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Thursday, 17 February 2000
Page: 13789


Mr SWAN (3:16 PM) —One of the reasons the Australian Labor Party is so emphatically opposed to the GST and why we will roll it back is the savage reduction in the living standards of Australian families and Australian pensioners. It could be repealed today.



Mr SPEAKER —The member for Lilley will resume his seat.


Mr SWAN —Come forward. We will support a repeal. Let us see how genuine you are.


Mr SPEAKER —The member for Lilley will resume his seat! I warn the Minister for Foreign Affairs.


Mr SWAN —This GST package is so unfair to Australian families that the additional cost of raising a child under the GST is calculated at 30c. What we have seen in this House over the past couple of days when ministers have been answering questions is just how unfair the package is. We have seen price increases of 10 per cent admitted to freely when the government have gone around this country for the past 18 months claiming a price effect of 1.9 per cent. What does that do? That eats away at the compensation packages. That eats away at the tax cuts. We have seen what the impact will be on rents. What does that do? That eats away at the tax cuts. It does not matter where you look, it does not matter where you go in this country and it does not matter where you live, you are not going to get the benefits from this tax package that the government is claiming you will. A very large proportion of Australian families and pensioners are going to be substantially worse off. In answers in the House over the last 24 hours, we have heard we have a tax package which will give benefits to the few and will be funded off the backs of the many. That is what will happen.

The Prime Minister, the Treasurer, the Minister for Community Services, the Minister for Trade, the Minister for Agriculture, Fisheries and Forestry and dozens of backbenchers are going around this country saying anything and doing anything to obscure its real impact. What a tangled web they weave. We saw this in the House yesterday on the issue of residents of caravan parks. Residents of caravan parks and mobile homes will be the only renters in this country that will have the GST applied directly to their rent. They will automatically be far worse off than the government is prepared to admit. The Minister for Community Services, Mr Anthony, came in here at the end of last year and said that the 50 per cent application of the GST on long-term accommodation will be a terrific thing for those people, they will be much better off, and they are dancing in the streets out there supporting the application of the GST to their site fees and their rents. Of course we do not have a GST on rents at Kirribilli, we do not have a GST on rents at Point Piper, but we do have a GST on rents for those people who live in mobile homes and in caravan parks—the most vulnerable people in the community who live on very low incomes.

But then what do we get? We get the Minister for Community Services, Mr Anthony, saying one thing down here at the end of last year but saying last week in his electorate, `I do hope that there can be a change there. I think even some of the park owners would prefer not to have that option because it is putting the heat on them because they do have an option, whether to charge or not to charge.' He went on to say: `And I hope I can come back to you shortly and I will, through your representatives, and hopefully there can be a change.' That was Mr Anthony, the member for Richmond. The Minister for Trade is out there doing the same thing—one thing in Canberra, another thing on the North Coast. What was he saying? He was saying: `I would like to assure you that residents who occupy accommodation in a caravan park or holiday village on a permanent basis will not have to pay the GST on their site fees. This will be treated in the same way as rental on a house or a unit.'

Well, it is not. How would any of these people know? They all live on the North Shore of Sydney, like the Minister for Financial Services and Regulation sitting opposite. They are not paying the GST on their rents. But if you live in a small mobile home, for which you have paid $100,000, in the Tweed or up in Wide Bay you will be paying the GST on your rent. That is the whole point. This government essentially believes in the greatest good for the smallest number and all the rest can just take the crumbs off the table. That is what the compensation in this package is going to amount to for many millions of Australians—simply crumbs. At the moment we have a government that has presided over the biggest cuts to family services in Australian history. What has that created? It has created a huge social deficit. The government has the hide to go around the country talking about a social coalition. It is not a social coalition; it is a social catastrophe. While we have had reasonable levels of growth, long-term unemployment is increasing and poverty is growing. The benefits of growth are not being shared fairly in this country. The benefits are going to the few, the many are missing out, long-term unemployment is rising, poverty is rising, kids are not stopping in school and intergenerational poverty is simply continuing to increase.

This government is not fairly sharing the benefits of growth. When you look at the social figures and the impact on families, you will see it has effectively taken the heart out of growth, which everyone in the community was supposed to share, and it has given it to a few at the top. On top of that—this is before the GST starts—it is going to create a tax system that will cause a flood of poverty. The wealthy will get wealthier and the poor will simply get the GST, just like all those people in those caravan parks and mobile homes.

This will be particularly harsh on families, and on families on relatively high levels of income as well as low levels of income. It will punish anyone who consumes all of their income. As I said before in this House, every time a family has a child they will move up a tax bracket, because the principle here is that the more you earn the less you pay; the less you earn the more you pay in tax. That is the whole principle. That is what you will find when you look at the compensation arrangements, and that is what you will find when you look at the tax cuts.

So when it comes to all the distortions and untruths about how beneficial this is for families and for pensioners, what you will get from the Prime Minister through Treasury is a gold medal performance at distortion—lies and untruths about the benefits that are supposed to flow to the many. They will not flow to them at all, as we will see in a moment. All of the compensation arrangements of this package are based on a 1.9 per cent inflation rate and, as the price impact goes up over that 1.9 per cent, the supposed benefits—even in the government's own terms—rapidly disappear. That is particularly the case when you consider that the Treasurer has now admitted to a five per cent inflation rate and the Reserve Bank has owned up to a five per cent inflation rate. And what do we get? Compensation to pensioners is at four per cent, inflation is going up by five per cent and, as we know, the government will take half of that four per cent back anyway, so pensioners will be substantially worse off. All beneficiaries will be substantially worse off. They will be substantially worse off because they will be hit by the higher inflation rate because it will impact most markedly on those necessities of life on which they spend all of their income—on food, accommodation and clothing.

