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Thursday, 6 September 1984
Page: 608

Senator HILL(8.27) —I wish to speak briefly on this matter tonight to associate myself with the remarks made by my South Australian colleague Senator Jessop and particularly to support the amendment he has foreshadowed, which amendment has the effect of calling upon the Government to delay the introduction of this new sales tax until the Government has received and considered the report of the inquiry into the industry it has set up. I said I would speak only briefly because I spoke at some length on the subject on Thursday, 23 August, immediately after the Budget. I attempted to put the South Australian position and the cost to the South Australian industry and the South Australian economy of this foolish new tax. I mentioned the significance of the industry to South Australia. I think this Government has failed to appreciate the current state of the South Australian economy and the particular significance of this industry within South Australia. I remember that I made particular mention of the effect of this tax upon the Riverland area in South Australia, an area which has been struggling for some years because of the difficulties with the dried fruit industry and its other products and an area which will be hit particularly strongly by yet another taxing endeavour by this Government.

I made the point that this tax will be particularly destructive of small business, the area with the greatest potential for employment growth in this country. I mentioned that it is not simply small wineries that will be detrimentally affected but that the Government should also have considered the small grape growers in South Australia and the tourist industry that has grown up around the small wineries. It is an area of particular growth within my State which will be detrimentally, if not destructively, affected by this tax. I mentioned the figures. It has been estimated that up to 4,000 jobs in South Australia could be lost by this tax which, as my colleague said, will result in a comparatively small amount of revenue to the Government. Approximately $15m will be lost to these small businesses in South Australia and at the moment the State cannot afford to suffer such a loss. I mentioned the promises given by the Prime Minister (Mr Hawke) before the last election and by the present Minister for Primary Industry (Mr Kerin) that this Government would not introduce a wine tax. Those promises have simply been forgotten, but they will not be forgotten by the electors of South Australia. We will make sure that those electors are continually reminded of them.

The importance of this industry to South Australia lies in the fact that it is a growth industry. There are not many industries in my State that are presently growing and have the potential for greater growth. However, the industry is being curtailed so unnecessarily by this foolish tax. The Government clearly recognises that it is an industry that is facing problems. Indeed, it recognises that fact by setting up an inquiry. It appears to us so illogical that on the one hand the Government imposes a new one-off tax on this industry in the form of a 10 per cent sales tax, but on the other hand acknowledges that this industry is facing difficulties and institutes an inquiry into them. That appears to us, as Senator Jessop said, to be putting the cart before the horse. We believe it to be foolish and we cannot understand why the Government does not do what appears to be so logical-that is, first to have the inquiry to determine whether the industry is able to withstand a new burden of this kind and to consider what would be the best way to impose a tax that would have the least detrimental effect on the growth of the industry. But the Government did not go that way. Rather, contrary to its promises, it simply slapped a new tax on the industry. Then in an effort to placate voters, it said: 'Do not worry; we will inquire into the industry and see what the position is in regard to its difficulties'.

Senator Jessop —It did not worry about the possible impact of dumping.

Senator HILL —There has been no consideration of the dumping of foreign wine on the market. That is something the Government did not face when it made this decision. We believe that the best action that we can take in this instance is to call on the Government to delay implementation of this tax until it has the results of its inquiry-an inquiry which I think it is yet to set up. The Government should set up the inquiry, obtain the information, make it public and then look at the question of taxation. That is what the amendment moved by Senator Jessop calls upon the Government to do. As a matter of interest, I would point out that is what the industry is calling on senators to do. No doubt, Mr Deputy President, you and other senators today received telegrams from the industry throughout Australia. They were not saying that there should be no tax but, rather, that the tax should be delayed, that the inquiry be held, and then the question of tax looked at. What we propose tonight is consistent with what the industry is seeking.

I know that this will serve no worthwhile end because the Minister for Resources and Energy (Senator Walsh) indicated earlier, in an interjection in the speech of my colleague Senator Peter Rae, that the Government will not consider this alternative. That is a disappointment to us, but we believe that it is nevertheless our responsibility to press it again on the Government. It is not too late for us at least to live in hope and urge the Government to consider our proposal. We trust that the Democrats will support our amendment, that they will see it as the logical course of action to be taken that this tax be delayed until the inquiry is held and completed. We hope that is the position the Democrats will take in this debate.