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Tuesday, 24 March 1987
Page: 1409

Mr BRUMBY(6.13) —It is only a matter of months ago, as I recall, that I was in this House speaking on this legislation. It went from here to the Senate where it was rejected by the Opposition parties. The Australia Card debate is now back in the House of Representatives. I have no doubt that later this evening or tomorrow this legislation will again be overwhelmingly endorsed by members in this place and it will again be put to members of the Senate.

What we have heard tonight from the contribution of Opposition members is in every way and in every sense a desperate, last ditch effort to try to string together, to tack together, an Opposition, a coalition, which is rapidly disintegrating and falling apart. But particularly in terms of this legislation, what we have heard tonight is that same desperate effort to hold together the Liberal and National parties from the four senators who are likely to cross the floor in the Senate and undo this debate here today. Those opposite know that there are enormous pressures in the Liberal Party and in the National Party for their own senators to cross the floor and support this legislation in the Senate. Those opposite are being forced to reprimand them, bully them and hold them back into place so that they cannot vote the way their consciences would dictate.

I find it amusing to hear Opposition speaker after Opposition speaker rise and oppose the Australia Card. It is not just the overwhelming mass of ordinary people, the 65,000 electors in my electorate from all walks of live who strongly support this card; Liberal Party branches and National Party branches are writing to my electorate office supporting this card and seeking information about it.

Mr McGauran —Name them.

Mr Donald Cameron —Show us the letter.

Mr BRUMBY —I am not bluffing and I will show honourable members the letter. I will bring it in here.

Mr McGauran —You are misleading the House.

Mr BRUMBY —I am not bluffing; I am not misleading the House. That is why I find this debate amusing because I know-I was on the Joint Select Committee on an Australia Card-from my dealings with Opposition members the very difficult decision, I warrant, that the Opposition parties had to make about whether to support or oppose the Australia Card. But they decided to oppose the Australia Card. That is why I say that it will be passed today in this House. We will put it to the Senate again and we will test the strength and commitment of the Opposition parties about their position on the Australia Card. The previous speaker, the honourable member for North Sydney (Mr Spender), has been an outspoken critic of the Australia Card. He read to this House a list of opponents of the Australia Card. It was possible, during his 20-minute contribution, for him to read that list in a matter of minutes.

Mr Robert Brown —It was a complete list.

Mr BRUMBY —It was a complete list of everyone who opposes the Australia Card. I would not dare suggest tonight that I should read into the Hansard a list of all those people who support the Australia Card. I could not do it in 20 minutes, I could not do it in 40 minutes and I could not do it in days or weeks. I would need the support of all my colleagues here constantly reading lists of names into Hansard because millions of Australians support the Australia Card. They support the Australia Card because most Australians have eminently good sense and a sense of what is fair. They know that there is still avoidance unfortunately in the tax system in this country and they know that a small number of people continue to defraud the social security system. They do not want draconian, repressive measures, but they do want a fair go and they do want to ensure that a simple, cost-effective mechanism, administered by government is available to ensure that tax avoidance is reduced and that the people who genuinely need social security are the ones who obtain it. That is all we are saying with this Australia Card.

This debate has been going for the best part of two years. I know of no other government policy which has been so debated in political parties, in the community or in this Parliament. I challenge people to come up with pieces of legislation that have had more debate either in this House or in the Senate, or more discussion in party rooms or in committees. This legislation and this proposal have been well discussed. The Australian people have a good understanding of the arguments for and against this legislation and, as I say, they support it overwhelmingly.

I am reminded from the last speech I made in this place on the Australia Card that the estimated net benefits of this card-they are estimates which have been scrutinised by the Joint Select Committee, the Department of Finance, the Health Insurance Commission and so on-are around $870m a year. I just point out for Australians who at the moment would like a bigger tax cut than they are going to get on 1 July that that sort of saving enables this Government over the next 10 years to make tax cuts in the order of $5 per fortnight. I point that out because these are not insignificant savings that we are talking about in this legislation. I refer to the Joint Select Committee, which had representatives of the Australian Labor Party, the Liberal Party, the National Party and the Australian Democrats. It was a joint select committee-all parties were represented. I will quote from page 27 of the report written by all members of that Committee unanimously:

The ATO was of the view that no other single action could be taken that would produce revenue gains of the magnitude estimated as a result of the proposed Australia Card Program.

On page 29 of the report it is stated:

The Committee is unanimous in its view that tax evasion must be tackled as vigorously as possible.

. . . Overall, the Committee accepts the estimates made by the Australian Taxation Office and notes that they may be a substantial underestimation of final benefits obtainable under the proposal.

That paragraph was written by all eight members of that Committee. It was not written just by Labor Party members, but by Liberal Party, National Party and Democrat members. They say that the annual benefits of about $700m are a substantial underestimation of the net benefits that we are likely to see from the proposal. The Committee was conservative in its view. We did not want to be in a position of being accused, either in this place or in the public forum, of overstating figures. So there it is in the report; we have underestimated the figures.

Other claims have been made in this debate about fixing up the tax system. The Opposition has claimed that we do not need an Australia Card and that the problems are all in the Tax Office. It has referred to a report by the Standing Committee on Expenditure entitled `A Taxing Problem', saying that that proved that the Tax Office was sloppy in its administration and that, if it were fixed up, everything would be all right. Let me read out from page 28 of the Committee's report so we can see what it said about the Tax Office. It said that there had been tax leakage through the Taxation Office-primarily, I might say-during the Fraser Government years. It also stated:

This non-realisation of taxation revenues has arisen because of two fundamental problems within the information reporting system-

that is, of the Australian Taxation Office-

lack of information, and inadequate matching capabilities.

