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Thursday, 27 May 1999
Page: 5601


Senator CONROY (3:16 PM) —This government stands exposed today for its inaction and its untruthfulness in this chamber. It continues to pretend that the prices that the Treasury calculated for the second year are the same as for the first year. That is the first untruth uttered in this chamber in the last few minutes. All the calculations that the minister and Senator Chapman talked about are second-year price effects—not the real effect that will happen in the first year and not the impact on books in year one. The government likes to quote the ANTS document. The ANTS document uses second-year price effects, not first year price effects.

Senator Chapman said `purported'. Let me read to you the letter from the ACCC. Let us see how purported, according to Senator Chapman, this letter is. On ACCC letterhead, the ACCC wrote to the proprietors of Gleebooks on 6 May 1999 and said:

Concerns have been raised over the accuracy of this statement—

that books will cost 10 per cent more with a GST—

particularly as details of the operation of the proposed GST are not yet final.

That is an interesting point for a start. How would the ACCC know what the outcome will be? How are they able to judge if, in their own words, they say, `The outcome is not yet final'? But let us not worry about that. They go on to say:

The GST, as currently proposed by the Federal Government, includes the withdrawal of several existing taxes, and an allowance for input tax credits for registered traders. Both these factors have the potential to impact the cost, and therefore the final price of new and second-hand goods, in addition to the imposition of a 10% GST.

The letter says `have the potential'. The ACCC cannot guarantee this. The ACCC absolutely cannot guarantee that the 10 per cent will not go up. They are motivated purely and simply by their desire to protect the government's position, because they know—and they have admitted it at the Senate estimates process—that they cannot protect consumers.

The ACCC exists because perfect competition does not exist in the real world. They went on to say:

It is considered that in many cases the introduction of a 10% GST will not result in a 10% increase in the price for a particular good or service.

They said `in many cases'. Books, which are currently almost not taxed in any form, may have to go up by 10 per cent. The ACCC cannot even definitively say there is no case. They say: `in many cases'. It is on that ground that they are prosecuting and threatening Gleebooks. They go on to say that they may take injunctions, and that they may offer damages to persons who have suffered loss and other ancillary orders against a bookshop.

Contrast that with what happened recently with the health rebate. We saw a $7 million advertising campaign by this government, using taxpayer money, which the ACCC noticed after it had finished was illegal. Following a request from Kelvin Thomson, the shadow Assistant Treasurer, they came up with the following response:

The Commission has carefully examined the Government advertising in question and is concerned that representations such as "Private health cover will now be 30% cheaper for all Australians" could potentially mislead the public.

No threats of injunctions; no damages against customers. They said:

The Commission was also concerned that the Government advertising may have had a "flow on" effect upon the advertising of the rebate by private health funds.

No threats at all to private health funds for their misrepresentations. They went on to say:

It should be noted that the Commission is of the preliminary view that the Trade Practices Act is unlikely to apply to Government advertisements of this kind.

They can go out there, attack a small Aussie battling business in Glebe and then turn around and say, `Oh dear, we can't possibly look at the government.' They said:

In light of the action taken by the Department outlined . . . the Commission does not intend to take further action in respect of this matter at this time.

One rule for the government when they are caught red-handed misleading the Australian public, but do you dare to mention that Treasury has misled this community on the costings of this package? If you accept all of Treasury's bodgie assumptions, you can come up with a second-year figure that Senator Kemp says is four per cent. But if you net it out for books, it is nearer to 10 per cent—and that is if you assume all of the government's positive assumptions. If you look at some more real-world assumptions in the package, the cost on books with a GST is a 10 per cent increase. The ACCC stand condemned and the minister stands condemned. It is an outrage. They are attacking an Australian small business while they are letting the government get away scot-free. (Time expired)