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Tuesday, 17 February 1987
Page: 171

Mr TUCKEY(5.35) —The Commonwealth Guarantees (Charges) Bill-and the cognate Bill, the Australian Industry Development Corporation Amendment Bill, which is necessary only because of the change to this legislation-is another tax gathering measure. It happens to be the latest phenomenon. In his second reading speech, the then Minister for Immigration and Ethnic Affairs (Mr Hurford) stated:

Similar loan guarantee charges have recently been announced by the New South Wales and South Australian Governments . . .

We also know that it is the case in Victoria. We have the phenomenon that government entities have to make a profit and have to meet the market. That sounds fine in rhetoric but it totally overlooks the fact that these particular institutions make that profit only when they put up their prices. Who pays those prices?

Today we heard our Treasurer (Mr Keating) crying crocodile tears about the fate of the less well off in our community. I am sure that we all concern ourselves with those people. It is a pity that the Treasurer did not get his tax return in a little earlier, to help with the efficiency of the Australian Taxation Office, if he is so concerned about these things.

The reality is that, according to the second reading speech, this Bill will take an extra $3.4m from the Australian people, because, quite obviously, the institutions involved, which are to be taxed in this fashion, will pass on the charges. They have no choice. It is an interesting line-up of institutions. Part A of the Schedule lists Aussat Pty Ltd, which offers the alternative form of communication for many people today. We should remember that every time we go into many places to buy things there are electronic funds point of sale systems, involving credit cards, which now use the communications system. Many of the larger chains will choose to use Aussat. The Australian Telecommunications Commission is also listed. As the pressure goes on those two organisations to raise money to cover the new data transfer processes that are necessary, a tax will now be put on them if they require the Treasurer to give them a government guarantee.

Of course, we already have plenty of taxes in that area. Already, the State governments tax the turnovers of their electricity authorities to the order of between 3 and 5 per cent. That is taxation by stealth-and this is taxation by stealth. It appears to be a relatively small amount of money. I guess some calculations have been made on it. The amount is 0.5 per cent. If the Australian Telecommunications Commission, Telecom Australia, is to be taxed at that rate on all its borrowings, the amount will have to be more than that. Maybe it will not seek a guarantee; maybe it will pay the higher interest rates that the market demands. But I see that in 1985-86 Telecom's new borrowings were $640m. Its total borrowings, which includes roll-over of old debt, were $934m. In 1986-87 the figures were approximately $640m and $1,033m in total borrowings. Neither the second reading speech nor the Bill is very specific about roll-over, but I gather that that is a borrowing and that as such it will be subject to this form of taxation. If the Government gets 0.5 per cent on $1,000m in one year, that represents a lot more than $3.4m. Maybe the Minister will enlighten us in that regard as to the extent to which Telecom seeks government guarantees for its borrowing program.

The Australian Capital Territory Electricity Authority is also in the list. We presume that it will borrow to meet its commitments of expansion in this new and developing area, in this very speedily developing city. Is it not wonderful? I soon worked out the Canberra property market: One buys under a Liberal government and sells under a Labor government, because prices have risen at a huge rate under this Labor Government. That is one of the major points about this legislation and in the speeches we have heard from Government members on this issue.

All of the institutions involved provide services to the community. They seem totally incapable of reducing their costs internally. When governments say to them `Make a profit', it is seldom done by efficiencies internally; it is done by putting up prices.

The Australian Postal Commission-Australia Post-is included on the list too. The Australian National Railways Commission, which is showing massive losses, is also included. How can it pay the charge from profits? Even the Commonwealth Serum Laboratories Commission, which provides necessary drugs to Australians, is included, and will now be taxed. The Housing Loans Insurance Corporation, which is obliged to raise money to cover itself from time to time in giving insurance to that very important person in the community, the home owner, is included. The Housing Loans Insurance Corporation is the body which allows young home owners to get a second mortgage. It will be hit by the tax. Qantas Airways Ltd, our international carrier, will have its competitive situation somewhat damaged by this arrangement. I could go on. There is a huge list. Some bodies are to be treated differently, namely, the Commonwealth Development Bank of Australia, the Commonwealth Savings Bank of Australia and the Australian Industry Development Corporation.

Let me come back to the basic premises of this legislation: More taxation, more revenue. During Question Time today the Treasurer talked about the constraints which have been placed on the Government and the difficult times it has had. It entered office in one of the few periods of sustained economic growth throughout the world-growth which is now starting to stagger. It had the benefit of that period of growth. Yet how is that reflected in the Government's revenues? The only Budget inherited by this Government was the last Fraser Budget. This Government had three months of management of that Budget before it commenced its own Budget management in June 1983. It inherited only one Budget.

Mr Hand —What about the damage you had done?

Mr TUCKEY —The honourable member should listen to this. He might like to tell the poor people of his electorate--

Mr Hand —You wrecked the economy.

