Senator SHERRY (5:07 PM) —We are dealing with two pieces of legislation here today, the legislation that Senator Conroy and Senator Allison have been speaking about, the Diesel and Alternative Fuels Grants Scheme (Administration and Compliance) Bill 1999 , and also the Taxation Laws Amendment Bill (No. 9) 1999 . This legislation proposes to undo—and I stress `undo'—one aspect of the deal between the Prime Minister, Mr Howard, and the Australian Democrats to secure passage of the GST, namely the reduction of the amount of diesel fuel rebate eligible for forestry operations. If passed, this legislation will increase the amount of rebate in respect of diesel fuel to 100 per cent for forestry operations. The background to this is that the Diesel Fuel Rebate Scheme returns to certain businesses such as mining and primary production all, or a proportion of, the diesel excise they pay on diesel fuel used in their business operations. The rebate only applies to these off-road uses, presumably because of the historical link to excise and road funding.

The Prime Minister announced in a media release of 31 May 1999 the following change of policy regarding the GST package, which had proposed to extend the off-road uses of diesel which would qualify under the Diesel Fuel Rebate Scheme. The media release said:

The extension to the off-road concession for diesel and like fuels will be limited to providing full credits for marine use, bush nursing homes, hospitals, nursing homes, aged person homes and private residences, but not for construction, power generation, manufacturing or forestry. The proposed full credit for mining currently accessing the Diesel Fuel Rebate Scheme will be maintained.

That was the position of the Prime Minister on the deal done with the Democrats on the diesel fuel rebate in respect of forestry. In other words, the forest industries in this country were to have a reduction in the diesel fuel rebate. Obviously, that would have increased the costs of operation of the forest industries in this country.

The government then introduced the Customs and Excise Amendment (Diesel Fuel Rebate Scheme) Bill 1999, which was passed by this Senate on 28 June 1999. This bill specifically limited the amount of rebate for the forest industry in respect of diesel use to 35/43rds. In other words, it was a reduction—a reduction in the amount of rebate to be returned to the forest industry in this country. That bill has passed this parliament. That bill accurately reflected the deal done between the Australian Democrats and the Prime Minister, Mr Howard, to pass the GST legislation.

There is no doubt that that was the deal—to take away from the forest industries in this country part of their diesel fuel rebate. There is no doubt about that. I am glad that Senator Greig is in the chamber. I do not blame him for this mess—and this is a mess. He was not here when this shambles of a deal was put together, and he has had to try to pick up the pieces. Senator Greig, on Thursday 18 November 1999, at a Senate Economics Legislation Committee hearing, was question ing the detail of the diesel fuel rebate and its impact on the forest industry.

Senator McGauran —Why didn't you support us?

Senator SHERRY —I will get to you in a moment, Senator McGauran, because the National Party's position on this is an absolute disgrace—yet another example of the failure of the National Party to stand up for the bush. Senator Greig said:

But, as far as the Democrats are concerned, the position is not unclear.

The discussion continued:

Senator Conroy—So, is forestry in or out?

Senator Greig—It is out.

I notice—I acknowledge—he is nodding in the Senate chamber. Forestry was out. Reduce the diesel fuel rebate on the forest industry—that was the deal the Democrats did with the Prime Minister, Mr Howard. The questioning continued:

Senator Conroy—Doesn't this bill put it back in?

Senator Greig—It does.

Senator Greig is acknowledging, in relation to the original deal they did with the Democrats, which was passed in this Senate, that the Prime Minister, Mr Howard, has backtracked. He has backtracked. He has torn up your deal. We then had the Deputy Prime Minister, Mr Anderson, commence the second reading speech in respect of the bill that has already been passed by stating that the bill:

. . . implements changes to the Diesel Fuel Rebate Scheme agreed with the Australian Democrats as part of the package of environmental measures that will now accompany the introduction of the new tax system on 1 July 2000.

