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Thursday, 23 September 1999
Page: 10425

Mr TUCKEY (Forestry and Conservation; Minister Assisting the Prime Minister) (4:55 PM) —I will comment first on the claims of the member for Braddon that nobody shouted out that there was something wrong with the legislation. I happen to have a list of the speakers to the legislation at the time. The names given to me—and you will excuse me, they are not in their electorates—are Crean, Kernot, Fitzgibbon, O'Connor, Thomson and Horne. I have checked their speeches. None of them said there was a mistake here, either. None of them stood up and said, `Hey, we are for the timber workers. Why are you having a shot at them with this particular matter?' When it came to shouting out and protecting the timber industry in this issue, there was a great deal of silence on both sides of the House. So we do not want to get too moralistic or hypocritical when it comes to—

Government member —What, not a word from them?

Mr TUCKEY —Not a word from all those speakers. On 23 June, they all were listed as speaking. They never raised the issue. The government of course rejects the opposition's pious amendment but welcomes its support for the Taxation Laws Amendment Bill (No. 9) 1999 . Nevertheless, in terms of the opposition's attack on me in that amendment, let me apologise to the timber industry for my lack of diligence in not noticing this mistake before the bill was introduced. But let me reiterate: this situation was not a breach of the ANTS tax arrangement. The agreement with the Democrats was that all primary entities that benefited from the current diesel rebate system would retain that right to the same extent. The forestry industry currently has the benefit of the full diesel rebate for off-highway activity. The mistake was based on an assumption that somebody had that that privilege was not extended to the forestry industry. I do not know who that person was. And maybe it was a belief held by the Democrats. But all that was agreed at the time was that when these matters were corrected under the new arrangements those in receipt of the full rebate retained the full rebate. That of course included the off-highway activities of the forest industry.

As a consequence, the government is rectifying its mistake. I find this quite remarkable. It seems that a lot of the people thought it was our responsibility to keep a promise that was applying a higher tax to the industry when in fact it would seem that we would be much better off reducing the tax. That stands in stark contrast with circumstances I well remember in 1993, when the present opposition, then in government, went to the people with a promise of tax reduction called the l-a-w tax cuts and as soon as they were re-elected threw them out. At the same time, having said that there would be no increase in indirect taxes, they added two per cent to every rate of sales tax and 6c a litre to the diesel tax on every truckload of logs and every railway trainload of logs—for instance, in Tasmania—that went along, outside of the forest industry. When one gets down to the issue of what promises one keeps, one should be reminded of those circumstances.

This was a mistake made by someone who had a misconception of the arrangements available presently to the forest industry. As such, they are now being rectified. That is an example of good government. We are fortunate inasmuch as these provisions do not go into effect until next year and therefore there has been no loss to the industry. They are very supportive of the fact that, once the issue became apparent, the government responded positively.

I also want to respond to a couple of other remarks that were made. The member for McMillan clearly does not understand what went on at CSIRO. He should also know, if he had been here a bit longer and bothered to study the forms of this place, that I am not the minister responsible for that.

Mr Laurie Ferguson —He did not say you were.

Mr TUCKEY —Yes, he did. He said I should ring up the CSIRO. I checked. The member for Reid ought to know you cannot rewrite history in this place. It is all on the record.

What I am saying is this: the people whom he has mentioned were all employed, to the best of my knowledge, under a CRC, a cooperative research corporation, which this government introduced as a measure to encourage industry to participate with the research organisations, to get together to put together partially industry funded arrangements for research. It is not totally prescriptive, but one of the conditions is that it is a one-off grant, and in that period of time industry support is supposed to increase for that purpose. In the circumstance it did not. The government has outlaid, again to the best of my knowledge, the same sum of money this year and in so doing has funded a lot of new projects.

Why was there a lack of industry funding? The reality was that the industry was in dispute as to the application of the levy and some were not wanting to pay it. My response to that quite some time ago was to get all the industry people together in a room, remind them of the fact that in these matters the government is only a facilitator, not the originator of all these ideas, and encourage them to come up with a proposal that would be satisfactory to them so that they could be out there spending money on research and, of course, creating employment for researchers such as those who have lost their positions at CSIRO. That meeting was extremely successful, and in fact the industry agreed with us on that day to a new set of levy arrangements—being progressed at the moment—that hopefully will deliver a very substantial amount of money into research, which I would agree is most important to the future of the industry.

The point on which all opposition speakers were silent was what they are going to do about security. I have discovered today that our deficit in forest products, which we constantly quote at $1.5 billion, has risen to nearly $2 billion. Of course, that is a deficit in value added products. To value add our timbers above the level to which they tend to be exported or sold locally today, you can start bidding at $100 million and you can go up into the billions of dollars. Nobody is going to spend that money until this parliament and certain state parliaments act. The member for Braddon knows very well that his state is already there, having bipartisan support and having passed RFA legislation, waiting to benefit and be the frontrunner in this sort of investment flow, the minute this parliament passes regional forest legislation that the industry trusts and that the unions trust—and that is not legislation with the amendments that the opposition has proposed. That is another point that I would make.

It is a pity to give me a lecture when I am here supporting legislation and proposing legislation to reduce the tax on the timber industry. We are doing the right thing. We made a mistake. We are not hiding from it—

Mr Laurie Ferguson —You are trying to.

Mr TUCKEY —No, I have never hidden from it. I said to the people straightaway that, through a misunderstanding of how the tax applied to a certain part of the industry, we allowed legislation to pass this House that was incorrect. Our response is not to tough it out; our response is to come in here and say, `We will fix it.'

I must also respond to the member for Paterson. There is no completed RFA in existence in the New South Wales parliament or here in Canberra, as he suggested, on my desk. What has happened is that we have returned to the appropriate National Forest Policy Statement procedures set out by the Labor Party in 1992, and we are going through that process in the north-east and the lower north-east of New South Wales. The interesting thing is that we are just doing things like consulting the people with a proper, advertised process. We are doing those things so that there can be a properly negotiated arrangement, and the progress is being made. What is more, when it is signed, if the member for Paterson can convince his caucus to pass the Regional Forest Agreements Bill 1998 without amendments of the nature that they have proposed, then the security he demands for the local workers will be on the way. Those are the sorts of points we need to make.

I do not want to take any more of the House's time. I point out, firstly, that this was the appropriate measure for the government. Secondly, when it comes to breaking promises on taxes, you do not look to this side of the House with the Liberals and the National Party in office, you look to the other side. The only promise we are breaking is in order to make something better, but we have not changed the promise at all. The promise and the understanding were very clear, except that somebody at some point in drafting, I assume, believed that there were different arrangements in place for the forestry industry.

Mr Laurie Ferguson —There weren't.

Mr TUCKEY —We know that there weren't. We agree with you wholeheartedly. The fact of life is that someone thought there were, and for that reason we got some legislation wrong. I apologise to the timber industry for my lack of diligence in not picking it up, but we have fixed it before it did any harm. I thank the House and those who participated in the debate.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.