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Thursday, 25 March 1999
Page: 3297


Senator O'BRIEN (3:20 PM) —I heard that they had missed out presenting one of the awards at the academy awards process earlier this week. It was for best imitation of a B grade Hollywood movie, and it was to go Senator Kemp. We all asked what the movie was and were told that it was for the movie Clueless . After his performance today, I can believe that. There is no reason to suspect that he had any idea of the sort of answer he was giving to the question I asked, which was essentially about the administration of a law of the parliament—a law which the Treasurer and the Assistant Treasurer are responsible for administering.

What Senator Sherry referred to from the question that I asked was in fact a statement by the principal minister, the Treasurer, on radio, encouraging young people, effectively, to ignore the tax laws. We then had the spectacle today of Senator Kemp obviously not understanding the gravity of the actions of the Treasurer when he effectively tried to ignore the question, and particularly the supplementary question, that I asked.

Frankly, if this government were serious about dealing with the black economy, the Treasurer and the Assistant Treasurer would take seriously the words of a young person who was saying that he had to take a cash-in-hand job arising out of other policies of this government. But, no, there was no seriousness. There was no response from the Treasurer on the radio on the one hand which would indicate there is any seriousness about the issue, and there is no way that you could interpret Senator Kemp's non-answer as the answer of a minister who takes seriously the question of dealing with the black economy.

Frankly, what you would have to say about this government, and the Prime Minister in particular, is that over the years there has been no consistent pursuit of an enforcement of the tax system. This Prime Minister, in fact, was responsible in his previous period as Treasurer under the Fraser government for leaving massive tax avoidance schemes in place for years—hundreds of millions of dollars of tax revenue was being lost—and now we have seen him dragged kicking and screaming into the tax reform process. But what does he say is the solution? A GST.

We heard Senator Ferguson today say that the GST is somehow the solution to the black economy. He talked about the countries, particularly in Europe, that have a goods and services type tax and how that was somehow going to be the solution to the black economy. Professor Friedrich Schneider, a professor at Austria's Linz University, is reported in the May 1997 edition of The Economist as saying that he:

. . . calculates that the shadow economy may—

and he is talking about 1997—

account for more than one-fifth of GDP in Belgium, Italy and Spain.

Certainly Belgium and Italy have a goods and services tax, but think about what he says about Germany. He says:

Even in famously law-abiding Germany, perhaps one D-mark in seven goes unreported to the authorities.

That is, it is in the black economy. He also says Italy's shadow economy is around 25 per cent of GDP.

So much for goods and services type taxes being the panacea for dealing with the black economy.

Frankly, this is a joke. Today we saw Senator Kemp completely disregard comments from organisations like the Housing Industry Association of Australia—who I think have some reputation in relation to their public policy statements—who are saying that the GST will in fact increase the black economy in the home construction industry. I suggest that the Australian public—judging on the performance of this minister today—are much more likely to believe reputable organisations such as the Housing Industry Association of Australia on the question of what this GST is going to do to the black economy than they are this minister, Senator Kemp, or certainly the Treasurer, Mr Costello, who show a total disregard for the application of the laws of this parliament.