question your support for the `current situation with many competing demands'.

Aside from the question of whether the NFF is in a position to represent country motorists other than farmers, the question must be asked if the NFF believed, as your letter stated, that they would have preferred that the FSGS be kept. What did the NFF actually do to retain the scheme?

My letter to Ms Cronin, the Chief Executive Officer of the National Farmers Federation, continued:

I have always been a great supporter of the NFF having been a General Councillor with the NSW Farmers and a member of the Grains Council prior to entering politics but I believe the NFF runs the risk of being marginalised in the political debate if it continues to be seen by most parliamentarians (Government and Opposition) as a mouthpiece for the Liberal Party. It should be of concern to the NFF Executive that the interests of the Australian farmers should be the focus rather than endorsing Government decisions—

some of which had very little relevance to the people they represent. My letter went on:

I would draw the NFF's attention to statements made on 11 April 2000 by the then NFF President, Ian Donges—

a good friend of mine—

regarding the FSGS ...

Ian Donges and I joined the NSW Farmers Association in the same year. In my letter to Ms Cronin, I quote Ian Donges, who said:

The effect of high fuel excise taxes has long been an impediment to rural businesses and rural communities, so the new grants scheme will be a significant commitment by the Government and will help reduce the unfair price differential between metropolitan and rural prices.

I further said to Ms Cronin:

Finally, Ms Cronin, I will not be threatened by political operatives of your kind. You may believe it is appropriate for your organisation to compliment the Government on the removal of a scheme that will cause an increase in the fuel prices for country motorists, the bulk of whom you do not represent, but I will continue to place the concerns of my constituents in the public arena, and if that means criticising the NFF for allowing the organisation to be used to `sell' a decision, the negative impact of which largely falls outside the NFF's constituency, I will do so.

The issue of the NFF requesting that I refrain from criticising your organisation for comments made outside your constituency should be a matter discussed by your Executive. As such, I have forwarded your letter and this response to the NFF executive.

I do not make those comments lightly.

In 2000 we saw the member for Dawson, who was in favour of the scheme, stand up for country people, recognising that country motorists paid more at the bowser for fuel, recognising that 10 per cent of a high base price is greater than 10 per cent of a low base price and going in to fight for those people. I recognise that and admire what she did in 2000. She is now walking away. It is a very similar stance to the one she took in relation to Telstra. She surveyed her own electorate, because she did not believe other people when they were putting surveys before the parliament. She found that 81 per cent of her own constituents were opposed to the sale of Telstra. Enormous change has taken place. The Deputy Prime Minister and the Treasurer stood up for country people in 2000 and walked away in 2004. I find the consequences of the spin doctoring that is going on about the manipulation of this money concerning. It does have to do with this bill. It is about the new tax system; it is about the application of the GST and the spending arrangements between the states and the Commonwealth. I find that to be of great concern.

We do not have a problem—and the current government and the opposition do not either—recognising, as this parliament did, the home owners who were going to be impacted by the effect of the GST on the building industry. I think there has been something like $1.7 billion spent in relation to the application of that scheme to people. We do not have a problem doing that. We are proposing to remove a similar scheme that would ease the negative impacts at the bowser on country people as a result of the application of the GST. I urge the government to consider that. If it was a badly targeted scheme that was not working correctly, they should revisit that and not spin doctor it as being new funding for roads. It is something that should not be approached in that way. (Time expired)