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Wednesday, 1 June 2005
Page: 220


Mr RANDALL (6:02 PM) —I am delighted to rise in the cognate debate on the Appropriation Bill (No. 1) 2005-2006, because I am a proud member of a government that has done more for the Australian people in the last nine years than the previous Labor government did in 13 years. How do I know that? I know that because wages under this government, in real terms, have grown by 14.7 per cent, but under Labor in 13 years they grew by only 2.1 per cent. So who has done more for the Australian taxpayers? The Howard government, because it is delivering in so many respects.

You only have to look at these milestones: the lowest unemployment level in nearly 30 years; record low interest rates on home loans; low inflation; and high investment. This country is booming, but countries do not boom by themselves—just look at New Zealand. Today New Zealand announced that it is concerned about its growth and the downgrades in the forecasts. Yet Australia is booming, because it is being managed well by a strong and capable government led by Prime Minister John Howard and a good team in the Treasurer and the executive. I will also add that members of the government make a solid contribution. I often look across the chamber and wonder to myself how long the Labor Party, as the commentators say, can continue to thrive on dead wood. However, I should not really go into that.

This budget was a post-election budget, but what did it do? It gave tax cuts at both ends of the spectrum: it gave tax cuts to compensate for bracket creep in the higher brackets, and it gave tax cuts at the lower end of the spectrum. When I was first elected as the member for Canning, I said I would make it my business to make sure that the so-called working poor got to keep more of their money. Here is a genuine, gilt-edged case of those who are working being able to keep more of their money.

This is important to those who work at both ends of the spectrum but, because of the relativity of their wages, it is particularly important to those at the lower end. If they get to keep more of the money that they earn, the working poor, as they are called, are better off and as a result their families are better off. That is why, combined with low unemployment so that more people have a job and with low interest rates and low taxation, Australia has never been better off since the glory days of the sixties.

I could go into so many aspects of this great budget which my electorate of Canning has received warmly. I know the Australian people have received it warmly. The only people who have not received it warmly are those opposite, and that is because the budget is too good. They cannot match it. They complain and they talk about $12 tax cuts, yet Mr Beazley knows that when he was in the previous government, led by his great mentor Mr Keating, they promised things such as tax cuts in law which were never delivered. So the Australian people just do not trust them.


Mr Slipper —L-a-w tax cuts.


The DEPUTY SPEAKER (Mr Baldwin)—Order! The member will be heard in silence.


Mr RANDALL —They just do not trust the Labor Party on economic issues. It was very clear in my electorate as I went around doorknocking before the last election that people were very concerned about what would happen should Labor ever regain the Treasury bench in this country because they know that Labor do not keep their word. Not only do we keep our word but we actually build on it as a government. Clearly, we are a government to be trusted, and that is why the people endorsed us in droves. Dare I say it about myself and others of us whom we may wish to mention, our margins went from very low margins to much greater margins because the people believed that we were in a government that would do more for them.

One of the aspects of the budget which was heartening to see was the fact that AusLink was again in the forward estimates. The funding will now flow to the states, although only if they sign the bilateral agreement on the construction code and the road funding code. This code, as we know, has currently been taken up by Victoria. South Australia is in the loop, and I am told that Mr Beattie and Mr Carr are heading that way. In Western Australia I think we are nearly there, because they only have until the end of the month to do it. Dr Gallop has been a bit hairy chested since he won the election in February and he thinks that he can take until the last moment, but I have inside information that they are about to sign. It is cute, really, isn’t it, because they are about to sign the code which, again, takes contracts on these roads in the AusLink program out of the hands of the union thugs and places them back in the hands of productive small businesses, contractors who want to get on and employ people and local people who want work. So, at the end of the day, Western Australia will sign before the end of the month.

In a very surprising development, I have been able to glean something from the Western Australian state government budget papers about one of the main projects that I have been pushing for ever since I have been the member for Canning, the Mandurah bypass. This is the extension of the Kwinana Freeway and the building of the Mandurah bypass, essential infrastructure—and there is much talk about infrastructure—for the south-west and for the Peel region.

In the lead-up to the last election the state government were continually asking the federal government to cofund this. ‘We want 50 per cent,’ they kept saying. They originally asked for $150 million, and that was committed through AusLink. The then minister for roads, Senator Ian Campbell, was happy to announce that in the Peel region in Mandurah. With much fanfare, my opposition opponents on a number of occasions turned up with the then transport shadow spokesman, Mr Martin Ferguson—not Mr Laurie Ferguson—


The DEPUTY SPEAKER —The member will refer to members by their title.


