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Tuesday, 26 May 1987
Page: 3331

Mr GEAR(5.24) —Mr Deputy Speaker, in your time in the chair you will have noticed that the debate on the Sales Tax Laws Amendment Bill has been a very wide-ranging one. Before proceeding to the substance of what I have to say today, I wish to pick up a couple of points that the honourable member for Parkes (Mr Cobb) made, and in particular his concluding comments on the broad-based consumption tax which, I must say, coming from a member of the National Party of Australia, were very brave. While I agree with many of the points he made, he left out a few. A broad-based consumption tax is better for the export market in that it is not built into the export market price as are many other taxes. On the whole, I found his defence of the broad-based consumption tax a very eloquent one. Coming from New South Wales as he does, I think that he would have trouble convincing his colleagues from Queensland about the virtues of a broad-based consumption tax. The Joh Nationals are dead-set opposed to it. I am not sure whether the wets and dries in the Liberal Party are for it. That will all come out in the future.

Earlier in his contribution, the honourable member talked about the overseas debt growing under this Government, and that is true. One of the main reasons is due to the fact that when the Opposition parties were kicked out of government, they left the economy in a state of collapse. They conveniently forget that. They never debate their record in government, mainly because it is indefensible. Whey they left office, there was absolutely nothing left of the manufacturing industry and there was very little hope for Australia. Then, as now, we relied on commodities to sustain us, or to earn us export income. This Government's policies have moved us away from that. Last month we saw, for the first time in a number of years, an actual decrease in the size of our national debt. That will continue as this Government's policies are put in place and as they start to work through the economy.

The honourable member also talked about complaints of delays regarding Telecom Australia and the fact that there are no automatic exchanges in his electorate. One has only to consider which party was in government for 30 out of 35 years and ask: What priority was attached by the former Government to putting those facilities in country areas? The former Government did nothing about that. It has been left to this Government. This Government has a much more rational policy towards putting communications facilities in place. What I can say to the honourable member for Parkes is that, when it is time for people in the country to get automatic switching facilities, they will get them.

The honourable member also said that this Government is hell-bent on collecting more tax. What the Opposition parties conveniently forget is that this Government has raised tax in a number of areas. For instance, we have received about $500m from the fringe benefits tax. Before we introduced the fringe benefits tax, a very small proportion of the Australian people were able to dodge paying their full amount of tax. According to newspaper reports yesterday, the capital gains is raising $1,000m. When the Liberal Party talks about knocking off the capital gains tax, it should digest the quantity of the capital that is flowing into the system. It underpins the reasoning of this Government for bringing in a capital gains tax, and that is to put a floor under the income tax base.

Although we have raised taxes in a number of areas that were crying out for reform, the Opposition parties forget that we are giving the tax collected back to taxpayers. We have given tax cuts amounting to $4,500m, the second instalment of which will be brought into effect on 1 July. The Opposition parties conveniently forget that when they were in government the top tax rate was 60c in the dollar and it stayed at that rate throughout their period in government. This Government has got the rate down to 49c. Whilst the present Leader of the Opposition (Mr Howard) was Treasurer, the bottom tax rate was 30c. This Government has brought that down to 24c. So this Government has not kept all the money that has been collected from the new taxes. We have actually given it back to the people in the community who were subsidising people who were dodging their obligations.

Like the honourable member for Charlton (Mr Robert Brown), I am absolutely amazed that the honourable member for Parkes has seconded the amendment. The amendment talks about `the adverse impact on ordinary families and on business and farm costs of increases in telephone and postal charges'. If the honourable member for Parkes follows the espoused policy of the Liberal Party to privatise Telecom, I would ask him: What would be the effects on the people in his electorate? The Minister for Communications (Mr Duffy) has given me a breakdown of the cost. For the Parkes electorate the cross-subsidisation is $508 for every telephone subscriber. Everyone in the honourable member's electorate currently is being subsidised at a rate of $508. Yet, what the honourable member for Parkes is doing in seconding the amendment is saying that we should have a much more rational basis and that this cross-subsidisation should not continue. As I have said, with a privatisation policy, each of his constituents would be disadvantaged to the tune of $508. (Quorum formed)

