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Tuesday, 26 May 1987
Page: 3325

Mr ROBERT BROWN(4.43) —I find the amendment just moved by the honourable member for Mackellar (Mr Carlton) quite astounding for a number of reasons. In his closing remarks in this debate the honourable member for Mackellar suggested that the Government should withdraw the Sales Tax Laws Amendment Bill and start again. The Opposition has proposed an amendment which refers to what it calls the adverse impact on ordinary families and on business and farm costs of increases in telephone and postal charges which it claims will flow from the provisions of this legislation and which, as the member for Mackellar quite correctly said, amount to the application of sales tax on many of those public authorities which previously have been exempt from sales tax. One of them is Telecom and another is Australia Post. I think that stands in remarkable contradiction to the position pursued by the Opposition in relation to public authorities generally.

The Opposition has made it perfectly clear that in government it would privatise-as it calls it-some of our great public authorities. The Opposition is referring to its intention to sell off to a select group in Australia-that is, to those people who can take advantage of the opportunity to buy profitable sectors and sections of our public authorities-assets which belong to the Australian people.

The other thing I find quite strange about the Opposition's amendment is that, as a result of its privatisation proposals in connection with Telecom, it has now been well documented that the cost of telephone connection to people in rural areas in particular would be so exorbitant-and many people in the great outback and rural areas of Australia and in the great rural industries of Australia are in urgent need of telephones-that they simply would not be able to afford them. They would be left without the fundamental and important means of communication which is so generally available throughout the Australian community. They would be left without it because we would not have, as we have at the present time, a national Telecom system which allows cross-subsidisation. So the great metropolitan cities of Australia, because of the profit that they show on the operation of telephone service, subsidise through part of that profit the installation of telephones and telephone services in the great rural areas of Australia. Who is seconding the amendment moved by the honourable member for Mackellar?

Mr Gear —Not the National Party?

Mr ROBERT BROWN —Exactly-none other than a member of the National Party. I am sure that my colleague the honourable member for Canning (Mr Gear) in his contribution shortly will draw attention to some specific examples of the extent to which those services are now being cross-subsidised. The honourable member for Parkes (Mr Cobb), who has seconded the amendment of the honourable member for Mackellar, may well be encouraged to reconsider his position. It is very likely that when the honourable member for Parkes rises to speak to the amendment people in his own electorate will be tuned in. They may not have a telephone but almost certainly they will have a radio and they will hear what the honourable member for Parkes has to say about their prospects of getting telephones in the future. They are some of the reasons why this amendment is quite extraordinary. Another reason is that it appears from the wording of the amendment that the Opposition proposes that any government should accept without question recommendations made by the Industries Assistance Commission. I do not know whether members opposite understand that the Industries Assistance Commission is not a regulatory body and is not a legislative body; it is and advisory body. Its purpose is to inquire into and investigate various types of protection within the Australian economy, make recommendations and report to the Government. It is then the Government's responsibility to determine whether, and to what extent, it will accept those recommendations and act on them accordingly. (Quorum formed)

I want to advise my very good friend, Jim Curran, and the people of Gilgandra that, very shortly, the honourable member for Parkes will be speaking, attempting to justify his seconding of the amendment that has been moved by the honourable member for Mackellar, to which I have referred. The honourable member for Mackellar made it perfectly clear that honourable members opposite believe it appropriate for a government to accept without question recommendations of the Industries Assistance Commission. I believe that this Government will do no such thing; it will consider the recommendations and, in the light of those considerations, determine its own position.

Mr Hand —As we did in connection with textiles, clothing and footwear.

Mr ROBERT BROWN —As the honourable member for Melbourne quite correctly reminds me, we did so in connection with textiles, clothing and footwear. What a magnificent result the Government achieved on that occasion, not by accepting the recommendations of the IAC but by constructively building on those recommendations. We will continue to do that in the future. The third reason why this amendment is quite strange is that honourable members opposite criticised the fact that the Government proposes to amend the entitlement for people who are returning to Australia bringing goods back with them, in particular, very large and expensive or complex and sophisticated forms of electronic devices. It was acknowledged by honourable members opposite that that practice has tended to explode and that something had to be done about it. The Government has chosen to do something about it and it should be applauded. Not many people from my district, when returning to Australia bring back, in addition to their personal effects-that is, the clothing that they may have bought overseas-equipment worth more than $400. It is about time, and the Government has accepted that it is about time, that a ceiling was placed on that practice.