Mr TUCKEY —That is not the case. Let us look at the Government's revenue raisings. This Bill is a Bill for revenue raising. The Hawke Government's revenue raising since the last Fraser Budget-in the last Fraser Budget we raised $44,000m-as suggested in the present Budget estimates for this year is $71,261m, representing an increase of 61 per cent. Honourable members opposite cannot say that that is evidence of the growth rate of Australia. The Government has increased its revenues by 61 per cent and has needed an additional $24,000m of borrowing to balance the books. It has pushed the cost of interest to the Commonwealth from $3,300m in its inherited Budget to $7,500m in this Budget.

The massive effort of the Government to borrow money in the community is forcing Australian business to pay 18 per cent and 20 per cent for its money when comparable people in Japan are paying 5 per cent and in America about 8 per cent. Honourable members opposite may think things are getting tough for the small business sector and wonder about the figures that were mentioned today-8,000 bankruptcies have occurred in recent times. The honourable member for Charlton (Mr Robert Brown) has suddenly stopped making speeches about bankruptcy.

Mr Hand —Me?

Mr TUCKEY —No. The honourable member for Charlton. He used to make all sorts of speeches about bankruptcy.

Mr Hand —It has never been better in Victoria. The bankruptcies are in Queensland, and you know it-under that administration up there.

Mr DEPUTY SPEAKER (Mr Cowan) — Order! I do not think the honourable member for O'Connor needs the assistance of the honourable member for Melbourne.

Mr TUCKEY —The honourable member will get named in a minute and he will deserve it. He should be quiet. A machinery dealer in my electorate was contacted by his finance company the other day and told that his floor plan interest charge, the charge on the stock which he carries in his premises for sale, has jumped to 32 per cent.

Mr Uren —What is he dealing with?

Mr TUCKEY —He is dealing with a well known finance company. I presume that the others will follow. The charge is now 32 per cent. Honourable members should take my word for it. It is a disgrace.

Mr Uren —One of your constituents?

Mr TUCKEY —One of my constituents, who rang me the other day.

Mr Uren —You represent the finance companies, do you?

Mr TUCKEY —No; I am telling honourable members what the finance company is charging him. A lot of the reason for it lies with this Government because of its borrowing program of $24,000m over four years which it has needed because it has lacked the courage either to cut expenditure or to increase taxation. The Government should not tell us about its economic concern and caution. It has borrowed $24,000m in four years. In old fashioned prices it would take the wheat farmers of Australia six years to produce that much revenue. The Government has had a debt-led recovery. It has also massively increased government revenues. Let me repeat it: Revenue has gone from $44,000m in the last Fraser Budget to $71,000m in this Budget-an increase of 61 per cent.

This Bill is just another revenue grab. It is being practised by State Labor governments in exactly the same way. Fancy this Government saying that it would create revenue by making these firms pay a dividend on capital outlay! The dividend is a direct tax against the community. We now see all those activities reflected in an inflation rate that is unheard of around the world today. I like to hear the history lessons of honourable members opposite about past governments. When we, as a government, had high interest rates they were common around the world. When we had high inflation rates they were common around the world. This time it is only we and the banana republics. It is only we and Mexico that owe the world $100,000m-up from $35,000m when the Fraser Government left office. These are the sorts of figures Australians have to understand.

I will tell honourable members what an Australian has just discovered. When Fraser left office one could buy a Holden Commodore for $10,500. I priced the same vehicle the other day. It now costs $16,500. And the Government wonders why the car industry has had the lowest level of sales since 1968. After four years, let the Government tell me how it can blame anyone else for that. Whom does it want to blame for that?

Mr Price —They are exporting them now.

Mr TUCKEY —There must not be many cars being bought in Australia if they are exporting them. The car industry has had the lowest level of car sales since 1968.

Mr Hand —Tell us what happened under Fraser.

Mr DEPUTY SPEAKER —Order! The honourable member for O'Connor will resume his seat. I have repeatedly asked the honourable member for Melbourne to cease interjecting. It might be as well if he were to leave the chamber if he intends to continue.

Mr Hand —Mr Deputy Speaker, I take a point of order. I will adhere to your request, Mr Deputy Speaker; but at the same time I ask for the Chair's protection from the abuse coming across from the current speaker.

Mr DEPUTY SPEAKER —Order! There is no point of order.

Mr TUCKEY —Mr Deputy Speaker, I have been addressing the Government. We know that the ambitions of the honourable member for Melbourne (Mr Hand) to be a Minister and to be more involved in increasing government expenditure have just failed. He is now of such minority interest in this Parliament that he could not even win a vote. He was put out; he was cast aside. He is now an irrelevance in the Federal Parliament, and that is mainly because he lost his way. He led to that and he knows it. He thought he could do deals and he got caught out. Now the rug has been pulled right out from under him.

Mr Hand —That is utter tripe, and you know it.

Mr TUCKEY —The honourable member should tell me why he missed out. He is still on the back bench.

