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Tuesday, 20 April 1999
Page: 3873


Senator CROSSIN (3:52 PM) —I rise this afternoon—as these 27 bills come towards us—to talk about the impact of the GST in two areas: the Northern Territory and education. This was the GST that we were never ever going to have. I hope to prove to you after 10 minutes that, in relation to the Northern Territory—and in some aspects of the Territory, we are the never-never land—this is a tax that is not going to benefit the Territory or one Territorian.

We went to the 1998 election on a platform of opposing a GST. It is my intention this evening, on behalf of the Labor Party and the people I represent in the Northern Territory, to stick to that commitment that I gave to Territorians during the last election. It is evident by their vote that Territorians resoundingly rejected the proposals of this government. Nick Dondas is no longer the member for the House of Representatives, Warren Snowdon has been returned and I retained the Senate seat with an increased majority. So we now have only Senator Grant Tambling representing this government. So there is evidence by the way in which Territorians voted at the polls. I heard Senator Crowley mention this morning that, in their evidence, Tasmanians reminded the committee that they rejected this government's proposal and the GST, and that is exactly what Territorians did. Everything we have seen through the Senate inquiry process confirms this.

We may need tax reform in this country, but we do not need a 1960s European tax on jobs and the essentials of life. There is no doubt that the GST is an inequitable tax. Those on more than $75,000 a year would get a tax cut of nearly $69 a week or 7.3 per cent whereas for a single person on $20,000 a year the benefit would be only $4.28 or 1.3 per cent. For Territorians, the GST would increase the already high cost of living and lead to a lower quality of life. The compensation package does not take into account the higher costs of living experienced by households in rural and regional Australia.

A GST would erode the quality of lifestyle that Territorians now have. The biggest problem faced by people in the Territory is the distance. In some cases, this also includes isolation from major capital cities and from their families. They are isolated from the services that major capital cities offer and from the goods that major capital cities sell but, more particularly, non-Aboriginal people are, by and large, isolated from their extended families. They are isolated from essential services that Australians in other capital cities and on the eastern seaboard in particular take for granted.

Much of the evidence that has been presented shows that a GST would further exacerbate the disparity between rural and metropolitan living standards. The impact on prices in rural and remote Australia will be greater than in metropolitan areas. Costs are higher not only because of additional transport costs but also because these costs and margins are spread over smaller volumes and so add more to individual unit prices.

Even though diesel fuel prices may fall as a result of the tax reform proposal, the National Rural Health Alliance—amongst others—has argued that it is unlikely that this will fully offset prices and the increases in goods for rural and remote areas. Not all transport is by road. I heard Senator O'Chee this morning talking about getting goods to places around the country in trucks and by road. In the Northern Territory that is not always the case. In the Northern Territory goods are supplied to remote communities by aircraft and on barges by sea. There are doubts whether any savings in the diesel fuel will be passed on to consumers, especially in remote areas, where there is little competition between transport companies.

Let us have a look at food in the Northern Territory. Our urban shopping centres already pay 40 per cent more for foodstuffs and groceries than other Australians, and in remote communities this can be as high as 60 per cent more. The high cost of food in the Territory is due to the distance but also to the lack of competition, and this is one area of the GST that is not taken into consideration when we speak about remote Australia. Because the GST is on the retail price of the items, Territorians will be slugged twice: once by paying the higher prices for the item and then by having to pay a 10 per cent GST on that higher price. Currently a range of foods, such as fresh foods, are not subject to the wholesales sales tax. Therefore, fresh foods will be more expensive than they currently are. The Australian Consumers Association has estimated that the increase in food prices will be 8.8 per cent.

A survey conducted by the Northern Territory government's health department showed that the price of a basket of vegetables in East Arnhem in the Northern Territory is more than double what you would pay in a southern capital city. If you took a basket of vegetables worth $100 in any capital city, you would be paying $212 for that very same basket of goods in East Arnhem. These are not figures that I have made up; these figures are from a survey conducted by the Northern Territory government's department of health when they did a survey of a basket of goods. Under a GST that $212 basket of vegetables would increase in price. So someone in East Arnhem will pay a goods and services tax on that basket of vegetables and in a southern city they will only pay a minimum increase. A GST on food would also impact on people in rural and remote areas who have limited access to a range of nutritional foods due to a great cost, poorer quality and reduced availability.

ATSIC has shown how indigenous households in rural and remote communities in the Northern Territory—and Senator Bolkus spoke about this this morning—already spend between 40 per cent and 54 per cent of their income on food compared to 13 per cent for high income earners. A GST will further increase the pressure on indigenous households. In fact, in their media release of 7 February, ATSIC said:

A Goods and Services Tax (GST) is inequitable because of its disproportionate burden on the residents of rural and remote communities, particularly Aboriginal and Torres Strait Islander people—the poorest and most disadvantaged sector of the Australian community.