Mr RANDALL —I refer to the member for Batman, not the member for Reid. My opponents announced that they would match that funding if they were elected. Then the state government got a bit cute and said, ‘Look, it is $170 million now, and we want an extra $20 million.’ So the Prime Minister announced in Perth, with many present, that we would contribute the extra $20 million to build the Mandurah bypass. But he did put a condition on that extra $20 million, which was that construction would begin in 2006.

He did that because, like me and the rest of the people in the region, he is suspicious about the state government not getting on with the job. We are suspicious because Alannah MacTiernan, the transport minister in Western Australia, is building a railway from Mandurah to Perth. We applaud her for doing that because it was an initiative of the coalition under the previous Court government. However, she changed the route and has done a number of other things that have now seen the cost of the project blow out from $900 million to $1.5 billion. What does that tell you about her ability to fund something like the Mandurah bypass? It makes it difficult, obviously, because the moneys that should be going into road infrastructure are being sucked into this rail infrastructure. I would like to put on the record that the $1.5 billion being used to build this 100 kilometres of railway is more than the cost of building the Alice Springs to Darwin railway—I think that was $1.25 billion and this is $1.5 billion. You could call it the gold-plated Mandurah railway line. You can see that its cost is absolutely blowing out and as a result they are having trouble funding it.

So the condition is that they start in 2006. However, I have been made aware that before signing the bilateral agreement the state government have put a few conditions on it. They want to commit to ‘50 per cent funding’ as the wording when they sign the bilateral agreement. Naturally they want to do that. Why? Because if it blows out and blows out and they do not build it until something like 2012, it will cost much more. If that is the case, it will cost much more well into the future, and if the federal government agrees to pay 50 per cent it will be paying much more than it expects to. My understanding is that the project has already been assessed by main roads and, while it is over $340 million already, it is going to cost an extra $100 million—so it will be $440 million. Of course they want to set funding at 50 per cent rather than having a set figure.

But in the state budget the state government so far have only allocated $4 million—$3.3 million spent to 30 June 2004. The state government have allocated $82 million towards this project over the period from 2004-05 to 2008-09. Just understand this: if they have only allocated $82 million for that period which finishes in their forward estimates in 2009, they are only half funding it to 2009, given the fact that they have to start by 2006 to get the extra $20 million of federal government moneys. So they are not serious. If they were serious they would be allocating the whole lot. They have a sign on the end of the freeway saying construction will begin in 2007—not 2006 by the way—and yet they are only half funding it. Do they want to build half the freeway or the bypass or are they just putting it there so that they do not have to really start work until 2008-09, which is the time that Alannah MacTiernan has been talking about?

What is even worse is that the second tranche of funding of $82 million, which takes the total to $167 million, does not mature until the period 2009-10 to 2010-11. So that is the real time that these people want to build this road: in 2010 or 2011. I am going to expose them through their own budget papers in the local media and the Western Australian media. I am going to show that the state government are not serious about building the Mandurah bypass, because their own figures show that they are not funding it completely until 2011.


Mr Laurie Ferguson —Ooh!


Mr RANDALL —The member for Reid has just shown his concern about this. He knows you have to keep a promise. If you promise something like that, you have to deliver on it. We are a government that deliver on our promises, unlike those opposite.


Ms Bird —I am seeking to intervene


The DEPUTY SPEAKER (Mr Baldwin)—Is the member for Canning willing to allow the intervention?


Mr RANDALL —No, because I have a lot to say. One of the other elements of the lack of state government funding on this is that the state government say that they have not had a decent response from the federal government. I have said this in this place a number of times, and I will do it again—just very briefly, because I want to move on to something else. Minister Alannah MacTiernan says that we have been tardy in responding to her requests for funding for this essential piece of infrastructure—the Mandurah bypass. Yet I have a letter sent from John Anderson, our Deputy Prime Minister, to Alannah MacTiernan, dated 13 February 2002, where he says in essence that the Peel deviation should be determined and there should be decent planning and infrastructure. His letter says:

Further planning and design activities you propose for the Peel Deviation should provide necessary evidence for the Commonwealth in determining whether this project should be declared a RONI or not. In particular, detailed planning of these sorts of proposals allow the Commonwealth to prioritise projects with the largest benefit to the nation and provide an appropriate level of certainty in cost estimates for the Commonwealth to be confident of requiring funding levels.

