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Wednesday, 28 June 2000
Page: 18461


Mr BEAZLEY (Leader of the Opposition) (3:17 PM) —I move:

That this House censures the Prime Minister for:

(1) deceiving the Australian community on tax - most recently exposed in relation to the impact of the GST on petrol prices;

(2) imposing a tax system on the Australian community from next Saturday which will result in higher prices, less compensation and more complexity than he promised at the 1998 election, and whose adverse impacts will be felt in the days, weeks and months to come; and

(3) wasting the opportunity, because of his personal obsession with the introduction of an old-fashioned tax, to help build the knowledge nation Australia requires for the new century.

I think the last person to be ambushed by the GST prior to its implementation—and there will be many ambushes after this—was the price watchdog himself, Allan Fels. He was the last person to find himself in a situation of embarrassment prior to the introduction of the GST—the man who is supposed to implement the Commonwealth's price controls. He was asked to comment on the following by Laurie Oakes:

The likely result is an increase of 1.4c a litre, contrary to the ACCC's GST price guide, which predicted no rise in petrol prices.

Mr Fels said:

Well, we took the government commitment at face value.

He took the government commitment at face value. The Australian people, in the last election campaign, took the government commitment at face value. Indeed the Australian people, before the 1996 election, took the government commitment at face value. I think it is worthwhile us now reviewing that particular undertaking before the 1996 election which was, if you like, from a person who is a serial offender on deceit about this taxation arrangement. This is where the serial offence began. It was the first commitment of the crime as far as the goods and services tax is concerned. I go to those various statements that were made to the media and to the Australian people through the media during the lead-up to the 1996 election.

We know the infamous `never, ever' quote. But, like many things that are reiterated in public life, it enters into the lexicon of political discourse; it becomes a joke, it becomes deprived of its moral content and of an awful lot of its force. So many people have pointed out the Prime Minister's breach of his `never, ever' promise that we have lost the sense in which it was given—the fullness of it as a precedent for what has gone on in terms of the shrouding of this tax with lies ever since. These are his quotes of the time, taken from a press release dated 2 May 1995:

Suggestions in today's Australian that I have left open a possibility of a GST are completely wrong. A GST or anything resembling it is no longer coalition policy, nor will it be policy at any time in the future. It is completely off the political agenda in Australia.

Then we go to a doorstop on the same day:

Journalist: So you've left the door open for a GST now, haven't you?

Howard: No, there's no way that a GST will ever be part of our policy.

Journalist: Never ever?

Howard: Never ever. It's dead. It was killed by the voters at the last election.

Journalist: Were you misquoted in today's Australian newspaper, then?

Howard: Well, any suggestion that I left the door open is absolute nonsense. I didn't. I never will. The last election killed the GST. It's not part of our policy and it won't be part of our policy at any time in the future.

Then we went later on to Newcastle, a city that is truly beloved by me. The Prime Minister gave the electors of Newcastle on 11 December 1995 these responses when talking to a presenter:

Howard: Can I look you straight in the eye and say this, that if I state before an election that we're not going to do something and say it in concrete terms, I mean it. One of the worst things about politics in Australia at the moment is that the public doesn't believe what its political leaders say. Now I'm telling you . . .

Presenter: But you had the wrong bloke flogging it before. I mean, John Hewson wasn't good at selling it but—GST, I mean . . .

Howard: Mickey, it's not on the agenda, full stop.

Presenter: Would you like it to be?

Howard: No, it's not on the agenda, full stop. Just not there. Vamoose. Kaput.

Presenter: Well it would be political suicide, unfortunately. This is a little touchy. God, I wish I'd been the man to flog that . . .

Howard: I'm just telling you what is on the agenda, and what's not, and that's not. I say to the people of Australia, there will be no GST, that it is not on our agenda and I mean it. It's not, you know tiny...

Presenter: Cross your heart, type stuff?

Howard: Look, it's absolute (inaudible) and you know, you could bring me back here after the election when we've won and you can ask me again, you can ask me again in two years' time and you will find that I've kept my word on that.

Opposition members—Oh!


Mr BEAZLEY —I go back to the Prime Minister's earlier part of that particular quote:

Can I look you straight in the eye and say this, that if I state before an election that we're not going to do something and say it in concrete terms, I mean it.

What did he state before the last election in concrete terms to the Australian people? What did he state about the issue that triggered this debate, though it is a much broader debate than simply that about petrol? He said the following—and it was not as he tried to convey to Laurie Oakes the sort of odd misstep that occurs from time to time, the slip of a tongue when there is a debate going on; and occasionally from time to time it is true that politicians may well find themselves caught out and they are entitled to a bit of latitude on the subject when they get into that type of engagement—and this was a statement to the Australian people, a considered statement read from a script by the Prime Minister in his address to the nation on the tax plan:

For all businesses the cost of petrol will fall by about seven cents a litre.