When we go on to look at the impact of that on Aboriginal Territorians, we find that, perhaps with the wholesale sales tax taken off, things such as soft drinks or biscuits and sweets will become cheaper, but fresh foods such as fruit and vegetables will become more expensive. I ask government senators: how can you sit opposite me and tell me that people in the Northern Territory are not going to be disadvantaged, that they are not going to be worse off, when fresh food in remote communities will increase in price? The compensation you are offering them is only four per cent, because by and large the majority of people who live in those remote communities are reliant on CDEP or social security benefits.

We know that the health of Aboriginal people is not something that we should be proud of. We know that it deteriorates day by day. How can you possibly tell me that, by making fresh foods dearer and junk foods cheaper, with a minimal compensation package offering only a four per cent increase in social security benefits, these people are not going to be worse off? There is no evidence to suggest that the kinds of people that I am talking about in this country will benefit from this package at all.

Let us have a look at the non-indigenous population of the Northern Territory. Already I have said that people in cities such as Darwin and Alice Springs pay 40 per cent more for a basket of goods. There are services that people in the Territory rely on. Air fares is one of them. The price of domestic air fares will increase. People who live in Darwin, Alice Springs and Jabiru and non-Aboriginal people who live in remote communities rely on getting out of the Territory to see extended families. Grandma and aunts and uncles are not 10 minutes down the road; they are six hours flying time away at a cost of nearly $1,200 return for an adult. So you are asking a family of two adults and a couple of kids who decide to relocate to Darwin to work to dip into their pocket to further pay for that service, to pay for that willingness to actually go to remote and rural places of this country. What might have been a holiday down south for the family every two years now becomes a holiday every three years.

In their submission the Consumers Telecommunications Network predicted that low income families would be greatly disadvantaged by the impact of the GST, but more particularly they said that people living in remote communities rely on phone services to keep in contact with the rest of the world—with their families, with people down south. It is very hard to just pick up the phone and have a conversation with mum or grandma, because if you are in the Northern Territory, by and large, you are paying an STD rate for that. The Consumers Telecommunications Network says that they:

. . . do not accept that the ACCC will be able to ensure the full value of cost savings are passed on to residential consumers. The difficulties that the ACCC has had in identifying the cost of Telstra's network through the process of declaring open access to local areas highlights the complexities that would be involved in such a task.

There are also a range of other issues that will affect the Territory. We have had plenty of evidence presented to the Senate inquiry on the GST to confirm that the introduction of the GST would have a negative impact on employment in regional areas, particularly hospitality and tourism and building and construction. These are two of the main industries in the Territory that are probably on the crest of a wave, that we rely on greatly.

The Tourism Council of Australia told the committee that I was on that if people flying to Cairns and the Gold Coast and Sydney do not go to Alice Springs, if parts of the Territory are not included in that loop, then we will be severely disadvantaged. Jobs will go in the tourism industry in the Northern Territory. Much of the economic modelling assumed that job losses in some areas will be rectified by jobs created in other industries. Well, we are not talking about major capital cities here that have a sustainable base of millions of people; we are talking about 25,000 people in Alice Springs, and at best 80,000 to 90,000 people in Darwin. It is unlikely that job losses in the tourism industry or construction industry in the Northern Territory will result in people finding jobs in other industries. They will be forced to relocate south or forced to go on the dole and unemployment benefits.

In the time that I have left I want to talk about the effects on education, just moving away for a minute from the effects on the Territory, which I could spend much time talking about, having just scratched the surface here. What we have seen in relation to education is that the GST is in fact a tax on learning. The claim that education will be GST free has been shown during the Senate inquiry process to be baseless. This is another attack by this government on the right of ordinary Australians to receive a decent education. The education community has been under siege since 1996 in the context of several years of serious decline in government funding.

There are many problems with this bill in the area of education. I seriously urge the government not to go down this path blindfolded, pretending that there is no need for any amendments with respect to education. There are serious flaws in the bill. There is a narrow interpretation of curriculum related activities. The bill talks about educational related activities being GST free if they are linked to the curriculum, but not if they are predominantly recreational. Who is going to determine that? The bill does not say. Is it the Taxation Office? Is it the principal?