It really does speak volumes for members of the Opposition that they have to call quorums continually and interrupt the proper procedures of the House in order to waste time. What they are concerned about-I would be too if I were on that side of the House-is the fact that every time a Government member gets up to speak on any Bill it always highlights the deficiencies of members of the Opposition. One thing we have never got from them-I do not think we ever will-is any matter of policy. When we talk about sales tax amendment Bills or any tax Bill at all, we never hear them deal with the following points: Firstly, we never hear them defend their record in government and the shonky tax system they used to peddle while they were in government; and, secondly, we never hear them talking about what they will do should they ever be returned to Government. The main reason they will not talk about the first point is that they are so ashamed of it. The system was so full of holes that the people of Australia eventually kicked them out because of it. The reason they will not talk about the second point-that is what they will do in the future-is that they do not know. As John Howard says: `We have got the policy, we just cannot make the numbers add up'. We know that members of the Opposition cannot make the numbers add up, because we know what the costings are. One of the great things about the Leader of the Opposition is that he can turn the inability to come out with a tax policy into a virtue. It is his big, new, secret tax policy. We all know that the Leader of the Opposition is holding off on the tax policy because once it sees the light of day and gets shot full of holes he will not be sitting in his seat very much longer. We are used to all these tactics and the calling of quorums. They show the basic deficiency in the Opposition.

One thing that is upsetting the Opposition parties is the action of the Government following the May economic statement of which this legislation is just one part. Mr Deputy Speaker, you would know that when the economic statement which was made very eloquently by the Treasurer (Mr Keating) hit the international money scene the dollar went up and interest rates went down. The money market accepted that this Government was taking the hard decisions that the Opposition had shirked for seven years. Not only that, the people in the electorate saw what the Government was doing; they saw that we were dinkum about getting government spending down; they saw that we were concerned about those people who could not look after themselves, such as pensioners and people on low incomes; and they saw that we were very constructive about the way in which we brought in changes to our policies. I cite the replacement of the unemployment benefit for 16- and 17-year-olds with the job incentive payment. It was a very much more constructive way of using taxpayers' money. That decision was accepted in the community. I received only two telephone calls and they were both to congratulate the Government. No wonder members of the Opposition are upset, no wonder they are calling quorum after quorum-they cannot stand having the facts spelt out to them.

Let me just quote back some of the things members of the Opposition said about the size of the cuts demanded by them. These were the hairy-chested comments before the May statement. Mr Sinclair said that we would have to take at least $4 billion off in expenditure in the May statement. Mr Carlton, the Opposition spokesman on finance, also said that the cuts would have to be around $4 billion. Senator Short-I have never heard of Senator Short, but for some reason he has popped up in these quotes-also said the cuts should be $4 billion. What did the Government deliver? It delivered in excess of $4 billion. This Government has actually delivered what members of the Opposition were asking for. They are real cuts, not the shonky cuts that were brought in by members of the Opposition when they were in government.

Let us talk a little more about the Sales Tax Laws Amendment Bill and some of the things it does specifically. First of all, it recognises for the first time that government instrumentalities run as business; they are commercial enterprises. Back in the good old days-I say `the good old days' for those people who can remember back that far-to when the Opposition was in government and no one cared much about spending-the Government could blow Budgets out. Nowadays, we have to bring Budgets back. Back in those good old days the Postmaster-General's Department looked after Telecom Australia and Australia Post. It was a government department, that is why it had a tax exempt status. The deficiency in its changeover to a commercial status was that it kept a tax exempt status. We have removed that to make sure that when it operates as a commercial enterprise it does so in exactly the same way as any commercial enterprise in the business community. I thought the dries at least would recognise the interference in the market of the policy of allowing a commercial enterprise to have a tax break over its would be competitors, but, no, we have not heard one word from the Opposition about that. A cross-subsidy was operating. Let us take Telecom and Australia Post--

Mr Ian Cameron —There is no cross-subsidy in Maranoa.

Mr GEAR —The honourable member for Maranoa pops up. He is renowned for some of the most outrageous statements. When a person has a seat as safe as his, he can make the outrageous statements that the honourable member makes. When we talk about cross-subsidies he would know that everybody in his electorate who has a telephone is subsidised to the extent of $1,080. If he wants to tell people in the Maranoa electorate that he does not believe that they should have $1,080 subsidy from the taxpayers of Australia, he can go right ahead. If he will not do it, I will do it for him. This legislation will remove another cross-subsidy. Not everybody in Australia has a telephone or uses Telecom facilities, yet everybody in Australia through the taxation base is subsidising people with telephones. The effect is that 100 per cent of the population are subsidising a smaller percentage of the population using Telecom facilities. That is exactly the same for Australia Post. Businesses are big users of Australia Post compared with the average pensioner or people on low incomes who only post a Christmas card or one of two letters a year. We can see who is getting the cross-subsidy there. The proposal has some social progressivity if it is looked at in that light.

