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Wednesday, 8 December 2004
Page: 102

Senator MURRAY (4:25 PM) —The Tax Laws Amendment (Retirement Villages) Bill 2004 ensures that supplies of certain services to residents of serviced apartments in retirement villages are GST free where the resident requires daily living activities assistance or nursing services. It was always the intention of the Democrats—and, as we understood at the time, of the government—that health care services be provided GST free. We always regarded health care services in the broad sense, not in the narrow sense. It is frustrating that nearly five years on the government is only now legislating to confirm this principle. On the one hand it is concerning that the explanatory memorandum indicates that there are $47 million in refunds that will need to be paid retrospectively to residents of retirement villages that have been incorrectly paying GST—that is a large sum of money. Of course on the other hand the government gets a big tick for retrospectively compensating people, because it is important that where the law has changed in this manner individuals and organisations are not prejudiced. We do urge the Australian Taxation Office to provide these funds as soon as practicable and possible.

The Australian Democrats are supporting the bill, but we do note the concerns of the retirement village industry that an aged care assessment team will be responsible for assessing the level of care that a resident of a retirement village requires. We understand the concern that ACAT may set a level of care criteria that would make the provision of care services in serviced apartments too onerous. It does not automatically mean that they will; they might not. We support the position of the industry and of the Labor Party that a registered nurse or doctor should be able to make this determination. More particularly, we support the broad intentions of the Labor Party amendments, which have been circulated on sheet 4442 revised. Amendment (1) says:

The Aged Care Minister must set by determination the way in which the levels of care services required by residents are to be assessed.

We think there is some sense to that, because in this area it is often a very anxious time for people. Knowing how their case will be assessed, we think, will be to their advantage.

Moving on from those remarks, with respect to the bill specifically I want to briefly make a couple of remarks about the GST. Overall the GST has been a wonderful boon to Australia. It has delivered tremendous certainty to state funding. It has replaced an inefficient wholesale sales tax on goods with a much more efficient, if admittedly complex, tax on goods and services. That was always a desirable proposition. I notice the states are singularly happy with the cash flow that they are now using.

Senator Patterson —Have they thanked you, Senator Murray?

Senator MURRAY —Many of them have thanked me privately, but I have yet to receive any public acknowledgement of the role we played.

Senator Patterson —You'll die waiting!

Senator MURRAY —I think I will die waiting. We have taken a lot of pain to deliver Australia a lot of gain. I do note, however, in some newspapers reports on and advocacy for a rather poor proposition that the GST should be revisited to apply to basic food. In response to that the Treasurer made it very clear the other day that he was not interested in that proposition. But I should remark that some of those very newspapers that are pushing that boat, that the GST should be extended into areas to which it presently does not apply, of course, forget to remind their readers that, at the time of the original debate, they were asking to be GST exempt themselves. That is a little fact that is conveniently left out of the commentary. I want to again put on the record that before the Democrats made the decision to amend the government's controversial tax package, we did listen to the evidence from a comprehensive parliamentary inquiry, which clearly indicated to us the benefits to low-income earners of basic and fresh food being GST free.

Some of these editorial writers and advocates imply that food is the only thing which is GST free, but I want to remind people that the coalition decided on extensive GST exemptions: for dwelling rentals, health services, education, financial services and exports, all of which total well over 20 per cent of GDP. In other words, right from the start the coalition advocated that one in five consumer dollars should not be subject to the GST, and basic and fresh food was added to that; it was not the only exemption or even the most important exemption. The Democrats agreed with the coalition's proposed exemptions, and we then broadened them to include basic and fresh food, which is consistent with GST/VAT systems the world over. We also negotiated extended exemptions in the health, education and charitable services sectors. I freely admit that we could have done a bit better; undoubtedly the government could have done a bit better. Everybody concerned could have done better. But, overall, I think it was a very good outcome in Australia's national interest.

Even without taxing food, this year the GST will provide the states with an additional $1.6 billion revenue windfall. I am sometimes astonished by the fact that people who say they are in the progressive sector of policy and thought and who want much more spent on services for Australians simultaneously oppose a GST system which delivers the money that enables those services to be provided by governments, especially bearing in mind that around three-quarters of countries in the world have those systems, and it is a very common tax methodology. Including GST on food now would not reduce small business paperwork significantly and it would do nothing to fix the other problems that are apparent, so we certainly would not support any proposition to go back and tax fresh and basic food. For the record, I do recall a little fact that is often forgotten: three times in divisions the Labor Party did, in fact, vote to apply the GST to food. It is on the record; it is in the Hansard. We should remember that. We are certainly pleased that the government have no interest in going down that route, and the Democrats certainly have no interest in it.