But the government modelling for this package assumes that the expenditure patterns of pensioners and low income families are no different from those of the minister opposite or of Kerry Packer. So the higher the inflation rate the greater the impact on those clothes from Big W and the greater the impact on food. Even with the changes that were made in the Democrat deal last year, something like a third of all food consumed by low income Australians will have the GST on it, so they are whacked there. Something like 75 per cent of the expenditure of people on low wages or incomes will still be impacted on by the GST. So these people will lose substantially. That is the case with food and it is also the case with housing. The government in its package says, `Oh, well, there will be an impact on rents of something like 2.3 per cent,' but already in Sydney we are seeing rises much greater that—and before this package comes in. Of course, as we know, renters generally do not have the GST applied at the end point of their rents—they are input taxed—but rents will go up, and this will be particularly the case in Sydney.


Mr Hockey —Where do you get that from?


Mr SWAN —Where do I get that from? Do you live in Sydney, Minister? Do you know what is happening in the rental market in Sydney? Do you know what is going on down there? Increases of something like $30 a week are occurring in the Sydney rental market. That is enough to blow away in one fell swoop half the tax cuts for someone earning $50,000 a year. It just goes in the impact on rents. But let us get back to families, because that is where it will really impact. It will impact on those people who spend most of their income on the necessities of life—on food, even when it is taxed, on clothing, on electricity—


Mr SWAN —A third of all food is still taxed, but you appear to be ignorant of that fact—and that is the problem. Why don't you go out and live in the real world and find out what is going on with Australians? What is actually happening to them in their daily lives? The ABS household expenditure survey reveals that 75 per cent of the budgets of low income earners will still be hit by the GST, and that includes a pretty big impact on food. Families with three or more children spend something like $98 a week on housing costs compared with couples without children, who spend something like $76 a week. Such families spend something like $23 a week on energy costs compared with couples who spend just $16. What is the point here? The point is very simple: families with children will have their standards of living very substantially eroded, and it will not be compensated for by the new tax scales.

The stench of this package really emerges when you look at the tax cuts up the income scale. Even with the Democrat changes, a family earning $30,000 a year and with three children will get just $16 a week in tax cuts compared with a couple earning $100,000 a year who will get $60 a week in tax cuts. This means that children born into a family earning $30,000 are worthy of just a quarter of the tax cut of children born into a family earning $100,000. That is obscene. Australians are now seeing this. They are seeing the advertising; they are seeing what is going on in the supermarkets; they are starting to ask questions about where the benefits are coming from. Go out there with your publicly funded advertising and tell them how little most Australians will get for the price rises that are happening in the supermarkets now and which will be happening at an even greater rate after 1 July.

So the government's so-called family package is nothing more than an attempt to try to compensate for an unfair tax. It has some small increases in family allowances and family payments. The compensation, as I said before, is based on the ridiculous assumption that the price impact of a GST for each child is 30c. That is what it is based on. So, if you are a single income family earning $41,000 a year and with two children aged six and 11, the new payment will provide just $2.50 a week extra for each child per week. That is a terrific compensation package, isn't it? And doesn't it really go to the heart of why the compensation is insufficient and of how unfair the tax cuts are and what the government is really on about? This is a government which is simply very strong on taxing the weak and very, very weak on taxing the strong. And it does not matter whether you are dealing with caravan parks or people who rent houses in Sydney or where the family lives in this country: most families will be substantially worse off.

But it gets worse. It gets much worse for pensioners. And it gets much, much worse for retirees. The GST is an automatic devaluation of the life savings of any self-funded retiree. I will not go through the figures about how worse off many self-funded retirees will be.



Mr SWAN —But when they find out they will be right up your ribs, Minister, because they had high expectations of this government but they are getting nothing. You will be rounded up.


Mr DEPUTY SPEAKER (Mr Nehl)—The minister will be silent and the member for Lilley will address his remarks through the chair. Ignore the minister, please.


Mr SWAN —I apologise, Mr Deputy Speaker. But pensioners, as I said at the beginning, get a four per cent risethey are getting that for a five per cent inflation rateand the government will take half of it back when they get the next rise, depending on when that will be. It will probably be March 2001. They can see this already. They read the Pensioner News. Pretty pictures of Larry Anthony, the member for Richmond, in the Pensioner News will not save backbenchers in this House who have large percentages of people in mobile homes in caravan parks in their electorates. They will not save you either, Minister Hockey. You will not be able to go out there and explain away the rank unfairness and stench of this package.

That is why we have an emphatic commitment to roll back the GST and to lift the burden on the weakest and most vulnerable, to do something about the impact of the GST on small business, to look at its impact on jobs, and to roll it back in the areas of health and education—areas which were supposed to be GST free but which are not in many cases. Nothing will have a greater impact on families than the impact of the GST in the areas of health and education. As I said at the very beginning, a consumption tax is anti-family. It punishes those people who struggle to earn money, who work hard day in, day out, to provide for their families, to make a better life for their children. Every time they have an extra child, under this government they go up a tax bracket. That is why we need a fair taxation system in this country. (Time expired)