And then:

The GST will not increase the price of petrol for the ordinary motorist.

He said that, and that proposition has been reiterated time and again by the spokesmen for the government ever since, one of the most recent times, of course, being by the Treasurer in November last year. He said this:

... when you equalise out the tax arrangements, you get the same amount of revenue anyway. The excise comes down and the 10 per cent goes back up. It is the same amount of tax. It just depends on whether you are taking it in a form of excise or whether you are taking it in the form of GST.

That beats the gobbledygook we heard from the Prime Minister in the answer to his last question, which was his cover for the fact that the GST is going to massively increase the price of petrol for the ordinary Australian at the bowser—and will do it from Saturday. He tries to hide behind this nonsense of some 90c a litre strike rate that he talks about. The simple fact of the matter is this: Australians will confront a price of petrol above 74c a litre around this nation on Saturday the 1st, and I would suggest that every single Australian will confront a price higher than 74c a litre. The government will be collecting more in tax from petrol than it collects now and the impact of the GST will ensure that. There has never been a proposition put before the Australian people so shrouded in deceit as this GST, so shrouded in deceit on the question of compensation, so shrouded in deceit on the question of its price effects and so shrouded in deceit on the question of its initial introduction—every single element of it shrouded in deceit. I ask: if something is good for the country, does it have to be introduced on the basis of deception? No, of course, it does not. The reward for this government, of course, has been a series of editorials today which have gone to point out the level of its deceit on this particular matter. The Daily Telegraph under `Price rises add to sense of betrayal' said:

No amount of sliding and dodging by the Federal Government will allow it to escape the abundantly plain fact that petrol prices will increase with the GST.

From the Sydney Morning Herald:

The argument over the cost of petrol can hardly be more confused and confusing. The motoring public feels cheated, with the prospect of a 1.4c or 1.5c a litre rise when the goods and services tax begins to apply on Saturday.

The West Australian:

It was he—

the Prime Minister, that is—

not the companies—who made what appears to have turned out to be an ill-advised political promise. And it is he—not the companies—who will be held accountable if the promise is not kept.

He will be held accountable for that. He will be held accountable by the Australian people. What we have seen from the government over the last few days is an effort at positioning this GST. A great erector of straw men is the Prime Minister, and the latest one he has erected is the notion that, somehow or other, the opposition has been in there claiming that the sky will fall in on Saturday the 1st. Like Chicken Little we are out there—though Chicken Little cooked, of course, will attract a GST; uncooked or cold it will not. `But the sky will cave in'—it is said by the opposition, according to the government, that this will occur on Saturday. Of course, we do not say that and never have.

This GST will be a slow burn, a slow accumulation and the feeling on the part of the Australian people and the government's new tax collectors—small business in particular—that they have been dudded. It will not occur, apart from now, to the surprise of us all, in this area of petrol on Saturday. It will occur as the first bill starts to come in for your insurance, for your bank fees, for your housing rent, for your electricity, for your gas and for the charges on services that you have been used to getting—and it will come from companies that have employed vast numbers of Australians, be it for your haircuts or whatever else it is you need at different points of time. And it will come in gradually as those who have sought in the first instance to take it on board decide ultimately not to absorb its cost. There will be a large number of Australian operations—services, shops—which will absorb the initial impact of the GST and gradually extend it. You can see it, for example, with the Canberra Raiders, for which I give them a tick on this subject. They are going to absorb, in the prices of their tickets, the GST for the next three games, but not for next season.


Mr Crean —Not the AFL.


Mr BEAZLEY —As the Deputy Leader of the Opposition reminds me, neither will the AFL. The GST is going to come in slowly over time, in event after event in the lives of ordinary people. It will come in against a background of price rises and disappointments over the compensation packages, and it will mostly affect not well-off Australians but ordinary Australians—I will say something about that later on. Ordinary Australians will gradually get a handle on the fact that what has been taken out of their pockets is greater than what has been put in.

The first to discover that will be the pensioners. I could not believe it today when the Prime Minister mocked the member for Lilley for pointing out that pensioners would find themselves short-changed by $10 in the first impact of the GST. For people of the wealth of the Prime Minister and his front bench, that is a bagatelle. But for people who count their lives in this community in cents rather than in $50 and $100 notes, it means everything. And from next March, the pensioners will see half of their increases get clawed back. Under the government's definitions, it appears that they are entitled to about eight months of bliss with this, and then it will be hauled back. I do not think that there is a single pensioner who will find a four per cent increase producing too much bliss around the place when they confront the sorts of price rises there will be under the GST.

