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Tuesday, 16 April 1985
Page: 1038

Senator MAGUIRE —Has the Minister representing the Treasurer seen reports of an address last week by the Deputy Leader of the Opposition, Mr Howard, in which Mr Howard strongly supported the introduction of a quarterly based consumption tax with minimal and preferably no exemptions? Does the Government believe it is possible to have a consistent taxation system with, on the one hand, a broadly based consumption tax with minimal and preferably no exemptions and yet, on the other hand, one that could provide that specific items such as wine would not be taxed?

Senator WALSH —The main part of the question asked by Senator Maguire was: Does the Government believe it is possible to have a view that, if there is to be a consumption tax, there should preferably be no exemptions, but to exempt, for example, wine. Clearly, of course, the Government does not believe it is possible to do that because the Government has a rational approach to this matter, an approach which is sadly lacking, I regret to note, in the Opposition. I had seen the reports mentioned in Senator Maguire's first words of Mr Howard's speech in Perth last week. I welcome Mr Howard's implicit endorsement of a tax of some sort on wine, given that there are taxes, indeed very heavy taxes, on all other forms of alcoholic beverage. It is, of course, not the first time that Mr Howard has endorsed a tax on wine. At the National Press Club last year he was good enough also to say that, given the heavy taxation of competing alcoholic products, there was a very powerful case for a tax on wine.

Senator Button —What a pity Senator Messner does not get invited to the National Press Club.

Senator WALSH —The National Press Club has to draw the line somewhere. I also welcome to some extent the tone of the speech that Mr Howard made last week in which he said that those people who advocated cutting expenditure were obliged to specify the areas in which they would cut expenditure. Having said that, unfortunately he then neglected to nominate the areas in which he believed expenditure should be cut. Indeed, given the fact that he set up the preconditions in his last year as Treasurer for a $10 billion deficit in the next year, it is not surprising, I suppose, that he should have dodged the responsibility that he had imposed on others.

In response to the question of the broad-based consumption tax and consistency in the application of such a tax, it is perfectly clear, I would have thought, to any rational person that, if there is to be a broad-based consumption tax or even a reasonably broadly based sales tax, it is totally indefensible that a product like wine should be exempt from it. I trust that if the Liberal Party ever gets the opportunity to govern again it will follow Mr Howard's views on this matter and not follow opportunists like Mr Peacock or fools like Senator Messner who claim that--

The PRESIDENT —Order! I suggest that the Minister withdraw that remark.

Senator WALSH —I am sorry; persons so ill-advised as Senator Messner, who not only argue that there should be no tax on wine but then also assert completely spurious reasons for that unjustified exemption, such reasons as if a 10 per cent wholesale tax is applied on wine, sales will decrease by 14 per cent, an assertion which has been shown to be nonsensical in the most effective of all ways, that is, by actual experience and by empirical evidence. I suggest that what underlies this even more deeply on another level is that it reveals again the split between the Sydney faction of the Liberal Party, which is more or less the dry faction, and the Melbourne faction of the Liberal Party, which is the very wet faction. It is just one of many areas in which is there has been public disagreement and outright contradiction in recent times between the Deputy Leader of the Liberal Party and his leader and a number of other figures, both significant and insignificant, within that Party.