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Thursday, 13 April 2000
Page: 15919


Mr RUDD (12:01 PM) —I rise to speak on the Taxation Laws Amendment Bill (No. 11) 1999, which is a technical bill which relates to a number of quite discrete subject areas. These relate to: integrity measures concerning the alienation of Australian real property by non-residents; the income tax deduction for gifts; the extension of periods of deductibility for certain donations; the income tax exemption termination for non-resident sportspersons, clubs and associations; and capital gains tax. They are a range of technical amendments seeking to correct errors which have gone through this House in previous legislative exercises.

Labor has moved a significant amendment to this bill, which goes to, firstly, the nature of the government's misleading claims on the raft of its taxation proposals and bills before the House; secondly, the unfairness of its overall taxation package; and, thirdly, the complexity of that package, both from the business community's perspective and from the perspective of consumers, those who have to live with this tax. This has also presented the Australian Taxation Office with an administrative nightmare, not to mention the other problems that the office is currently experiencing. My remarks will be addressed in large measure to these particular amendments.

First and foremost, it is important to address the whole sorry saga of John and Wendy. All of us who were candidates in the last federal election remember clearly the government's use of cameo examples in terms of who would be the net beneficiaries of the government's taxation proposal, the ANTS proposal. We remember the specific claim made by the government prior to the election that nobody would be worse off under the GST and the related measures to be introduced with it. We also remember the particular language used by the Prime Minister in April last year, when he again said that no-one would be worse off under this package. What a tangled web we weave in this place. When we look at the detail as it has unfolded we clearly find evidence that the government, through the Prime Minister and senior ministers, both prior to the election and subsequent to it, have effectively duped Australian voters and the Australian community into believing the proposition that nobody will be worse off. Through the evidence which has been presented to this parliament in the last week or so, we have also seen that there are significant sections of our community who will be worse off as a consequence of the introduction of this package. We have seen the unravelling of all the claims that have been made in the period to date as the details of it become increasingly clear to those in the community who will have to suffer the consequences.

I will go to that example of John and Wendy. If John, for example, earns $30,000 a year and Wendy earns $28,000 a year and Wendy decides to take at least a year off to look after her two children from, say, December 2000, she will lose $67 a fortnight in parenting payment because her income disqualifies her under the annual income test. Previously she would have qualified almost as soon as she stopped working—and that was by complete and explicit policy design. It was Labor's measure designed to help families with the costs that they face as soon as babies are born. The Prime Minister has deliberately decided to put that out of reach. John and Wendy are not going to be better off. They are going to be $29 a week worse off, and that is before the GST bites in. After the GST comes in, they will be $63 a week worse off—and that comes from a government that has said on repeated occasions in this place and in the broader community, both prior to the last election and subsequent to it, that nobody will be worse off.

How are the government going to try to make good on this promise? The Prime Minister was confronted on this matter in question time in this place on Monday this week. The Prime Minister claimed that John and Wendy would now be $12 per fortnight better off, yet he has ads going around the country which now say that the typical family will be between $40 and $50 better off. Out there in cameo land on the sorts of political representations that the government have put to the whole community, are they trying to say that people like John and Wendy do not represent average Australian families? Are they not a typical family?

On top of all that, we are now confronted with probably the most goading and galling exercise of all, and that is the $80 million taxpayer funded television advertising campaign running right across the length and breadth of this nation which again repeats the untruth that no Australian will be worse off as a consequence of the introduction of this package. It says, `Relax, John and Wendy. The government is providing special assistance for the cost of raising children.' It implies, `Bob's your uncle. It will all work out in the morning. Don't worry, no-one's going to be any worse off.' The reality is exactly the reverse for significant groups in the community as a consequence of the introduction of this package. Sometimes I wonder where this government finally gets off. The bottom line is that, when you look at the whole question of the propriety and probity of public advertising in this country, this breaches historical benchmarks.

I come from the state of Queensland and I lived through the Fitzgerald inquiry. A large part of the Fitzgerald inquiry's examination of the probity of the administration of that state by the National Party in the period through until 1989 was of its use and abuse of public advertising. Those of us from that state would remember how every Sunday night before the 6 o'clock news Joh Bjelke-Petersen would come on to the television screen, usually driving a D9 bulldozer, courtesy of the taxpayer, and then would run a five-minute commercial entitled `Queensland Unlimited' broadcasting to the length and breadth of the state of Queensland, using the taxpayer funds of the people of Queensland and saying, `Look, Queensland is a great place. There is not a problem under the sky. We basically have everything under control. We are running a pro-development agenda. We have the reins of government well in hand. Every citizen of this state is in a good state of security and wellbeing.' We all know with the benefit of hindsight what an extraordinary set of misrepresentations that was. But the principle was this: we had on weekly television the abuse of public funds, taxpayers' money, to run a patently party political message to the Queensland community articulating the political interests of that government.

