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Wednesday, 4 November 1992
Page: 2551


Mr GIBSON —Is the Treasurer aware of claims that Australia's taxation system undertaxes services relative to goods? Does Australia's current taxation system impose very low rates of taxation on some services? Is there any evidence that higher levels of tax on those services give Australia a fairer and more efficient taxation system?


Mr DAWKINS —I am aware that there are some arguments put about that provision of services in Australia is undertaxed. Indeed, the policy manifesto of the Opposition says—

  Mr Tuckey interjecting


Mr SPEAKER —Order! The honourable member for O'Connor!


Mr DAWKINS —It says:

The main distortion is that services are not directly taxed. Their omission is clearly regressive because services, such as restaurant meals, taxi fares and hair styling are consumed disproportionately by the well-off.

It is true that in Australia there is a very light taxation of services, but it is entirely false that, as the Opposition maintains, services are consumed disproportionately by the well-off and therefore this omission, as the Opposition calls it, is regressive. Take, for instance, public transport fares. Does the Leader of the Opposition really believe that the imposition of 15 per cent on public bus fares and rail fares is going to be paid for by the well-off? Does he really believe that? Does he really believe that when he imposes 15 per cent on water and sewerage charges, on gas bills, on electricity bills, on postal charges, on portions of local government rates for garbage collections these charges are going to be paid disproportionately by the well-off? Does he believe that when the State public housing authorities impose 15 per cent on their rents these rents will be paid disproportionately by the affluent?

  Opposition members—Wrong, wrong, wrong!


Mr SPEAKER —Order!

  Mr Connolly interjecting


Mr SPEAKER —Order! The honourable member for Bradfield will cease interjecting.


Mr DAWKINS —Does he believe that when a pensioner engages a plumber to clean his or her drains and the plumber imposes a 15 per cent tax on that service that is going to be paid by the well-off? Or do Opposition members believe that the wealthy have more blocked drains than the poor? For instance, who is more likely to have shoes repaired—the poor or the wealthy? Yet 15 per cent goes on the cost of repairing a pair of shoes. Similarly, with car repairs: it is okay if your employer provides your car. If your employer provides your car, provides the maintenance for the car, then the 15 per cent on car repairs is a matter of total indifference to you. But what about those people who can afford only older cars and who therefore need to have them maintained more regularly? They are the ones who will be paying the 15 per cent on each and every car repair.

  So what we have is a tax which will increase the cost of drawing up a will, conveyancing on a house purchase, fire insurance premiums, life insurance premiums, superannuation fund charges, a pensioner's subscription to the local bowls club, bank charges, estate agents' charges, swimming lessons for the children, dry-cleaning bills, telephone charges and posting of a Christmas card to a relative.

  Opposition members interjecting


Mr SPEAKER —Order! There is far too much noise.


Mr DAWKINS —Can you imagine pensioners posting a Christmas card to their grandchildren being taxed at 15 per cent? Of course, then there are funerals as well. If they have not got you in the meantime, they will get you at the end. This, Mr Speaker, is of course fairness Hewson style: put up the taxes on the poor at the same time as you cut their wages and their welfare benefits.