When he wrote that we were still on RONIs, so of course he could not respond under the Roads of National Importance program, because she did not reply until 29 June 2003, some 16 months later. So who is tardy in responding? A letter to me from John Anderson 16 months later says:

I note your desire for funding for the Peel Deviation West Australian freeway. The West Australian freeway is not a Road of National Importance now because obviously that program has finished and it is a state responsibility. To date, the Western Australian government has not responded to my previous requests for a detailed project proposal and has not allocated any funds for this project.

I rest my case. They have not even done the preliminary work. They took 16 months to respond. Is it any wonder that the project changed from Roads of National Importance to AusLink?

The state government have had record income through taxes and royalties. Their budget a few weeks ago showed how well-off they are. Yet the people of Western Australia cannot get this decent piece of infrastructure. As we know, if you can take their word for it, their half share is $170 million, yet their estimated bonus GST payment this year was over $200 million. They can get on and build it, and that is what I urge them to do.

Taxation is always an important issue to do with budgets, collecting moneys et cetera, but I am always very concerned when the tax office oversteps the mark, and it has overstepped the mark again. People in this House will know that I have been concerned about the way the tax office has treated people involved in schemes that it gave private and public rulings for. We went through the mass-marketed schemes exercise, and there are still people bleeding from that. They lost their houses, their families broke up and some even committed suicide. We have just recently gone through the latest exercise—where the tax office has retrospectively applied rulings to employee benefits arrangements. It is the same story—people’s lives have been destroyed, because they have been retrospectively visited with EBAs. Currently, the taxation office is looking at being retrospective over a 20-year period. It is looking at service trusts established in 1983. There are companies that established service trusts in 1983 that are now under scrutiny from the tax office.

Last week, Mr Mark Konza, the Deputy Commissioner, Small Business, at the ATO, and Mr Michael D’Ascenzo, the Second Commissioner of Taxation and Chief Tax Counsel, visited us. When we asked these two gentlemen how they could start visiting operations such as service trusts that have been established for more than 20 years, they said, ‘Look, some of them are out of hand.’ If that is true, we do not want anyone to be rorting, but at the end of the day there is no ruling. They admitted themselves that the Tax Commissioner has only mentioned this in a speech and an article. There have been no rulings and no appropriate guidelines put out. They even admit that it is a grey area and there are no parameters or benchmarks that people can base their assessments on. There was a ruling some time ago called the Phillips ruling which somewhat addressed this. Most people operating in this area believe that they have a 50 per cent deduction and that there is a six per cent to eight per cent mark-up per annum on these service trusts. We know that they are usually used by tax accountants and professionals such as lawyers, doctors et cetera, where they run their office at arms-length.

It is absolutely indecent behaviour by the tax office to visit people in a retrospective manner. So when we asked these two gentlemen last week: ‘When are you going to start your retrospectivity? When does the clock start ticking?’—under the new guidelines for self-assessment you are not meant to go back more than four years—they could not say whether it was from Mr Carmody’s speech or whether it was from his article, which was apparently only a one-paragraph article, or whether it was meant for some time in the future. How do these people know how to put their affairs in order? It should be prospective, not retrospective. To that end, recommendation 6 of the tax office, in the ROSA report, states:

Where the tax office changes a public interpretation or long standing practice to the detriment of taxpayers, that change should become effective prospectively and, where necessary, from a future date that allows affected taxpayers reasonable time to become aware of, and act upon, that new interpretation.

The ROSA case is currently taken as future direction. Yet one of the reasons why we have had trouble trying to convince the succession of ministers of this disgraceful behaviour by the tax office is that in some respects they seem to be prisoners of the tax office. I will not name him, but one of the current minister’s staffers was a tax partner in KPMG; his position was national tax director of KPMG. In 1997 KPMG issued tax advice for two mass market arrangements, namely, Freedom Express and Interest Recount, and he was their head man. So why would he then be giving contrary advice to the minister if he has had that position?


Mr Slipper —What does the Assistant Treasurer say about retrospectivity?


The DEPUTY SPEAKER (Mr Baldwin)—Order! The member will be heard in silence.


Mr RANDALL —On retrospectivity the Assistant Treasurer is mute. In fact, it is very hard to get him to address it. Originally he showed good signs in comparison with the previous minister, but currently he has again decided to be manacled by the tax office. The situation is very dangerous when you are taking advice from somebody who seems to be compromised. At the end of the day, I think the tax office is getting above its station in life when it decides to get involved in these sorts of rulings that affect so many people’s lives. In the case of this service trust there are 70,000 taxpayers involved. Seventy-thousand Australians thought they were doing the right thing, some of them for 20 years. Now they are going to be visited by the tax office, who do not even know what the parameters are. So we should be bringing these issues back into the House to be dealt with quite properly as legislation. (Time expired)