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Wednesday, 7 June 2000
Page: 14857

Senator IAN MACDONALD (Minister for Regional Services, Territories and Local Government) (5:06 PM) —If I can finish the words for Senator Ludwig, not only have I praised rural transaction centres but the Labor leader, Mr Beazley, has also praised them. So I guess, like the GST, it is a bipartisan approach to life: we all agree on the GST and we all agree on rural transaction centres.

Opposition senator—What about post offices?

Senator IAN MACDONALD —Our policy on post offices is different, Senator; you are quite right.

Senator Mackay —You close them.

Senator IAN MACDONALD —Under your regime 277 post offices were closed across Australia, many in rural and regional Australia; under our government they have been maintained. I thank those senators who have made a sensible contribution to this debate. In particular, I note Senator Greig's contribution—parts of which, with respect, were difficult to follow. But certainly in some other parts Senator Greig was right on. He is, of course, a former member of a local government council. He said that as he travelled around councils he found that they had no major concerns. No major concerns have been raised about the GST or its impact on councils. He is only agreeing with the Labor Treasurer for New South Wales, who has said it is good news for councils. So we have agreement across the board—the ACCC, the Labor Treasurer for New South Wales, Senator Greig and the councils that Senator Greig has gone out to see. I do not want to dwell on the Democrats approach to this, but I could say to you, Senator Mackay, `Please go out and talk rationally with councils. Don't try to raise political points and to play petty politics. Go out and talk to them and you will find, as Senator Greig has done, that, while some of them have some problems with implementation, by and large they understand the benefits.'

In the first part of her contribution, Senator Mackay set out what the bill before us is about. Its purpose is outlined in the second reading speech, which I have tabled, and I will not repeat it. Suffice it to say that the amendment allows for local government financial assistance grants to be maintained on a real per capita basis as we have promised. It also contains provisions for the unlikely event that councils for some constitutional reason say that they do not have to pay the GST. In that event, if they happen to be right, the relevant state or territory would be required to retain the same amount from their grants—the impact of that being that even if councils are inclined to do it, they will not. But I know most councils around Australia—they are run by responsible people, and I am sure that they will abide by the law.

I regret that I was not able to sit through the whole of the contributions on this debate. However, some points were made that require a response. I am not going to respond to those speakers who made the vicious, personal attacks on me that have become typical of some of the Labor Party senators. I am a big boy; I can take it. But they always do this when I am not here. In question time, when they have an Australia-wide audience, not once do I get a question from anybody on the Labor side. We would welcome some contribution to the debate. Perhaps Senator Mackay lacks the confidence to do it—I am not sure what it is. But not since 19 October last century did Labor ask a question on rural and regional Australia or on local government. That shows the Labor Party's involvement and interest in this issue.

Some comment was made about the cutback of some funds by this government when it came into power. The reason for that, Mr Acting Deputy President, as you would well know, is that Mr Beazley, as finance minister, left us a $10.8 billion black hole, which had to be met. As a result of his black hole and his government's mismanagement of the economy, councils were paying huge amounts of interest on loans. I was on a council immediately before I came into this place, and we were paying about 14 or 15 per cent on our loans because the national economy was in such a rotten state because of Mr Beazley's leadership. As a result of our government's good management of the economy, those same councils are now paying about six or seven per cent. In many public speeches, I have been through the real savings to councils that that represents—of far more value than a cutback to meet Mr Beazley's black hole. Our financial management has meant that councils pay less, and it has more than compensated for the cutback we had to make to get councils—as we did with state governments—to contribute to Mr Beazley's black hole.

Senator Mackay also spoke about the ANTS package generally, which has real savings for councils. Again, I quote not only Senator Greig, not only the Labor Treasurer of New South Wales, not only the ACCC, not only the Victorian government's Arthur Andersen report into Victorian councils, but councils right across the nation, who recognise that the ANTS package is really good news for local government. Admittedly, there are some start-up costs, but they are more than overcome by the annual savings that councils will make.

Senator Mackay made some mention of regional Australia—I think she was saying that I never went there. I will give you my itinerary, Senator Mackay; I very rarely get home. In fact, I do not think even my cat recognises me now, because I am always out going around rural and regional Australia and talking to rural and regional Australians. Neither Senator Mackay nor Mr Ferguson can help it if they live in a capital city.