The domestic producers of equipment bought by Telecom, Australia Post and other government instrumentalities benefit from the cross-subsidy effect. Overseas suppliers have benefited because Telecom and Australia Post do not have to pay sales tax on imported goods. This proposal will give domestic producers a much better chance of gaining the business of enterprises that are publicly run by the Government.

This Bill also introduces a duty free shopping aspect. The honourable member for Mackellar (Mr Carlton) has been swanning about the disadvantage of the poor old people who go overseas. We all know who goes overseas-it is not pensioners or people on low incomes, it is people on high incomes. They swan around Europe and all over the world two or three times a year and take advantage of all the tax rorts of duty free shopping. The people who are buying diamond rings, the big sparklers, are not pensioners. The honourable member for Mackellar was talking about the thriving, duty free jewellery industry. I will tell honourable members who was subsidising it-the taxpayers of Australia were subsidising it for the more affluent who were going overseas all the time and coming back with outrageous amounts of duty free goods. For the first time the Government has recognised that it should make the laws equal for everybody. Four hundred dollars to me seems an adequate amount.

Mr Goodluck —Oh!

Mr GEAR —There are moans from members of the Opposition. We expect moans from the Opposition. The honourable member for Franklin (Mr Goodluck) who claims to represent people on low incomes is moaning. Why is he moaning? The people down in Tasmania--

Mr Goodluck —On a point of order, Mr Deputy Speaker: I take offence at that remark. I am allowed at least to sigh.

Mr GEAR —The honourable member moans because I am telling the truth. Pensioners who pay their taxes are, through the income tax system, subsidising the people with the big sparklers-those who swan around Europe in Mercedes Benz cars. They get the benefit from duty free shopping, not pensioners and those on low incomes; yet the Opposition is moaning. We would not expect anything else from the Liberal Party of Australia. At least the proposed move is socially progressive; it recognises that when people go overseas there should be a limit on the amount of goods that they can bring back to Australia.

Another aspect of the policy is that it provides an incentive for people to travel within Australia. One of the real advantages of going overseas rather than taking a holiday in Australia is the large amount of goods that people can buy duty free, at the expense of the taxpayer.

Mr Blanchard —They can go to Tasmania.

Mr GEAR —I have to point out to my colleague the honourable member for Moore (Mr Blanchard) that, unfortunately, Tasmania is still chained to Australia. There are no duty free concessions there, much as I would like them-and as would the Liberal Party because there are a few people down there with big sparklers. This policy is an incentive for people to spend their money in Australia. The House knows that this Government has, above all, put the highest priority on selling Australia overseas. Unlike the previous Government, we are proud of Australia. We honestly believe that people should see Australia and should not swan overseas because of the inducement of duty free goods.

Mr Gayler —Hear, hear!

Mr GEAR —I note that the honourable member for Leichhardt (Mr Gayler) is in the chamber. He comes from Cairns, one of the great tourist spots. He represents it very well. He knows that, above all else, this policy will ensure that more Australians see Cairns. Yet what does the Opposition say? It says: `Make it $1,000; lift the limit; give back all the benefits to the people on high incomes'. I am surprised that the honourable member for Franklin should go in to bat for people on high incomes and say: `Aah'. He should be saying that all the pensioners in Franklin, all the battlers, are subsidising the high earners. He should be voting with us to end the rort and to ensure that those who go overseas cannot rip off the system. The goods that they buy in the duty free shops are not Australian, they are Sanyo and Seiko and the other high quality goods from Japan.

Mr Robert Brown —They all break down.

Mr GEAR —Actually, they do not break down, because the Japanese produce very good goods. However, the fact is that that does nothing for Australian industry. At least now there will be social progressivity. The Government is ensuring that Australian money stays in Australia, and I do not know why the Liberal Party is opposing that.

We have heard nothing from the Opposition about what it would do in government. It is nothing but a political jellyfish-no guts, no brains and no backbone. We will never hear anything from the Opposition about anything that it intends to do. It is reduced to calling quorums and hiding behind dubious statistics. I have no doubt that when the next Opposition member speaks, he will not tell us what the Opposition will do, but will bring up airy fairy statistics in an attempt to prove that the Government is the highest spender and the highest taxer. The Opposition can say that until the cows come home, but the facts speak for themselves-this government has done more than any other Government to ensure that the tax system is fair.

Mr DEPUTY SPEAKER (Mr Ruddock) —Order! The honourable member's time has expired. I did not wish to interrupt the honourable member while he was speaking, but on a number of occasions he endeavoured to compromise the Chair by involving it in approval of the points that he was making. I do not think that that is an appropriate technique to use during debate.