Opposition members come in here, quote it, and say gleefully: `Gee, that's got me off the hook; I have got away from the Australia Card debate. I have said that the problems are in the Tax Office. The problem, John Howard and Andrew Peacock, will all go away, and everything will be all right'. It will not be all right; we have to do some serious thinking. The report which the Opposition keeps quoting says that the problem in the Tax Office is due to the lack of information and inadequate matching capabilities. For goodness sake! The Opposition's own people on the Select Committee know very well that what the Australia Card will enable is far better information-that is what it is all about-and better matching capabilities. That is why the revenue gains in the Tax Office are so obvious. In our report, they were understated.

I turn now to the question of social security fraud. In our report, and in the Government's assessment, that will contribute only a modest proportion of the total savings in this program. In fact, the Committee was so careful with its assessment that it did not make any allowance for savings from social security. The Committee thought that there would be considerable savings, but it was not prepared to put a figure on them because it did not ever want to be in a position of saying that it was trying to hoodwink the Australian people or this Parliament. There will be some savings from the use of the Australia Card in the crack-down on social security fraud. The Department of Social Security said, when it appeared before our Committee, that it was not able to estimate the level of fraud due to false identities within the social security system. One does not have to be a genius with an IQ of more than 150 or thereabouts to know why it cannot identify all the false identities. The Committee said in its report:

While the Committee accepts the Department's difficulty in establishing the amount of social security fraud due to false identities, it believes that there is still significant fraud within this area. The Committee is concerned about the cases involving individuals with large numbers of false identities which come to light from time to time.

Also in the unanimous part of the report, the Committee said:

During the inquiry the Committee became aware of a number of unsourced estimates of social security fraud ranging between $200-$500 million per annum.

I make those points because the types of proposals which the Opposition is putting up to remedy the problem simply will not tackle the problem of mistaken identity. The Department is simply unable to estimate that. On the basis of the evidence put to our Committee from other sources we say, and we argue, that the potential benefit from the area is somewhat larger than we have allowed for. It is certainly a benefit which is there if the Australia Card is introduced. The Australia Card is essential-it needs repeating again and again-to rectify problems of mistaken identity.

I turn to the contribution of the honourable member for North Sydney and his combination of civil libertarian and economic arguments some moments ago against the Australia Card. I also refer to an article which appeared recently in the Age newspaper by Mr Ron Castan, who is the President of the Victorian Council for Civil Liberties. It has been Mr Castan and the honourable member for North Sydney who have spearheaded, in many ways, the campaign against the Australia Card. In the article, Mr Castan does not say a thing about civil liberties; he tries to tackle the economic debate. I hope that the Age gives the Minister for Health (Dr Blewett) a courtesy of responding to it, because it is a very erroneous article. Mr Castan said that one can discount on the Australia Card the $1,292m which was to have been saved by the Department of Immigration and Ethnic Affairs because it will no longer have access to the Australia Card Register. That claim is totally fallacious; it is simply wrong.

The savings in that area will come from people no longer able to claim illegally the unemployment benefit. Many illegal immigrants in Australia at the moment claim the unemployment benefit, having got through the system. They will not be able to do so when the Australia Card is introduced. The savings will also come from jobs which are being taken, wrongly, by illegal immigrants in Australia. The savings will come from other social security savings and from tax savings from illegal immigrants who are working and not paying tax. To say that, because the Department does not have computer access and, therefore, the savings do not exist, completely misundertands the basis on which the savings were calculated.

Mr Castan went on to cite a figure about the costs of the Australia Card. He picked a figure of over $1 billion a year over 10 years. Mr Castan has had to go back a long way to try to find that figure. That was a very early draft figure which has been modified many times. The accepted costing figure now by the Department, the Government and the Joint Select Committee is around $700m. So he is about $300m out there. Mr Castan went on to talk about the Taxation Office. He said:

The Taxation Office is left as the only area in which savings are claimed and which, on the Government's own figures, might conceivably yield a worthwhile net benefit.

I think that I have covered the tax savings area pretty well. The Government, the Tax Office, a number of business organisations and the Joint Select Committee have said that the tax savings of around $800m-plus a year are conservative in the extreme. In fact, officers from the Tax Office said that that figure could well be half of what the figure is in reality. However, we were not prepared to say that because we wanted to produce a watertight, conservative document. That is what we have done. We are looking at $800m a year. Mr Castan's only comment is that it might conceivably yield a worthwhile net benefit. Goodness gracious, there are many people in a community who could do with a tax cut of $5 a week; there are many people who could do with a pension increase; and there are many people who are not on Mr Castan's income who appreciate the value of $833m per annum at a time when this Government is looking for money to reduce its expenditure because we have had a collapse in our terms of trade.

The last point I want to make is to reject, again, another of the many erroneous claims made by the honourable member for North Sydney. He claimed in his opening remarks that the Australia Card lacked support; in fact, it was actively opposed by business organisations in Australia. He went so far as to say that the Council of Small Business Organisations of Australia opposed the Australia Card. COSBOA has twice indicated its support in principle for the Australia Card and it has done so as recently as this month. More importantly, on 9 March the Business Council of Australia announced that it supports the introduction of the Australia card. It is not as if there is a whole plethora of business organisations out there in electorates opposing the Australia Card. The Business Council of Australia supports the Card. COSBOA wrote to us as recently as March and indicated that it maintained its support in principle for the Card.

Sitting suspended from 6.30 to 8 p.m.