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Monday, 20 June 1994
Page: 1709

Senator CAMPBELL (3.14 p.m.) —I want to respond quickly to what Senator Coulter has said. It is all very well to feel good and green by proposing these sorts of taxation measures, as Senator Coulter has done. The Australian Democrats continue to propose solutions to environmental problems that involve increasing taxes which particularly hurt low and middle income Australians.

  I will indicate why Senator Coulter proposes to do this. He wants to increase the taxes on the running of motor vehicles. I heard Senator Coulter say that he wanted to cut out car registration fees and add that cost on to the cost of running a car.

Senator Coulter —It is revenue neutral.

Senator CAMPBELL —It is possibly revenue neutral to the people who pay it.

Senator Kemp —Except for the rural people.

Senator CAMPBELL —Except for rural people who have to travel further. People in Western Australia have to travel further. One thing that needs to be understood by the Senate and Senator Coulter—he might want to review his policy in the light of what I am about to say, although what I am about to explain may not bother him—is that one of the great problems Australia has in becoming an economically efficient nation is the massive inequities in the federal-state financial relationship. We have witnessed a massive centralisation of taxing powers in the hands of the Commonwealth. The greatest centralisation of power has taken place in the last 11 years.

  We cannot run an economically efficient nation unless we have sensible federal-state financial relations. One of the greatest backwards steps in federal-state financial relations was when the Prime Minister, Mr Keating, tried to stab the then Prime Minister in the back. He got up at the National Press Club and basically derailed what was the best hope of any reform of federal-state financial relations. One of the best contributions to Australian national affairs was the federal-state financial reforms proposed by Mr Hawke and Mr Greiner in 1990.

  Senator Coulter is saying that he would ensure that the states lost access to another source of revenue, state registration fees, by handing them over as another federal tax. We already have the worst vertical fiscal imbalance in the free world. There are only a few federations in the world that are worth talking about and they are the United States, Germany, Australia and Canada. Of those four federations, we have by far the worst vertical fiscal imbalance.

  One of the prerequisites for having a good environment—I agree with Senator Coulter on this principle—and an efficient economy is to ensure that the environmental costs are obvious and are paid by the people who impose the costs. I do not think the way Senator Coulter proposes to impose these taxes is particularly fair. This system has massive inequities for people who live in remote areas and have to travel long distances.

  I take this opportunity to ask Senator Coulter, when he is looking at solutions to environmental problems, to consider some of the other problems that would be raised. The issue of vertical fiscal imbalance is crucial. I put it to Senator Coulter and the Senate that, unless we have a sensible balance of taxing and spending powers within the Australian federation, we will have an inefficient economy like we have at the moment. If we have an inefficient economy, we will not have efficient solutions to environmental problems which are crucial to future generations of Australians.