Of course, everybody will confront the Christmas price rises. That is when you are going to see the genuine effect. Most Australians have been smart and have been buying up clothes. They have been buying up those goods which they know the GST will impact on immediately. But if they have kids, they know that their clothes last about 12 months before they outgrow them—12 months and that is it. Families understand that the GST is the family tax. Whenever you have a kid in Australia from this point on, you enter a new tax bracket. Your tax will go up as you pay for the nappies and as you pay GST on the baby carriage, because all the implements that were previously untaxed now carry a 10 per cent tag on them. As I said, this tax is a slowburn, and it will be a slowburn in the minds of the Australian people as they realise how massively they have been deceived.

And for what? The government's last defence, like the last refuge of any scoundrel, is bogus patriotism. They say to the Australian people, `Your family might be worse off. That is true. You might feel worse off. That may be true. You may object to now paying taxes on services. That may be true. But it is all for the good of the nation.' What in the government's figures actually demonstrates that fact? Have the Treasury's forward calculations on growth assumed that the economy is going to grow substantially or even marginally faster following the introduction of the GST? No. There are no figures from Treasury that demonstrate that. Let us take it a point further. There will be little impact on the macro economy, but what about on the micro economy? In the micro economy, in the lives of hundreds of thousands of businesses, the impact is going to be massive.

Not known by many people in this parliament or many people in the general public—apart from those who are in small business—is the conflict suffered by hundreds and thousands of small businesses in the community as they desperately try to get to grips with a tax which has baffled the Taxation Office. The government is paying a terrible price for the way it has treated the Public Service over the last four years. There are not enough properly trained public servants to implement this tax. That is simply a fact of the matter. Somebody was nasty enough to run a test across the Australian tax officials. I do not blame the officials for this, but the test showed that about one-third of them were not in a situation to answer effectively the questions being asked of them. About a third of the tax office is potentially giving misinformation to the people who phone them. On the logic of that, one in three phone calls are therefore likely to involve misinformation given to the collectors of that tax.

Is there any mercy for anyone in this business as far as this government is concerned? Is there any mercy for those in the housing industry who have been overrun by petrified people confronting the possibility of thousands of dollars of increases in the cost of building, of providing themselves with shelter? Is there any mercy for those people who have found themselves in a situation where they are overwhelmed with orders. I feel sympathy for the people that the Acting Treasurer wanted to dismiss: the people who have been accepting contracts to build houses and do renovations, people who have been overrun and will not manage to complete the orders by 1 July. It does not mean that they are crooks and laggards by being in that position; they are in a situation somewhat worse than the one they are normally in with the amount of demand upon them, and they have not made the cut. They have not made the cut, but the government has. The government is straight in for its cut as far as the ordinary Australian building or renovating a house at this moment is concerned.

I now come back to the theme of the GST being `good for the country', as opposed to being good for anyone else. There is a group of people that will find themselves in a better position after these tax changes. High income earners in this country will be better off. There is no question about that. What they pay out in GST, they will get back, plus more, in income tax cuts. But it needs to be understood that these tax cuts did not come from the GST, though they will have a material effect on shifting the balance between indirect taxes, regressive taxes, and direct taxes in this country. There will be that imbalance. But the payment for the tax cuts has not come from the GST; it has come from spending the surplus. The Treasurer admitted only a couple of months ago that it would have been impossible to deliver most of the tax cuts without implementing a GST, but the government was also prepared to spend the surplus.

They made a point about having to cut programs to pick up what they felt was an unacceptable deficit when they came into office. Every single cent of those cuts, and more, has been spent now on the tax arrangements associated with this GST package. And at whose expense? It will be at the expense of the universities of Australia, at the expense of the public schools of Australia, at the expense of the public hospitals of Australia, at the expense of the pensioner dental program for the pensioners of Australia and at the expense of business doing essential research and development for the new products that the new economy needs. Those are the people who are paying for the only section of the community that will personally feel any benefit from that. How is that massive deterioration of public investment in the critical areas of the new economy supposed to be good for the country? How can that be good for the country as it comes to slide in a 1960s French socialist tax? The modern economy of Australia, brought to you by the French Socialist Party—that is what we have. It is not good for the country and not good for the people, and the government deserves censure.


Mr DEPUTY SPEAKER (Mr Nehl)—Is the motion seconded?


Mr Crean —We were waiting for the Prime Minister to come and defend himself, but I second the motion and reserve my right to speak, and I invite the Prime Minister to come in here and defend himself.