Senator Mackay —I live in Tasmania, you idiot!

Senator IAN MACDONALD —I thought you lived in Hobart. That is not Tasmania, obviously! But that is okay. There is nothing wrong with that; we cannot help where we live. But, Senator, it is a little bit rich for you to start lecturing me about rural and regional Australia.

From the bits and pieces I heard of the speeches, I understand I was being lectured about not having an empathy with local government and that they were talking about those of us who had been councillors. This is a good game we can play: `We've got this many and you've got that many.' If only you had confined it! Senator Mackay, on our side in the Senate we have my colleague Senator Calvert, a very distinguished warden—and for those of you who are not from Tasmania, that means mayor—of the Clarence Municipal Council for many years, from 1976 to 1988. He was on the council and was warden from 1983 to 1987. His record is very distinguished, and if I ever need any advice on local government Senator Calvert is always willing to give it, because he knows what it is all about. Senator Eggleston was mayor of the town of Port Hedland for three years, from 1993 to 1996, and was on the council from 1988 to 1996. My colleague Senator Heffernan was president of the Junee council during the periods 1989-90 and 1991-93 and was on the council for some 15 years. I have been on the Burdekin Shire Council for 13 years. Senator McGauran was on a council for three years, and Senator Tambling was on a council for a number of years.

I give credit where credit is due. There are some Labor senators who have been on councils. Senator McLucas was on the Cairns City Council for four years and that great expert on rural and regional matters, Senator Conroy, was on the Footscray City Council for some period of time. Senator Greig, as I mentioned, has been on a council and Senator Allison from the Democrats was on the Port Melbourne Council for a couple of years in the early 1990s. Not much turns on that, but on this side of the Senate there are people who understand local government. That is why the package is so good for local government—because people on this side of the chamber made a contribution to the development of the tax package.

I heard Senator Mackay say something that is going to go down well in regional Australia. Rest assured, Senator Mackay, that I shall tell people in regional Australia. I will get the exact quote from Hansard, but I heard you say that regions are urban and urban is regions. I am sure people where I go out in rural and regional Australia will be delighted to know that your definition of regional—

Senator Mackay —I didn't say that.

Senator IAN MACDONALD —Be careful. The Hansard never lies. I actually wrote this down. I was listening to you then.

Senator Mackay —Why didn't you come into the chamber?

Senator IAN MACDONALD —Because I was meeting with a high-level group of bankers, working out how we could provide better banking services to rural and regional Australia. And all day I have been involved in meetings that are positive contributions to government policy. I was not in here defending myself from the vicious, politically personal attacks. Have fun with that. I don't mind that. Go your hardest; I don't worry about it. I am sure the people listening on the broadcast day will shun me as a result of what the Labor Party have said about me, but never mind. It is a pity that, instead of attacking me personally, we did not hear some policy exposition from the ALP.

Senator Mackay —I told you about Labor Party policy.

Senator IAN MACDONALD —You told me when you were going to give us your policy. You said it will be after the next election. That is great. `You will find out about the Labor Party's rural and regional policy, Senator Macdonald'—so Senator Mackay told me in estimates—`when I am sitting there,' that is, after the next election. So after the next election they will release their regional affairs policy. It is now the Cook-Mackay approach to policy release: after the next election. That is beaut. We look forward to that.

Senator Crossin raised the interesting issue of horizontal fiscal equalisation—quite a sensible approach. It is a difficult issue. For those of you who are not familiar with it, when the Commonwealth give out the $1.25 billion grants to local government each year, we give them out principally on the basis—if I can put this simply and not technically—of making sure that Australians, no matter where they live, get roughly equitable access to standard municipal services. That is what the financial assistance grants are all about. We proceed under an act of the former government that provides that. As I recall, when it came to the Senate as a bill the coalition supported it. It provides that that $1.25 billion annually goes to the states on a per capita basis. Obviously New South Wales and Victoria get much more than the other states because of the per capita distribution. Once it gets to the state level, it is then distributed from the state base on a horizontal fiscal equalisation basis. That is trying to give a fair share to some of those councils that have lesser rating capacity or greater needs.

