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Wednesday, 11 May 1994
Page: 663


Senator SCHACHT (Minister for Small Business, Customs and Construction) (5.14 p.m.) —As indicated in the second reading speech, the government will not accept the amendment moved by Senator Teague. We will oppose it and will divide on it. We estimate that earlier this year about 100 applicants may have received the Austudy benefit because of the way the publicity was drafted. We also estimate that if this amendment were carried, up to 2,000 people may be eligible at a cost of about $10 million.

  I find it a bit strange that last night, and again this morning, senior economic spokespeople for the opposition were attacking the government because the deficit was not reduced in a more substantial way; that we should have opted for a deficit for the coming financial year of less than $10 billion. The coalition might think, `What is $10 million in an $11.7 billion deficit?' When one keeps adding up those figures right across the board, as finance ministers previously in this chamber and elsewhere have said endlessly—I suppose former Senator Walsh was one of them—it all adds up. If a government keeps making concessions, then its fiscal structure just gets blown out. It may sound tough, and the argument, `Well, what is $10 million?' may well have been used by ministers with finance ministers from time to time.

  The opposition cannot in the macro sense say, `We are hairier-chested than the government and want the deficit reduced in a more substantial way, more quickly,' and then say in this chamber on an individual bill, `Grant the concession; spend the money.' One cannot promise to increase expenditure, reduce taxes and balance the budget. From time to time oppositions in the history of Australian government have often fallen for that trick. In the end their credibility is shot to pieces because they have made such claims.


Senator Teague —What is a government announcement worth?


Senator SCHACHT —The government did not announce the decision in the way Senator Teague says it did. The material that went out to explain who was eligible contained an error. We conceded that in the discussions that took place in the estimates committee in March this year. We conceded there was a mistake in the information which made the information different from the government's decision announced in the budget. So it was not announced in the budget this way.


Senator Teague —What about the DEET budget release in September?


Senator SCHACHT —The information that went out after the budget was wrong. When we found out about it—


Senator Teague —You found out about it in February.


Senator SCHACHT —We found out about it in February and took action when people started to apply. Senator Teague may rightly criticise the administration. I will not back off from the fact that we have acknowledged a mistake was made that should not have happened. I will not debate with those opposite and tell them that black is white and white is black. If a mistake had not happened, we would not be here having this debate. Certainly we have some embarrassment about it.

  I see that Senator Boswell has come in to join the debate as I thought he would. In a department such as DEET, which has an expenditure of some $15 billion in programs and many officers serving it around Australia, to err is human and occasionally mistakes are made. We always try to put in systems to rectify mistakes to make sure they do not happen again. But those opposite know as well as I do that from time to time mistakes will be made. That is the nature of administration, whether it is in the private or public sector. We just hope that we minimise them and do not create undue damage or cause hurt to people.

  I want to put the situation straight. The budget decision was correct and we acknowledge that the material that went out was wrong. This expenditure of $10 million was not and never has been in the government's mind. Senator Teague spoke about the assets test and how it affects someone with large assets and small liquidity. The balance between assets and liquidity and assets and cash has been a debate generally in the parliament for years.


Senator Teague —Especially with Peter Walsh.


Senator SCHACHT —Yes, especially with Peter Walsh. As a devotee of Peter Walsh, I was convinced of a lot of his arguments and this, I believe, is one of them. As a kid who grew up on a farm I understand the sentiments and the situation of a farmer having a high asset and low liquidity and low cash position.


Senator Teague —It's not sentiment; it's justice.


Senator SCHACHT —I understand that argument very well.


Senator Boswell —They have to be penalised because you can't write the legislation?


Senator SCHACHT —But once a rule is written to allow the assets to be ignored, then a lot of other people, not in the farming area but elsewhere, will change their cash into assets. Senator Teague and Senator Boswell might say, `Let's write the legislation to exempt farmers.' That would create what in the old days in Victoria we used to call Collins Street farmers and in Adelaide King William Street farmers.


Senator Teague —But he's not saying that.


Senator SCHACHT —It might be said that $2,000 is very small beer in the great scheme of things. But Senator Teague knows as well as I do that, if we exempt assets, there will be arguments in this place about the determination of the assets test in every other area and the ability of people to access various benefits and so on. Senator Teague also knows as well as I do—and I am sure Senator Boswell would agree—that the smarties in the accountancy and legal professions will be out there drafting schemes for people who are not bona fide rural producers in order to find a way in which they can get a benefit through this or any other scheme.


Senator Teague —This is hypothetical; you have lost this one.


Senator SCHACHT —Senator Teague may say that we have lost it here in the Senate; we have not lost it in the House of Representatives yet, so I suspect the debate will go on. In correcting a mistake, which the government acknowledges, maybe up to 100 people will have an advantage that others will not get. If it is argued that the best way to fix that is to let everybody else in, one would start to go down the track of establishing a principle that attacks the assets test regime itself across many areas. I do not think this government—and in particular the Treasurer (Mr Willis) and the Minister for Finance (Mr Beazley)—wants to open up that argument. So we will oppose the amendment.

  I can count numbers in here as good as anybody, so I accept the fact that the amendment will be carried by this chamber and referred back to the House of Representatives. I imagine the House of Representatives will insist that the amendment not be proceeded with, but there will be further debate.


Senator Teague —No; you tell them, Chris, not to do that.


Senator SCHACHT —I am sure that we will have another round on this subject in estimates committee in a couple of weeks when I have to front up because in those hearings I represent the Minister for Schools, Vocational Education and Training (Mr Free).

  The government greatly regrets this unfortunate incident. However, we believe that if we give way and open this up now, it will establish an unhealthy precedent. It will provide loopholes that will be used by other groups to weaken the role of the assets test, which is a way of establishing a taxation regime in Australia based on reasonable equity between all people in the community. I urge the committee not to support this amendment.