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Thursday, 27 May 1999
Page: 5599


Senator CHAPMAN (3:10 PM) —Yet again we see the opposition desperately trying to continue its campaign against tax reform in Australia. Today it has raised the red herring of purported action by the Australian Competition and Consumer Commission allegedly being taken against a book retailer for false advertising. Apparently, this retailer has advertised that books will cost 10 per cent more under the government's GST. Senator Cook gets up here and not only rails against the government's tax reforms and GST but also says we are now restricting free speech with the ACCC proposing to take action against such advertising. The fact is that this advertising is false. That is why the ACCC quite correctly is taking this action.


Senator Cook —It is not false; it is true.


Senator CHAPMAN —Senator Cook says it is not. In his remarks today he repeated the falsehood of this advertising that the cost of books will go up by 10 per cent—an absolute lie.


Senator Cook —Madam Deputy President, I raise a point of order. The speaker is misleading the chamber by saying that my remarks are not true. They are true. By the speaker saying that they are not true, that is misleading this chamber and he should withdraw.


The DEPUTY PRESIDENT —There is no point of order. These are all debating points.


Senator CHAPMAN —As I will show in my remarks, this claim of Senator Cook's is a falsehood, as is the claim of the book advertiser that books will go up by 10 per cent. He says they will go up by 10 per cent because books currently do not have a wholesale sales tax on them, and therefore there is no tax to be removed before the GST is applied. What he ignores is the indirect or hidden effect of wholesale sales tax on the cost of books—as it has a hidden effect on many other goods. Even where there is no actual wholesale sales tax itself levied on an item, the wholesale sales tax still has a substantial effect on the cost of goods.

Let us take just as an example the wholesale sales taxes levied on the truck, on the fuel and on the tyres that deliver those books from the printer to the warehouse and from the warehouse to the retailer, which all add to the cost of the books. Transport in this country is one of the big input costs of all goods that are marketed in this country. Whether or not there is a direct wholesale sales tax on any particular good, there is a substantial contribution from the wholesale sales tax with its impact on transport costs.

This really highlights the importance of and the need for tax reform, because the effect of the existing indirect wholesale sales taxes that we have is completely hidden. People are completely unaware of the indirect tax they are paying through the wholesale sales tax system. I thank Senator Cook for highlighting the fact that under our existing system we have so much hidden tax that people are unaware of. I thank him for giving us the opportunity to inform people that that indirect tax is there. Of course, it is this wholesale sales tax that will be abolished as a result of the government's tax reform program.

There is also a range of state indirect taxes that would similarly impact on the cost of books. They are taxes that will also be abolished when the government's tax reform package comes into place. Let us have none of this nonsense from Senator Cook or from this firm advertising the books that the cost of books will go up by 10 per cent, because it is quite plain that they will not. It is therefore quite plain that the advertising which this firm is undertaking is false in the extreme. Therefore, it is quite proper for the Australian Competition and Consumer Commission to be taking this action against them.

The action of the ACCC highlights the way in which the consumer will be protected when the tax reform package comes into operation. In the tax reform legislation there is provision for the ACCC to take action against people who provide goods and services if they do not price their goods or services properly in relation to the new tax package—in other words, if they do not take the wholesale sales tax that is being abolished off those goods before they apply the goods and services tax. A very important role of the ACCC under the tax reform package will be to prevent businesses profiteering at the expense of consumers out of the introduction of tax reform.

This whole issue reinforces the hotchpotch of a tax structure we currently have in place—Labor's tax structure that they want to keep going at all costs. They do not want tax reform. The issue reinforces the importance of tax reform and the desperate and urgent need for it. That is what this government has been attempting to achieve. It is about time the Labor Party got on board and supported it and offered some constructive policies instead of opposition for opposition's sake at all costs. We have demonstrated problems with our existing tax system. Senator Cook, in raising this issue, simply reinforces and highlights the urgent need for tax reform. Get on board and support the government. (Time expired)