This Bill proposes to amend both the Sales Tax Assessment Act and the Sales Tax (Exemptions and Classifications) Act in order to do the two things to which attention has already been drawn. The first is to withdraw the entitlement to exemption from sales tax for certain Commonwealth authorities. I have referred to two of those authorities-Telecom and Australia Post. In addition, there are the Army and Air Force Canteen Service, the Australian Capital Territory Gaming and Liquor Authority, the Superannuation Fund Investment Trust, and the Housing Loans Insurance Corporation.

Honourable members opposite have claimed on other occasions that the public authorities in Australia are being feather-bedded as a result of concessional treatment provided to them by successive governments. I make it perfectly clear that one of the reasons why we have decided to withdraw exemptions from sales tax is to ensure that any type of concessional feather-bedding that occurred in the past will cease in the future. We do not believe that the great public authorities and enterprises of Australia need that sort of treatment. Simply because they belong to the public sector, it is sometimes considered that that type of concessional treatment is necessary. It is not necessary at all. As a result of these legislative changes, we will indicate that it is not necessary.

We do not want to see the great public enterprises in Australia, which belong to the Australian people and which fulfil extremely important social and national purposes, treated in a wimpish fashion by this Government or by any other government. Those bodies are capable of standing on their own feet and of proving to the Australian community that public enterprises can be just as efficient and successful as enterprises in the private sector.

A particularly good example is the operation of the Overseas Telecommunications Commission which, unlike many of the other public authorities, has not been subject to the types of concessions that have been provided for other bodes. Traditionally, it has paid all Commonwealth taxes and duties, including corporate income tax. Despite that, in the five years prior to the presentation of its 1986 annual report, the OTC made income tax payments and paid dividends to the Commonwealth totalling more than $267m from pre-tax profits of $341m. That is an outstanding example of the way in which public enterprises can not only fulfil their social responsibilities but also, in a very positive way, make profits and, in the process, ease the burden of taxation on the community.

We must see this legislation in the context of the total package that the Treasurer announced in the May expenditure statement. The Treasurer indicated on that occasion that, without any remedial action by the Government, Commonwealth Government expenditure in the next financial year would have increased by $7,000m. As a result, the forward estimate for the Budget deficit next year would have been about $6,000m. In the light of that, quite clearly it was necessary for the Government to take action to ensure that the level of the projected deficit would continue to decrease, as has occurred in consecutive years under this Government. I remind honourable members of the situation that we inherited when we came into government in 1983; there was a projected Budget deficit of $9,600m, more than 5 per cent of the gross domestic product. That would have been the position had the previous Fraser-Howard Government still been in office when the Budget was brought down in 1983. In fact, in the last three years of the Fraser Government, the Budget deficit positively exploded.

For example, in 1981-82 the Fraser Government Budget deficit was $548m, or about 4 per cent of GDP. In the next year-the last year for which the Fraser Government had the responsibility of introducing a Budget-that $548 Budget deficit exploded to $4,473m. Had the Fraser Government been in office for another 12 months, that deficit would have more than doubled to $9,600m, or 5.1 per cent of GDP. (Quorum formed) That is probably the best indication of the appalling abyss into which honourable members opposite have fallen. The best that the Opposition can do at the present time is try to use up the time available to members of the Government to present legislation. In relation to some of the more responsible responses to the May economic statement, Bryan Frith from the Australian stated:

This mini-Budget is positive and courageous.

In an editorial the Australian also stated that the May economic statement was `a serious and impressive attempt to cut public spending and to reduce Australia's budget deficit'. That same editorial finished by saying that it was an admirable contribution to the struggle for Australia's economic recovery. The Canberra Times stated that it was `a step in the right direction' and that last Monday's statement was `a step toward getting the Australian economy back on the rails and the Government deserves some credit'. The Business Councils of Australia stated:

These reductions are another important step in the process of restoring the Australian economy to health and, as such, they deserve the support of the community.

We have to see this legislation in the context of the May economic statement and the general objectives which that statement hopes to achieve. We have to understand also that, the battle lines are now being drawn between the Government's concern for moral, social, economic and political reform and responsibilities and the Opposition, and the great mass of the Australian people should know that those lines are being drawn.

Mr DEPUTY SPEAKER (Mr Blanchard) —Order! The honourable member's time has expired.