We had a debate in the committee I was on about whether excursions from, for example, the Northern Territory to the snowfields were education related or purely recreational. As an early childhood teacher, if I take my kids to the movies at the end of the year to see a film about Santa Claus, is it education related or recreation related? If I am taking a group of 30 little kids to a cinema and expecting them to sit quietly and interact with each other in a civilised way—something they would not do with mum and dad because they would be going just with the family—I would argue very strongly that that is education related. But the tax office may say that it is not.

Then again, a GST will be payable on food in relation to excursions that have a food component, such as camping excursions, outdoor education or sporting events. What a minefield for the administrators in schools who will have to collect GST for some parts of the excursion but not for other parts of the excursion.

We had discussions about what constituted an accredited course. Adult Learning Australia and adult education experts came before us and talked about what we commonly call stream 1000 courses. Stream 1000 courses are called that because of the way in which they are funded. I guess members of the government might call them hobby courses. Yet these courses, as compared to others, will have a GST component in them. I say to the government: rethink that, rethink the logic of that.

We heard from an occupational therapist who is doing basket weaving, not because it was a hobby for her but because she translated that skill to her work where she interacts with patients in a hospital. We heard about chefs who did special Thai cooking courses because that is what consumers are demanding in this country now, not because they think it is a hobby. We did hear about people—we did hear about women and young kids who have left school—who re-enter the educational loop via these hobby courses. At least they have jumped back into the learning process. At least they jump back into the lifelong learning system. If that is their only attempt to have another go at obtaining some kind of qualification, some kind of credibility, some kind of worth out of learning another skill or learning a hobby, why tax it?

Turning to upgrading skills, there is an inexplicable distinction in the bill between courses to obtain qualifications which are GST free and courses to maintain qualifications which are not GST free. Yet we talk about lifelong learning. We talk about wanting to maintain skills of people in this country, of encouraging people to get not only a diploma but also a degree or maybe their masters. We encourage child-care workers to get a certificate and maybe a bachelor of education. But they are going to have severe barriers put in front of them. There seriously are problems with this bill when you look at the education components.

Teacher development is another area. State and territory governments have washed their hands of teacher development. We had that argument years ago. The Professional Teachers Association have picked up the challenge and now offer teachers in-service courses. Teachers pay for those courses themselves and are happy to do so. They are happy to attend those courses on weekends and in the holiday periods. We heard an argument that you can claim them on your tax. They will still be able to do that, but they do not want to pay an extra $8 or $10 for every course they go to. We heard, for example, that primary school teachers are not in just one professional association but are in many—maths, or social education or the Early Childhood Association or a sporting association. So some teachers are going to be involved in multiple associations.

There are problems faced by universities. The Department of Education, Training and Youth Affairs, in response to questions, said:

Treasury has not undertaken specific modelling of the impact of the ANTS bill on Australian universities.

What does that say about Treasury? What does that say about their view of the university sector and the higher education sector? There will be problems faced by universities. There will be problems faced by students, particularly those who do not qualify for the youth allowance.

Charges at boarding schools will be GST free. But I have heard from the Isolated Parents Association and people on pastoral and rural properties in the Northern Territory who have said to me, `I want to send my kid to the Northern Territory University or a university down south. I don't want them to board in commercial accommodation; I want them to live in the accommodation that the university provides, but they have to pay GST on that. If they were between the ages of five and 18 and I wanted to send them to a boarding school, then that boarding component is free.' There are people out there who do not understand why a line has been drawn in the sand when it comes to boarding—boarding schools are GST free but you have to pay GST when you board at a university.

The last thing I want to say is about GST on books. I do not understand that. There will be many parents in this country who do not understand that. As we go through the checkout at supermarkets we encourage our kids to buy a Little Golden Book and not a bar of chocolate. (Time expired)

Motion (by Senator Vanstone) proposed:

That the debate be now adjourned.


The PRESIDENT —I put the question that that motion be agreed to. Those of that opinion say aye, to the contrary no—


Senator Faulkner —No. What are we adjourning for?


The PRESIDENT —It was my understanding there was an agreement to adjourn briefly so that I could make a statement. It was an agreement between the managers of business, I was informed.


Senator Faulkner —I am not aware of it.


Senator Boswell —Are you denying the President?


Senator Faulkner —I have not been informed as to what is going on. If you care to inform me, I am happy to cooperate.


Senator Boswell —The President wants to make a statement.


Senator Faulkner —I don't know that.


Senator O'Chee —I told you.


Senator Vanstone —Senator Faulkner might like to take the opportunity to take some advice from his manager as I am advised by the Manager of Government Business that there is some agreement on this matter. Perhaps, rather than simply interjecting and yelling over the table as he does at question time all the time, he could take a bit of advice for the smoother running of this place.

Question resolved in the affirmative.