When I look at this $80 million taxpayer funded advertising campaign today, I see no distinction between what this government is doing with such a huge slice of public funding measured againt what the Bjelke-Petersen government did in the 1980s in Queensland. It is equally as sick, both in its intention and in its execution. It is a blatant exercise in political propaganda. If you look at those advertisements, they are entirely advocacy exercises. They are not about the provision of public information to a community that needs it in order to understand the detail of the tax; they are political advocacy exercises and show every hallmark of the Queensland precedent to which I have referred.

What could that $80 million be spent on? We have had debates in this place about the erosion of Commonwealth government funding to higher education. We all know about that from the number of students that come into our electorate offices who can now no longer afford their HECS contributions and whose ability to access Austudy has been effectively undermined by the changes that have been introduced by this government; yet the government can quite happily find money in its pocket to pull out $80 million and spend it on a public advertising campaign in order to get itself out of political hot water on a tax package that is running off the rails.

We have had debates in this place about the adequacy of Commonwealth contributions to child care. We have had debates in this place about the adequacy of Commonwealth contributions to disadvantaged schools right across this country. We are going to have a debate in this parliament soon about things like the inability of this government to continue to fund properly the operations of Radio Australia across the region and across South Asia and beyond, as well as the proposed sale of the Darwin transmitters. Why? Because the government cannot find $12 million to sustain that operation. Yet it can find $80 million in order to politically prop up its moribund credibility as far as this taxation campaign is concerned. It can find $80 million to spend on saving its political hide—or to try to do so—yet it cannot find $80 million to contribute to critical areas of public and social need right across this nation.

Each member in this House knows from their electorates that there are community organisations, HACC programs, SAAP programs and people in dire need in the individual communities that we represent for whom $80 million would represent the absolute solution of their particular problems. But this government says, `No, we do not have enough money for that but we can bring in the Josef Goebbels unit and whack up a few ads on the television in order to convince everybody that this is the tax package of the century.' Well, it is not.

The proof of the government's deception on this issue of GST winners and losers was finally underlined in this House on Tuesday when the Deputy Leader of the Opposition, Mr Crean, asked the Prime Minister a very simple question. His question was, given the Prime Minister's statement of the previous week, whether he was able to confirm whether the following proposition was true or untrue:

The average family will receive a tax cut of $47 a week after factoring in the goods and services tax.

Again, the question to the Prime Minister was:

Can you now confirm that the $47 a week you quoted is before the goods and services tax is factored in, not after?

The answer from the Prime Minister? It is not worth repeating, but the shorthand answer of the Prime Minister was to duck and weave, meaning, `I am not going to answer that in a month of Sundays.' The bottom line is that this government's credibility has been completely blown in its repeated attempts to run an argument about the net wellbeing of Australians before and after the introduction of the tax and whether or not the tax has been factored in to the numbers that have been used.

How is the government responding to its problems as it has encountered public exposure of the fact that there are large groups of Australians who are going to be worse off as a result of the introduction of this package? What is its policy on the run response to this particular problem? Well, at five minutes to midnight I think the political realisation finally hit that it had a problem; that is, there were a number of groups in the community who were going to be worse off and they were becoming increasingly vocal. Enter from right field Senator Jocelyn Newman with the top-up payments system. Whacko, here we have a top-up payments system that has been dreamt up on the run.

The government was asked in this place in question time: if you are serious about this proposal, if you are serious about believing that there are going to be transitional problems for people in particular payments categories in terms of the introduction of the GST and its impact on them, presumably in the forward estimates you have already allocated a quantum of money to fund this program? What was the answer in this House? Sorry, no, we do not actually have a particular amount of money set aside for this purpose. In other words, what we have with this proposal, this top-up payments scheme, is a cute piece of political rhetoric. It is a nice press release to whack out there, something for the government backbench to wave at their disgruntled constituencies and say, `Look, we have a method that can cope with any difficulty that you happen to experience temporarily post 1 July once this thing comes in. It is called the top-up payments system. What do you have to do about it? Well, we are not sure what you have to do about it but we think there are some forms for you to fill out. You will have to substantiate how you have become worse off as a result of the introduction of the tax and other changes to the benefits system. You have to substantiate your claim; you have to produce the receipts, the dockets and all the rest of it,' forgetting the fact that the receipts and the dockets do not actually have the GST stamped on them.


Mr Murphy —No, it is hidden.


Mr RUDD —So it is a hidden tax because this government, unlike any other government in the OECD that has introduced a consumption tax, does not propose to disclose the actual dimensions of its tax on the dockets and the receipts provided to consumers. Yet, as far as the people who will be trying to access the so-called top-up payments scheme are concerned, they have to somehow substantiate how they are going to be worse off using a range of basic documentation which, in large part, does not contain the information on it that will presumably be needed to demonstrate what extra costs they have had to encounter.

