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Wednesday, 16 March 2005
Page: 25

Senator SHERRY (10:54 AM) —The Labor Party will not be supporting this amendment, nor will it be supporting the linked second amendment which changes the tax-free threshold. Before dealing with that I will comment on a related matter. I know that, in general, with tax bills that are wide ranging in their nature and that contain a number of schedules and a number of matters, it is traditional to raise—although perhaps not strictly in accordance with standing orders—virtually anything to do with tax. I really was not sure whether Senator Chapman, on behalf of the government or a government backbench, was speaking in support of the bill. I thought it was more like an attempt to set up yet another Liberal government backbench ginger group, the Chapman ginger group, with his critique of alleged problems in respect of trust structures.

We have these fringe pressure groups springing up everywhere. We have the Chapman group now, its issues in direct contrast to the issues that the Turnbull ginger or pressure group was raising, and of course we have the Panopoulos-Fifield ginger group. We have all this jostling amongst these various ginger groups on the government backbench—(1) for attention and (2) for, at times, quite contradictory approaches to tax reform in this country. I thought Senator Watson’s comments on the bill itself were more to the point. I may not agree with everything Senator Watson said, but his comments were more to the point of the speech and contribution on the bill.

I thank the minister for her response. The point about the costings of the petroleum measure is that they should have been included in the EM. The figures she gave us were not included in the EM. I think that was as much our concern as the figures themselves. Labor believe the impact of the MTRs is a disincentive; as best as we can indicate, it is three to four per cent. In terms of the debate, that is more for noting as one of the consequences. Whilst I do understand these things are difficult to calculate, if the Labor opposition can come up with an approximation I am sure that Treasury and the tax office, with all their thousands of public servants with expertise in this area, can come up with at least an indicative figure; but they have not.

The minister’s response in respect of the review of the STS grouping rules brings me to Senator Murray’s attempt to effectively wipe out and scrap what is proposed in schedule 1. As I have indicated in my speech and as my colleague in the House of Representatives has indicated in his contribution in the other place, we do see some potential problems with the implementation of the measure the government is proposing. But Labor have taken the position of ‘let’s give it a go’. The government has announced a measure for fostering entrepreneurial home based economic activity; let’s give it a go. There may be some unintended consequences—we have identified issues relating to costs and possible accounting work and fees, and we have drawn the attention of the government to some issues in terms of the potential for tax avoidance minimisation—but the bottom line is: let’s give the measure a go.

The Democrats are fundamentally opposing this measure. We do not just consider the fact that this was an election promise made by the government; obviously, we consider these matters in the totality of the case being advanced by the government. But Labor do not agree with the fundamental approach of the Democrats to scrap the measure and not support it. Labor will not do that, and if there are problems further down the track with the measure then, hopefully, corrective action will be taken. We are disappointed that the minister has stopped short of indicating a formal review and is instead relying on monitoring by the tax office and Treasury, but that in itself is not a reason to oppose this initiative and knock it over before it even starts. We do not agree with that approach.

Linked to knocking over the proposal which, as reflected in the amendment moved by Senator Murray, is opposed by the Democrats is a further amendment with regard to increasing the tax-free threshold. I am going to give Senator Murray and the Democrats a bit of a flick here. If they are so concerned about the tax-free threshold, where were they when they cut their deal to fundamentally reform the tax system and introduce the GST? The Democrats cut the deal with the government on the GST and tax reform some years ago to repair what was allegedly a broken tax system. If they are so concerned about this issue, why wasn’t it part of the deal they cut with the Liberals on the implementation of the GST and all the other associated tax changes? It was not there. If Senator Murray believes so strongly that this is an issue—and it is certainly an issue—why didn’t the Democrats deal with it then, when there was the supposedly fundamental overhaul of an allegedly ramshackle and broken tax system?

What we have here is nothing more than an attempt by the Democrats—the fading Democrats, I might say, largely as a consequence of the deal they signed up to on the GST—to get back in the tax debate. They have had their chance and, in my view, it has contributed to their demise. Now we have the struggling Democrats coming in here with ad hoc tax reform proposals. If there is going to be fundamental tax reform—in whatever shape it may take in the future—then knocking over and scrapping a government measure that is a positive attempt in a particular policy area before it has begun and substituting it in an ad hoc way with what may or may not be a useful measure is not the way to deal with issues. That is not the way tax reform should be approached. As I said, the Democrats had their chance. They signed up to the GST, they signed up to fundamental tax reform and now they are in here—and their numbers have been halved; there will only be four of them after 1 July—trying to get back in the tax debate game. Senator Murray, I am particularly harsh in my analysis of the attempts by your fading party to get back into this debate.

Senator McGauran —And cruel!

Senator SHERRY —I am only ever cruel to the National Party, Senator McGauran. I am always pleased when Senator McGauran comes into the chamber. I am looking forward to the Page think tank, as I believe it is called. The National Party have a think tank. That is a contradiction in terms! I am interested to see the release of the National Party’s Page think tank policy on tax reform. I really look forward to that, Senator McGauran. We all know—and I am going to be cruel to Senator McGauran and the National Party—that they are the doormats of the coalition. They just sign up to anything the Liberal Party offers up. They fight, they struggle, they scream, they protest—but the bottom line is that the doormats of the government sign up. Senator McGauran reflects that in his policy contributions. At the end of the day, they roll over. They are not in a coalition; they just do what the Liberal Party, who are increasingly dominant in the coalition, want.

It is a sad reflection on a once great party. I can think back to the days of McEwen and others. The National Party’s contribution in these vital areas of national interest, if there is any contribution, is squashed immediately by the Liberal Party. Senator McGauran himself should know that, every time a member of the National Party retires, they get replaced by a Liberal Party member in the House of Representatives, or a Labor Party member defeats a National Party sitting member.

Senator McGauran —Name one!

Senator SHERRY —Mr Anthony. I have named one, Senator McGauran. You cannot admit to yourself that you are a rapidly fading force caught in a vice with Labor on one side and the Liberal government on the other. This government is knocking over your members every time someone retires, and you make a few valiant policy proclamations from your fading seats in this and the other chamber. Get real! We look forward to a National Party tax policy. I would be surprised if we ever saw one. Senator McGauran has prompted me to be particularly cruel on the National Party, but I believe it is rightly deserved. The critique I have made of Senator Murray’s attempts to get back into the tax debate via these two amendments is also rightly deserved, so we will not be supporting them.