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Wednesday, 21 June 2000
Page: 17824


Mr MOSSFIELD (11:18 AM) —I support the opposition's amendment to the motion for the second reading of the A New Tax System (Tax Administration) Bill (No. 2) 2000. The bill covers three broad areas of tax law: the rationalisation of administrative penalties across different taxes; the rules governing who can advise, prepare and lodge business activity statements on behalf of taxpayers; and a multitude of miscellaneous amendments in areas including the new pay-as-you-go system, the rounding down of tax debts, and discretions concerning lodgment of BASs and the imposition of the general interest charge on outstanding debts.

The bill proposes to amend the various pieces of tax legislation to introduce a uniform administrative penalty regime that will impose penalties relating to statements and schemes; penalties for the late lodgment of returns and other documents; and penalties for failing to meet other taxation obligations. However, whether or not the particular penalties proposed in the bill strike an appropriate level of penalty for the various categories of offences, and for the various differing circumstances, is a very difficult judgment for the opposition to make at this point. Compounding this is the very short time between the introduction and the proposed debate in the House. There has not been adequate time for briefing from the government, nor consultation with stakeholders. Senate committee scrutiny of this bill is, therefore, essential.

The bill also proposes to allow members of accounting bodies and tax practitioners, bookkeepers working for the above and persons that provide payroll services to be involved in the BAS advice, preparation and lodgment. The need for broadening arises because there are not enough tax agents in Australia to deal with the reporting requirements of the government's `simplified' tax system. It is unclear whether the proposed mix of personnel is completely appropriate or not. As the bill currently stands, some existing work by lawyers and sales tax specialists will not be allowed on the BAS. Is this a further administrative botch-up or was it deliberate? No-one knows, but we understand that consultations are continuing with the Australian Taxation Office.

We have heard from the previous speakers this morning that the number of amendments to this allegedly `slim line' tax system is 1,466, a total weight in paper of more than two Sydney telephone books. And this, remember, is only the amendments. The number keeps climbing with amendment bills such as the one we are debating this morning. No wonder, with only 10 more days to go to GST day, there is confusion amongst the business and general community. Just a brief look at some of the newspapers even last week will confirm this confusion. On 13 June the headline in the Financial Review read `GST jitters hit confidence'. I quote:

Business jitters over the GST are fuelling expectations of a deterioration in economic activity and fresh evidence that many executives have failed to fully prepare for the new tax system.

The latest setback to the Federal Government's implementation strategy, revealed in two surveys released yesterday, coincided with further Coalition unrest over the GST.

The June-quarter survey of NSW manufacturing revealed profit expectations had dropped to their lowest level in nine years as a result of the hesitancy and uncertainty surrounding the GST.

Adding to the Government's woes, a survey by Dun & Bradstreet found that more than 50 per cent of business executives were not fully prepared for the biggest tax change in Australian history. And nearly 10 per cent of the 1,000 business executives surveyed admitted they were still in the early stages of planning for the GST.

The release of the surveys came as the Government's GST campaign has been challenged on two fronts.

Rural backbenchers yesterday broke ranks with the Coalition's well-oiled GST sales pitch to push for special tax concessions for remote areas, which they argue will be disproportionately hit by the new tax.

Mr Deputy Speaker, we would all agree with the coalition rural backbenchers on this point, as we agree with your party's position as far as—


Mr DEPUTY SPEAKER (Mr Nehl)—As the honourable member knows, as an occupant of this chair I have no party.


Mr MOSSFIELD —We would all agree with the National Party's position relating to the GST on mobile home sites. In the Financial Review of 14 June, the headlines read `Slow down: business fears grow'. The article begins:

Pressure on the Federal Government over the GST intensified yesterday as business confidence suffered its most dramatic slump in more than a decade and retailers reported weaker than expected pre-June 30 sales.

The same article reads:

A Westpac-ACCI survey of industrial trends shows business confidence in manufacturing suffered its second sharpest fall in nearly 40 years.

The June quarter survey found 59 per cent of businesses expected a downtown over the next six months, more than double the level three months ago.

The slump was the biggest on record except for the plunge in confidence following the 1987 stock market crash.

“Clearly, a major factor behind the fall has been concerns with the introduction of the GST,” said Mr Bill Evans, the Westpac General Manager, Economics.

An article in the Sydney Morning Herald on 14 June headed `Small business flees GST' states:

Fear of the GST is causing small a business exodus, with brokers reporting a big rise in the number of small businesses for sale.

The number of businesses on the market has risen by as much as 50 per cent in the past year as a desire to avoid the GST leads owners to bring forward retirement plans or contemplate a return to life as an employee.

Further in the same article:

The Council of Small Business Organisations of Australia said small business was the nation's employment generator, and the figures showing an exodus were a worrying sign. The council CEO, Mr Rob Bastian, said the impact of the exodus would be compounded by the expected delay in the new business start-ups.

This is not a small business issue; this is an employment issue. The loss of that level of experience in business is potentially damaging to the economy. I believe that these figures are an incredibly important signal to this country and they are giving us the wrong warning.

If we look at the effects of the GST generally on employment, we see that workers compensation premiums in New South Wales, approved by the ACCC, went up by some 12.4 per cent. The government claims that only 10 per cent of this increase is due to the GST; the other 2.4 per cent is due to other factors such as supplier costs. However, the supplier costs in question relate to the liability that the insurer is up for in the future, which will increase because of the broader tax package in terms of the payout. The extra 2.4 per cent is, therefore, also due to the tax package. So the full 12.4 per cent increase in workers compensation premiums in New South Wales is a direct result of the GST and government tax policy.

Whenever you talk to employers, the question of workers compensation is always seen as a major cost. So employers now have to deal with increased workers compensation premiums as well as the increased costs relating to the implementation of the GST. No wonder many small business people are walking away from their businesses and the GST. No wonder caravan park residents are concerned about the GST to be paid on their site rents. No wonder pensioners in general are worried about the effect of this socially unfair tax. That is a term I will use often in this debate. In my discussions with a wide range of people of various political views, the bottom line is, in a majority of cases, that this GST is a socially unfair tax.

I want to refer, as I did earlier, to the GST on mobile home sites. While we have seen a lot of press lately about activities on the North Coast and activities relating to the National Party conference, the issue has been around for some considerable time. In my own electorate of Greenway we have three or four mobile home sites as well as a number in surrounding areas. We have already had a number of meetings, including on individual sites. There was also a general meeting. At the general meeting a number of members of this House were present—the member for Mitchell, the member for Chifley and me, of course. We unanimously rejected the government's GST charge on their mobile home sites. I have to say without any exaggeration that I did have people come up to me, people who were very emotional, and say that at the end of their week they had very little left out of their pension and how were they going to find the extra money to pay the GST. There are now 1,460 amendments—and climbing—yet this government is too heartless to make one simple amendment to save battlers in caravan parks from paying GST on their rents.

I will conclude by quoting the Prime Minister's words, prior to his becoming the Prime Minister, in a press release on 2 May 1995:

Suggestions in today's Australian that I have left open the possibility of a GST are completely wrong. A GST or anything resembling it is no longer coalition policy. Nor will it be policy at any time in the future. It is completely off the political agenda in Australia.

In another radio interview on 11 December 1995, Mr Howard was quoted as saying:

One of the worst things about politics in Australia at the moment is that the public doesn't believe what its political leaders say. Now I am telling you, it is not on the agenda full stop.

PRESENTER: Would you like it to be?

HOWARD: No, it's not on the agenda, full stop. Just not there. Vamoose. Kaput.