I wonder where these sorts of bright, breezy proposals, such as this top-up payments scheme, come from. Can you imagine the meeting in the Prime Minister's office or the Treasurer's office where this was probably dreamt up? You can just picture it. There is Mark Textor in one room. He has just got the polling in from the night before and the government is in trouble. This GST thing is really starting to bite. There are a few people from the Treasurer's office, someone from the Prime Minister's office and some poor benighted bureaucrat from the Department of the Treasury, trembling because he can see the prospect of a further call on public revenues being demanded, all sitting around saying, `What are we going to do about this problem because we know for a fact that the government has introduced a set of measures which will cause a significant slice of the community to be worse off. What are we going to do about it?'

Enter Mark Textor. He said, `What we need is some transitional camouflage. That transitional camouflage we could call a top-up payments system. That is something we can all use out there in the suburbs to convince our individual constituencies that there is a mechanism out there that can provide them with some temporary economic justice. But do not worry, Treasury; we do not expect any money is actually going to be expended, for the simple reason that we are going to make it so inaccessible and so difficult for would-be users of this scheme that they will not be able to make any substantial call on it.' Nice piece of politics!

You have to think about people like Mark Textor. He has been pretty busy of late. He has had to come up with some key lines and themes on how to handle this particular problem. He has been very busy on the stolen generation problem. He has been very busy on mandatory sentencing. He has also been providing, I think, people in the office of the minister sitting at the table, the Minister for Immigration and Multicultural Affairs, with new key lines and themes on how to manage the immigration and refugee debates. He has been providing useful political armoury in terms of how this government is going to manage its overall political campaign of wedge politics. We have had job snobs and the rest of it. Mr Textor has been very busy—but not too busy to provide the government with some key tactical and political advice about how to massage and manage this emerging problem in terms of those who will be the demonstrable, measurable, quantifiable losers as of 1 July this year.

We should look at how we in the opposition have sought to tease out of the government how this thing is to be used. For example, the Leader of the Opposition, Mr Beazley, on Tuesday of this week, again asked the Prime Minister a very simple question about how the scheme was to operate. He said:

Prime Minister, I refer to your claim that all GST losers can apply to a special unit in the Department of Family and Community Services for an income top-up. Why does this last for only three months? What happens to people who are worse off after 30 September, such as John and Wendy...

The answer from the Prime Minister, apart from the usual and conventional duck and weave: do not worry; if people are disadvantaged they can `make submissions'. They can make submissions to whom; using what criteria, using what evidentiary base? How do you actually fall across the line in terms of accessing these top-up payments?

We had a further question from Jenny Macklin, the member for Jagajaga, on who precisely would be able to access top-up payment provisions. She asked the Prime Minister about the actual income characteristics of those who would be eligible. She asked the Prime Minister:

Why does Minister Newman's press release cut off the top-up payments provisions under family tax benefit part B on 30 September? Won't this ensure that the only carers eligible for your payment will be those who have earned more than $10,000 between 30 June and 30 September—an annual salary of $40,000? Isn't it the case that only 15 per cent of working women earn more than $40,000 a year? Prime Minister, haven't you constructed this top-up payment to ensure that the 85 per cent of female carers who need it most will not be eligible for it?

The answer to this question from the Prime Minister was to duck and weave: `I don't want to get into the detail of that.' The bottom line is that this whole scheme has been constructed to ensure that there is minimal access to it in order to minimise the call on public revenues but, most critically, to provide this government with some political camouflage on the way through the immediate political difficulties they will face as of 1 July this year.

We had from Michael Lee, the shadow minister for education, a similar question to the government in relation to whether this top-up scheme would be made available to students who are relying, for example, on benevolent trusts in order to fund their way through university. The answer from the Prime Minister in terms of whether they would be eligible for top-up payments was to duck and weave, meaning, `Of course not. This is too difficult, too hard. Remember, the ultimate rationale of this whole scheme is that we do not want people out there in the community accessing this thing; we just want to be able to say in the overall public debate that in fact we have a mechanism which the community can draw upon without providing the community with the means through which substantially to make use of it.'

The bottom line in this whole debate is that, as we all know and as multiple speakers from the opposition have commented over the last 12 months and multiple commentators in the community have similarly commented, prices are going to go up as of 1 July. They will go up by a margin considerably in excess of the 1.9 per cent to which this government has given recognition. Furthermore, the income tax cuts that this government promises as of 1 July will not compensate for what occurs. The changes to benefits payments will similarly not compensate for the changes that will occur.

We have seen time after time in example after example in this place how changes in price structures are going to adversely affect the living standards of Australians after 1 July. We have had presentations in this House on how the cost of road transport will increase. We have had admissions from the government's own side, through Eoin Cameron in Western Australia, about the impact on basic things such as beer prices. The bottom line is that what we have with this government is something that is, at its core, a naked political strategy to try to camouflage its political difficulties as it approaches the sword of Damocles on 1 July, hoping that mechanisms such as the top-up payments scheme, that dissimulation on the fate of John and Wendy, will be sufficient to get them across the line. And it will not.