Mr Hand —Mr Deputy Speaker, I take a point of order. The only two people I know who have been taking points of order and conniving of late are the former Leader of the Liberal Party, the honourable member for Kooyong, and the honourable member for O'Connor, as they wandered around behind trees in the electorate of O'Connor. They are the only two who have been conniving to overthrow anybody. They have been conniving to overthrow the present Leader of the Liberal Party, the honourable member for Bennelong-not anybody on this side.

Mr DEPUTY SPEAKER —Order! There is no point of order. The honourable member for Melbourne will resume his seat.

Mr TUCKEY —That was a frivolous point of order. Thank you, Mr Deputy Speaker. Returning to this legislation, I have claimed again and again that it is a tax measure and that it will hurt small Australians in many areas. We have heard some amazing defences of government institutions this afternoon. One government institution mentioned in this legislation is the Commonwealth Development Bank. This Government made a big play amongst small business as to how, by expanding the role of this institution, it would help farmers and small business. I believed it at the time. I saw the bank in my electorate promote a new scheme to help farmers. It was going to buy up their hire purchase debts and put them on long term finance, which appeared to be an excellent proposition at the time, particularly as when it was able to make the offer interest rates were at 14.5 per cent and the Treasurer was predicting that they would go down.

Huge numbers of farmers in my electorate, in great financial difficulty, went to the bank to apply for that money. The rejection rate was 90 per cent. The bank was not interested in those who were hard up. It was interested only in those who were not hard up. It was interested, as a competing organisation under government guarantee, in pinching the good customers the other financial institutions had at the time. So the poor were left where they were. The joke is that the poor have become the winners because, of course, the new deal was a flexible interest rate whereas the deal with the financial companies was fixed interest. The Treasurer's promise was not kept, interest rates have gone through the roof and some of those people who got what appeared to be an excellent proposition have suffered. They have suffered because of the Government's high interest rate policy, unique outside of the banana republics, which it created by excessive borrowing at the government level and which has put it on a merry-go-round it cannot get off.

Let me again remind honourable members of the damage that has done to people who made investments believing the Treasurer, believing that whether they received loans from the Commonwealth Development Bank, the Primary Industry Bank of Australia or the AIDC-which gets a mention here-their interest rates would not increase. That is the major problem in farming and small business today. People believed the Government and believed that they were in a safe interest rate environment. They borrowed money and that borrowing is contributing substantially to the thousands of bankruptcies that are occurring at the moment and the plight of the thousands of other people who are losing their businesses without getting to that particular situation.

These particular institutions do not deliver much in the way of help. They are government institutions competing with institutions of which, as has already been said, we have literally hundreds. We are not short of banks or merchant banks. We do not need those government institutions. In respect of these particular institutions, the Opposition's policy is not, as the honourable member for Calwell (Dr Theophanous) said, to disband them or to put a torch to them. They will be disposed of and the arrangements they have, the loans they have made, will be transferred to people who will deal just as fairly and at the same prices. For a change we will not have a government trying to pick winners.

We listened to the honourable member for Calwell saying that it all has to be invested in the manufacturing sector. Not only is that picking winners but the honourable member for Calwell might also ask himself why the manufacturing sector is not attracting investment from the private sector today. I have talked to those investors and the answer is quite simple. Those investors will tell us why all the money is flooding into a share market where $1 chases another in an ever rising spiral, as it did before the Great Depression. Those investors will tell us why they are in there-because there are no hassles. They can run a very successful organisation with half a dozen dedicated people who are not subject to the control of the trade union bureaucracy. Those people ask why they should invest $50m, $100m or $500m in some new manufacturing process and have some shop steward tell them when they can open their doors. Honourable members opposite have forgotten that their masters are the members of the trade union bureaucracy-they should get this into their minds-and not trade unionists, who are generally very good people. Honourable members opposite talk about the white-shoe brigade. What about the white fingernail brigade? They are the people who run the trade unions today. When did Simon Crean ever get out there and do a day's work? When did most honourable members opposite, who call themselves representatives of the working people, who do not know, who do not understand and who are being dictated to by people who are not even democratically elected, do a day's work? They should get into their minds that it is the trade union bureaucracy, the white fingernail brigade, which is damaging our society.

I talked to Ralph Sarich not so long ago and he told me the reason he is not manufacturing his invention. We see all these programs on television on why all these inventions drift overseas. He went through it step by step and at every level he could make a viable operation until he got to the Australian waterfront. The unreliability of that sector destroyed the financial viability of giving jobs to Australians. For Sarich there was no problem. He sold licences, but he is deeply disappointed as he is a great Australian who wanted to manufacture those products in Australia. He got right through to that point but because of the cost of maintaining stocks in overseas countries and putting up with never knowing when things would get out of Australia-for that reason alone-he decided to sell licences. That is the only revenue that will come to our country. The investor gets his money; the worker does not. The Government is not fixing that up because it is dictated to by those people.

Mr DEPUTY SPEAKER —Order! The honourable member's time has expired.