In bringing forward a review of the financial assistance grants and getting the Commonwealth Grants Commission to conduct that review for me, I did approach local government associations across Australia and the various state governments as well. I indicated that the government had decided that it was not appropriate in this review to look at the question of the interstate distributions on a per capita basis. I got responses from a number of states. I suspect it is not appropriate for me to say what ministers say to me in private correspondence. Suffice it to say, Senator Mackay, that you would be surprised at which states actually said, `No, we don't want you to look at that.' I will give you a little tip, though: they were Labor states. I will not say a couple, a few or many because that might give it away, but there were Labor states which said, `Yes, you shouldn't look at that.' Senator Mackay, you might be interested in doing a bit of research on that before you say too much about it, and perhaps you should counsel Senator Crossin.

I suppose Senator Crossin could easily say, `I wasn't in the parliament back in 1992 when the Labor government looked at this issue,' but I understand that Mr Snowdon in the other place made a big point about this. I think he said he was going to make it his life's work to make sure this happened. Mr Snowdon had 13 years. He was out for three but he had a lot of years when Labor was in power and did not do anything about it; not a thing about it did Mr Snowdon do. It is easy to stand up and talk but, when you were there and had the opportunity to do it, what was the action? Absolutely nothing. I do not think you were here, Senator Mackay, but I was when the Grants Commission came out and said they had looked at this and they thought it should be distributed interstate on an equalisation basis, but there was no data so they recommended against it. I would not say this, of course, but one wonders what the attitude of the government of the day and the relevant ministers might have been. I think the minister at the time was a Victorian, and one wonders what his view on it might have been. So the Labor Party had every opportunity to do it and did absolutely nothing. Senator Mackay, you might counsel Senator Crossin on just what she is going to do.

Senator Mackay —So what are you doing?

Senator IAN MACDONALD —Senator, if you have not seen the terms of review I will make them available to you, but I think I have sent them out to everyone who might be interested in them, and I am sure you would have got a copy.

There were a number of anecdotal questions raised. Perhaps issues of South Sydney were raised in the debate. A more scurrilous and dishonest publication I have never seen. The South Sydney Council should be absolutely ashamed of itself for trying to mislead its electors in the way it did. The mayor of that council is quite openly a Labor mayor. He is from the right, so not many of you in this chamber would know him. He is from the Sussex Street mafia, I am told. He stood in Bligh against Clover Moore last—

Senator Mackay —Go outside and say that, Ian!

Senator IAN MACDONALD —Say that he is from the Sussex Street mafia? I do not want to get a writ for defamation from the mafia. The mafia would sue me if I said that outside. I do not want to defame the mafia by aligning them to the Sussex Street group. That publication would have to go down as the worst piece of dishonest dissembling that one has ever seen. It is littered with deliberate untruths: `A bottle of water gets the GST at the swimming pool, no GST outside.' Senator Mackay, even you must have cringed at that.

Senator Mackay —How would you know? You don't even know.

Senator IAN MACDONALD —Even if there were GST on it, it would be on it whether it was sold inside the pool or outside the pool. There is no difference in the application of the GST depending on who sells it. Of course, bottled water is to be GST free. That is the sort of thing, I regret to say, that the Labor Party is distributing. Even in your worst moments—and your party has been, if I can say it politely, fairly borderline in some of the things it has said about the GST in this chamber and in the other chamber—you have never gone to deliberate lies on how this would impact. I am so disappointed that an elected local government authority in Australia could deliberately be that misleading in its publications.

I can contribute little further to the debate. I understand the other parties have agreed with the base approach of the act to make sure that councils continue to receive their $1¼ billion in grants from the Commonwealth government. I thank the Labor Party and the Democrats for their support for the bill. I notice that Senator Mackay is moving an amendment to the second reading motion, expressing concern that financial assistance grants to local government have been cut in real terms. I have explained that, but I emphasise that what local government have gained out of the government's financial management is much lower interest rates. That will mean substantial dollars to them. We are criticised for attempting to terminate local government funding. That is an issue of a past time. I agree with it. At the last election, our approach was that the states would get their GST money only if they agreed to pay to the local governments what we were paying to them. So we protected and guaranteed local government in putting that onto the states. Unfortunately, we were not able to get that through, but that is all history now. (Time expired)

Question put:

That the amendment (Senator Mackay's) be agreed to.