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Wednesday, 25 March 1987
Page: 1468

Mr ROBERT BROWN(12.12) —The honourable member for Wannon (Mr Hawker) referred to this exercise on the part of the Government as being one of the most cynical exercises that any government could be involved in.

Mr Braithwaite —Absolutely right.

Mr ROBERT BROWN —The cynicism is not on our side. Our position has been consistent and solid right from the start. The interjection from the honourable member for Dawson is probably the most inappropriate that could be made because the honourable member himself is on the record as one of the most solid supporters of the Australia Card concept of anyone in Australia. I give him now the opportunity to answer yes to the following question: Is he for or against the card? Other supporters include the honourable member for Barker (Mr Porter), the honourable member for Richmond (Mr Blunt), and the honourable member for Gwydir (Mr Hunt), among others on the Opposition side, who are on the record as having said that one of the greatest opportunities available to Australia to overcome the twin abuses of tax evasion and social security fraud is a national identification card of the kind proposed by the Government in the Australia Card Bill.

There are two fundamental issues surrounding this question. The first is whether or not it is the right of a national government to determine adequately the identity of its citizens in a modern, complex society, where that government makes calls upon the citizens to contribute to the common wealth and at the same time provides out of that common wealth benefits of all kinds to members of the community, and where its capacity to do both of those things depends upon an adequate system of identification of those who will contribute or draw from those resources. If the answer to that is yes, as it must be, the next question is whether or not it is legitimate and appropriate for a national government in any complex, modern society to put into place a system which will do that with absolute certainty and absolute efficiency so that the identity of the citizens can be adequately determined.

The second fundamental question is whether the vast majority of Australian people will in the future continue to be ripped off by tax evaders and social security fraudsters as they have been in the past. I do not propose to go into all the statistical evidence which indicates the enormous dimensions of the extent to which this has been taking place. I remember that when we were in opposition we used to make claims that the amount of Commonwealth government revenue lost each year as a result of taxation evasion alone would probably be in the vicinity of $3,000m. The Government of the day-the coalition parties-and particularly the present Leader of the Opposition, the honourable member for Bennelong (Mr Howard), who was then Treasurer, would laugh at that proposal, that suggestion. The Opposition now endorses it. It has now become convinced of the accuracy of those estimates. In fact, $3,000m a year as a figure for the possible extent of tax evasion in Australia is almost certainly an understatement. Tax evasion runs into hundreds of dollars for every taxpayer in Australia, the genuine taxpayers, the honest taxpayers, those who are not only genuine and honest but who are also locked into the system, the pay as you earn taxpayers, the ordinary wage and salary plugs in Australia who have to pay more tax in order to compensate for the sharks.

Mr Humphreys —They have been footing the bill for years.

Mr ROBERT BROWN —As my colleague the Whip says, they have been footing the bill for years and they have said `enough', as well they should. That is why 80 per cent of the Australian people are now indicating their overwhelming support for this proposal. Members of the Opposition were able in a matter of a few short minutes to go through the entire list of people and organisations in Australia opposed to the card. We have indicated that if we were to attempt to identify all the people in Australia who support the card we would have to get all the members on the Government side to read through the list literally for weeks because there are 12 million such people.

I want to take up an issue which has been repeated constantly by Opposition members. It relates to the claim they have made that because, according to them, the cost to the Government of this proposal will be about $1 billion, the cost to business will be $2 billion. The honourable member for Barker, who was a member of the Joint Select Committee on an Australia Card and should know better-and does know better but refuses to present the correct position-again made the claim about the card costing business, the private sector, $2 billion. He said that the figure was based on an estimate by the Director of the Business Regulation Review Unit that the cost to business of regulations applied by the Government generally worked out to be twice the cost to the Government itself. Then it was said that if it is going to cost the Government $1 billion to introduce the card it will cost private business $2 billion.

In the first place it is not going to cost the Government $1 billion at all. It is going to cost the Government only $759m over 10 years. That is the first fallacy in the Opposition's claim. The second fallacy is based quite clearly on the evidence. It is also based clearly on a denial by the Director of the Business Regulation Review Unit in a letter he sent to the Minister for Health that he had made the remarks which were reported initially in the Australian Financial Review. In fact, he went further and said that there is no evidence that the cost of the Australia Card to business would be twice the cost to the Government.

The honourable member for Barker said that that claim had been made by Government members but that it had never been substantiated. Let me do so. Firstly, when a government introduces regulatory controls by way of legislation the cost to the government is minimal. Why is it minimal? It is minimal for these reasons: Firstly, all the government has to do is to prepare the legislation. We have already got counsel within the bureaucracy to do that. So the cost of preparing the legislation is minimal. Then all one needs is some sort of administrative device, or supervisory device, to ensure that those regulations are then complied with. Generally the mechanisms already exist within the bureaucracy. So for a second reason the cost to government would almost be minimal. But, once the regulations are imposed on the private sector, the private sector is generally required to set in place a whole series of new business processes, a whole series of new administrative structures, a whole series of new procedures, a whole series of new devices of all kinds, in order to comply with those regulations.

Why, then, under those circumstances would it not cost the private sector significantly more than the Government to introduce, apply and adopt new sorts of regulatory procedures that are imposed by the Government? Why is this situation involving the Australia Card substantially different? It is substantially different because on this occasion practically all of the cost is going to rest with the Government-the cost of establishing the whole structure to issue the Australia Card, of identifying 16 million Australians, of providing the cards, of providing the office facilities, the agencies, to make it possible for the system to operate efficiently. Why will it not cost private business very much at all? It will not cost private business very much at all because, in general, if I go along to my bank, for example, I indicate what my number is. If I go for a job I indicate to the employer once and once only what my number is. Where is the cost to private business of an employer, in taking on a new employee, recording his or her number and ensuring that it is recorded on the group certificate as well? They are essentially the reasons why the cost to the private sector will be substantially less in relation to this matter than it is normally.

Where would we expect the greatest burden, the greatest financial cost, to rest with the private sector? The answer has to be in the banking system. The Australian Bankers Association has advised the Government that its establishment cost, the cost to the whole of the banking system, will be up to-get this figure-$60m alone. After that, it is estimated that it will cost the banks $4.6m a year to comply with the Australia Card. The claim has been made, quite dishonestly, by the Opposition in the light of that evidence that the private sector will be up for a cost of $2 billion. The cost will be nothing of the kind.

In Australia we now have the opportunity to introduce a system which-on the admission of officers of the Australian Taxation Office and all the other qualified, informed and reliable experts who came before the Committee-will, in the simplest and easiest way, make it possible for the most significant attack to be made on tax evasion, social security fraud and illegal immigration that this country has ever seen. The beneficiaries of that attack will be 16 million Australians-less a few cheats.