The Deputy Prime Minister is confirming that part of the diesel fuel rebate was to be taken from the forest industries, increasing the costs of operation for the forest industries. That was the deal. There is clear evidence—overwhelming evidence—that the deal was done. The forest industry was to lose part of the diesel fuel rebate and costs were to be increased in the bush. It is an important rural and regional industry. The costs of operation for forestry were to be increased in rural and regional Australia.

That was the deal. I checked out at the time what this was going to cost the Tasmanian forest industry, and it was going to cost at least $2 million a year extra for the forest industry in Tasmania alone. The forest industry in Tasmania represents about 15 per cent of the economy. It is a very important industry—a very important rural and regional industry—and employs a great number of people. It was to be hit with extra costs as a result of the deal between the Democrats and the Prime Minister, Mr Howard. But of course the picture very quickly changed. Once the forest industries pointed out that this was going to cost millions of dollars around Australia for the forest industry, the picture soon changed.

Before I get to the changing picture, what about the role of the National Party? I am glad Senator McGauran is here. I notice he is not speaking on this piece of legislation. What about the role of the National Party, supposedly representing rural and regional Australia? How on earth did they let this aspect of the GST deal get through? What were you doing?

Senator McGauran —It was part of the package.

Senator SHERRY —It was part of the package, says Senator McGauran. Senator McGauran is acknowledging that as part of the package they are going to slug the forest industries in this country with extra taxation, increasing their costs, increasing unemployment. We see yet again the failure of the National Party to stand up for rural and regional Australia. We do not need the National Party in Australia, Senator McGauran. The Labor Party represents rural and regional Australia. In Tasmania we do not have the National Party; we do not need them. It was the Labor Party that identified this particular problem and the significant impact it would have on—the hurt it would cause to—the forest industries in Tasmania.

I am going to turn to Senator Brown. Senator Brown is in the Senate chamber. Senator Brown and I do not agree on most issues in relation to forestry. Senator Brown's position is one that I do not agree with, but I respect it. At least he does stick with the principles he enunciates. Senator Brown wants to shut down the forest industries in Australia. The position of the Labor Party is that it is important to maintain sustainable forest industries and the employment that comes from that. These are important rural and regional industries. Senator Brown and I fundamentally disagree on the importance of the forest industries, but I will publicly praise Senator Brown on this one occasion. At least Senator Brown is consistent. At least he does not pretend to be adopting a pro-environmental view like the Australian Democrats.

The Australian Democrats have been trumpeting that the GST deal is great for the environment. They attempted to say, `We have a great deal. We are going to take part of the diesel fuel rebate off the forest industries.' What happened next? Minister Tuckey obviously got motivated because he was being bombarded with complaints from the forest industries. Minister Tuckey said the legislation was a mistake. The legislation that had passed this chamber—the deal signed in writing between the Prime Minister, Mr Howard, and Senator Lees and Senator Murray on behalf of the Democrats—was all a mistake. It should not have happened in the first place.

Consequently, the diesel fuel rebate is to be restored in full to the forest industries in Australia. I see Senator McGauran looking triumphant. Good on you, Senator McGauran, and good on the National Party. Where were you when the deal was struck? Why did you let this serious hit on the forest industries go through in the first place? It was simply a failure again of the National Party to stand up for rural and regional Australia. What we have here is a new piece of legislation. Of course, this is one piece of legislation which contains significant amendments. We have over 1,000 amendments to the GST deal that the Democrats and the government struck. This is one of the amendments to that particular deal, a deal which seriously hurt the forest industries in this country.

Mr Tuckey announced that it was all a mistake. But it is very clear from the public statements of the Democrats, the Prime Minister and the Deputy Prime Minister that it was not a mistake. This was agreed to. It was signed up. Yet now we have Minister Tuckey claiming, `The legislation was all a mistake. We didn't mean to take away part of the diesel fuel rebate from the forest industries.' What have the Democrats said about this backtracking, this backdown by the Liberal-National Party government on this issue? Nothing. They have not said, `We did sign up to a deal. Why aren't you implementing the original deal? Why aren't you sticking with the deal?' The Democrats have done nothing. They have just rolled over. They have accepted it.

