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Wednesday, 9 October 1991
Page: 1534


Mr HULLS —-Has the attention of the Minister for Primary Industries and Energy been drawn to a publication prepared by the Director of Research of the National Farmers Federation, Mr Paul Brennan, concerning a consumption tax? Can the Minister inform the House of the Government's position in relation to the disadvantages to the farm sector identified in that paper?


Mr CREAN —-I thank the honourable member for his question. Yes, my attention has been drawn to the paper. In fact, it was sent to me by the National Farmers Federation last month. It is interesting to go to a section of that report, which is prepared by the Research Director of the National Farmers Federation, which lists the main groups that would be disadvantaged by the tax reforms that are being touted by the Opposition. Apart from other areas in which it indicates that groups would be disadvantaged, one significant group that would be disadvantaged is that of low income households and large families.

The National Party really needs to look carefully at this document, not because of what it claims is the veiled support for the proposition that it is endorsing in the coalition, but because of the real concerns that the document raises. In the time that I have spent in this portfolio and as I have travelled into the rural community, many concerns have been expressed by that section of the community. The fact is that in the main this very group that is referred to as being disadvantaged represents farm families. They are low income families and they are large families--larger than the average.

The question of income is important because the coalition is trying to grapple with the compensation package. It is important to note that this year 45 per cent of farm families are not expected to pay any tax. Against that background, how can an effective compensation package be developed? That is the question that the Opposition has to answer. That is the case this year. For those who want to take heart from the fact that it is only as a consequence of this year that this issue is raised, I draw attention to the fact that generally farm incomes have been lower than the average in the general community. In fact, over the past nine years the average income for farm families was $12,000, as against the average for the community generally of $20,000. A goods and services tax will disadvantage low income families, which includes farmers, because low income families spend proportionately more of their income than do high income families.

If honourable members opposite couple with that this notion, which has not yet been denied by the Opposition, that it is planning to introduce a flat rate tax, there is double regression, firstly, because people on low incomes, and farmers in particular, will proportionately pay more tax as a consequence of the consumption patterns and, secondly, because the flat tax will advantage high income earners as distinct from low income earners.

The second point that needs to be understood properly by the coalition, and in particular the National Party, is that farm families pay more than the rest of the community. It is interesting, because in the honourable member for Kennedy's own State of Queensland the Government Statistician recently produced a survey which showed that regional prices in Queensland were some 8 per cent higher than those in urban centres. That difference compounds the effect of a goods and services tax. If it is a 15 per cent tax, that compounding effect is 1.2 per cent on top, and if it is a 22 per cent tax--which has not been denied--it is almost 1.8 per cent.

But there is one specific area that should be of interest to members of the National Party, because when the Budget was brought down they came into this Parliament expressing concern for the children of farm families in isolated circumstances and about what they claimed the Budget had not done. The question of schooling costs is a particular concern for people in the farm community. If we look at the data from the review of assistance for the isolated children's scheme, we see that, of the 14,500 students receiving assistance under that scheme, 9,000 were attending boarding school and the majority of those students were children from farming families. On average, two kids per family were enrolled in school, with the nearest government year 12 school over 96 kilometres away.

In the analysis that was done in that report, the average boarding school fees paid by children under AIC were close to $4,000. The transport costs were averaged out at between $580 and $648. There was no estimate of the average tuition fee, but a figure of $5,000 would not be an overestimate.

That means that, if a goods and services tax is introduced at 15 per cent, those farm families with an average of two children will have to pay an additional $3,000 per year just to send their kids to school. If it is a 22 per cent tax, the figure goes to $4,230. I think members of the National Party ought to have proper regard for this. They cannot come into this House piously claiming that this Government has not done enough in terms of Austudy and the isolated children's allowance when their own policy will add significantly to the costs of schooling for children of farm families.

The final point that I would make is this: I believe the National Party has blindly supported this goods and services tax in a desperate attempt to prop up coalition fortunes. The fact of the matter is that in blithely supporting it they have deserted their constituency. They have not treated this suggestion with the rigour it deserves, and for so long as we are on this side of the House and until such time as the Opposition releases the details, we will continue to draw attention to the anomalies. Why does the Opposition not get the details on the table so that its tax can be subjected to even more rigour? The Opposition has deserted these people; we will look after their interests.