Senator Greig, on behalf of the Democrats, if you are fair dinkum—you signed up to the deal—vote against this legislation here today. Through you, Mr Acting Deputy President, I dare the Democrats to vote against this legislation to show that they have some guts and determination to uphold the deal that they have admitted they struck with the government.

It will be interesting to see what the Australian Democrats do. I suspect that they will roll over. They will roll over with significant embarrassment because you cannot have it both ways. The Australian Democrats cannot have it both ways. They cannot triumphantly say or claim falsely that their GST deal was a great victory for the environment and then come in here and vote against a piece of legislation that restores the full diesel rebate to the forest industries. They cannot have it both ways, but I am sure they will try and do that. That is the essence of this particular piece of legislation in front of us here today.

There was considerable outrage, justified outrage, from a number of organisations about this aspect of the GST deal. The National Association of Forest Industries complained bitterly about the deal that was passed into law by the Democrats and the Liberal-National Party government. The representatives of the workers—the CFMEU, the AWU and the Transport Workers Union—all complained bitterly about this deal because this deal that has been passed into law and that we are now reversing a few months later would have hurt bush workers. Anyone who used any machinery out in the bush would have faced a significant increase in costs, and that would have resulted in greater unemployment.

I know Senator Brown has a different approach to this legislation, and I have already touched on it. We can anticipate what his position will be. At least Senator Brown has been consistent on this matter. But then there are the sorry Australian Democrats on this issue. It is a total rollover. Not only did they fail to protest at the reversal of this deal, which is what this legislation represents; they are now going to vote for it. This just highlights the inadequacies and the confusion of the deal done between the Australian Democrats and the Liberal-National Party government on the matter of the goods and services tax in this country.

There are other matters that Senator Conroy has outlined and I know some of my colleagues are going to touch on those. But this represents the GST deal at its very worst. There is confusion and a changing of position. They are not even acknowledging the backflip that has occurred by the Australian Democrats. Senator Greig is in an embarrassing position. He was not here at the time this deal was struck. He has to defend the indefensible.

I will conclude my remarks by saying that I have criticised the Democrats harshly. They deserve it on this issue. As I have said on a number of occasions in this place, where were the sorry, tired, subservient and subsumed National Party—the doormat of this government—on this important issue for rural and regional Australia? Where were the National Party when it came to protecting the interests of forest workers from a massive increase in costs because of the partial withdrawal of the diesel fuel rebate?

Senator McGauran —Right there in the legislation you're holding.

Senator SHERRY —The National Party disappeared. Senator McGauran, I would like you to participate; I acknowledge your interjections, I acknowledge that you are embarrassed. We would like you to participate and to explain why it is that this deal and the bill got through the Senate and we are now here reversing it for the forest industry and the forest workers of Australia. Explain it. What went wrong? If Senator McGauran is honest, he will acknowledge a major mistake was made and the National Party were not looking at this particular issue in any detail and they let it slip through.

Senator George Campbell —He's a Collins Street farmer.

Senator SHERRY —Yes, that's right. I am sure Senator McGauran, from his Collins Street office, was looking at the legislation but, unfortunately, it passed him by. This again highlights the general problems and confusion with the goods and services tax package and deal that was put together between the Liberal-National Party and the Australian Democrats. I look forward to the Democrats exercising some honesty on this issue and voting against this particular piece of legislation.

The Labor Party is not going to vote against this legislation—against the reversal of the withdrawal of part of the diesel fuel rebate to the forest industry—for very good reason. The Labor Party strongly believes in a sustainable forest industry. We strongly believe in supporting that forest industry and we do not want to see additional costs added to the forest industry in this country—an important rural and regional industry and an important employer, particularly in my home state of Tasmania, where it makes up 15 per cent of the economy and employs many thousands of Tasmanian workers.