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Wednesday, 21 June 2000
Page: 17826

Mr ALLAN MORRIS (11:30 AM) —There are 10 days to go before we see this most dramatic change to our national taxation system and a lot of other aspects which will flow from that. We are now debating who can advise and assist taxpayers and who can actually act as tax agents. Whether one wants to argue the rights and wrongs of the GST itself and the questionable benefits and all the other stuff that goes with that, the reality is that the administration and the implementation of this system have been an absolute shemozzle. They have been, still are and will be for many months to come.

We are being told in the media that there are more amendments to come—like a big surprise, they are going to give us some more—and parliament has only five days to sit. There are only five more days of parliament and the government are talking about bringing in even more changes. These changes are not even through yet; there are other changes going through the Senate which may or may not be passed. What kind of management, what kind of administration and what level of incompetence can generate such a shemozzle? It is a truly magnificent order. It harks back to the current Prime Minister's period as Treasurer when he left the country in such a shemozzle.

The community concerns about the GST are based on a range of issues, but the most pertinent concerns today are about its administration. We are all talking to our community and to our small business people. I doubt if any more than 10 per cent of small business people in Newcastle know what in hell is going on. Everyone I speak to has questions; they are confused. They ring up the Taxation Office and spend 20 minutes on so-called hotlines—which are very cold and very anonymous. They do not get people to talk to; they get machines. They do not get answers; they get referrals and they get totally conflicting advice. Those people who go to seminars come away perhaps more confused and more concerned than before they went.

Recently in the media, I saw this wonderful rationalisation about people who were going to leave small business or who were going to retire. It had a very clever little spin. The real reason people were leaving small business was that, because of the work on the GST and the need to look at their business management, they should not be there. Duh! Wake up! You shouldn't be there! Not only is that patronising, but what kind of insult is that! The people who are leaving these small businesses are leaving not because they should not be there but because they have been given an impossible task. To change and transform the way they do business, as well as acting as an agent for government at huge expense, is an absolutely impossible task.

Let me go to a parliamentary report that made a bipartisan recommendation on small business. On more than one occasion during the inquiry the cost to business was recognised and the committee recommended that governments recognise and make some compensation for that fact. Of course, that has not been acted upon. Instead, the actual cost to business has gone up 20 times. The figures show that $15 billion of wholesale sales tax is collected by 70,000 people. The GST will collect double the revenue. But how many collectors? At least 20 times as many—1.4 million and climbing. There are 20 times as many collectors with twice the revenue; therefore, the cost to business is 10 times as great. In 1989 we said that this was getting unreasonable, that these people were spending a lot of their time filling in forms on behalf of the government. That should at least be recognised and they should be given some compensation for that. Here we are 11 years later—and, from my recollection, some members of that committee are still in the parliament; certainly those who contributed to the Reid report are still here—and it is now 10 times the cost: 20 times as many people collecting for twice the revenue. What kind of stupidity or benefit is that? Further, in talking about the black economy, we suddenly hear this wonderful Pollyanna figure of $7 billion. Let me tell you about that: if we cannot keep track of the 70,000 wholesale sales tax collectors, how on earth are we going to be able to keep track of 1.4 million? This is a recipe and an invitation to those who will rort. If you cannot keep track of the wholesale sales tax system, how are you going to keep track of 20 times as many collectors with reduced tax office staff and a reduced tax office presence?

The Newcastle tax office has lost its public face. You cannot walk in and talk to anyone any more; that has gone. You cannot go in and pay any money. We have a building with 700 people in it, but you cannot go in and pay your tax there. You are sent to a post office to pay it. Why is that? There is one very simple reason: the government do not want people to go into tax offices and complain about the GST because, if they do, the queues will run a mile up the street. So the way to stop people complaining is to cut off the complaints section and cut off the personal contact. The Australian Taxation Office across the country has lost its personal contact in virtually every single office. The whole point of putting those tax offices in the middle of business centres was so that business and Tax would develop a good, up-front rapport. So all the nonsense that has gone on is all for what end? A tax that the vast majority do not want, that is of dubious national benefit but of massive national disruption. One of the worst disruptions of this tax will come late this year or early next year when the inflation spike moves into the system and it is bigger than expected and lasts longer than expected. What clever people have these Pollyanna ideas that somehow the banks will not increase interest rates because somehow this is going to pass by? What clever people actually think banks do that? They may have done that last century—although looking at their record I would doubt it. The fact is that this is going to build into everything.

So we are pushing into the economy a surge of inflation that is uncontrollable and vastly underestimated as every day we see a new exposé. Today it is that residential rents will be twice what was expected. Whether it be airfares or a reduction in the price of cars—wherever you look you see an almost 100 per cent variation in the prediction. So who really believes that the inflation spike will peak at 6.75 per cent and that it will last for only one quarter? Of course it will not, of course it will go longer, of course wages will chase it and of course interest rates will chase both. All the years of hard work put into getting inflation down, all the years of pain and all the years of dealing with a social wage where we considered people's cost of living rather than their gross salary the government now attacks us for almost daily.

All those years of saying to people `Your disposable income is more important. Your social wages, your cost of health and your access to education are just as important' are all blown up. For what benefit? So that we can have an old, European style tax system. Those of us who knew England before the VAT, for example, and who have been there since are saying, `You wouldn't repeat that experience.' I worked in England in 1968 and 1969. I worked there for a couple of years before the VAT and I have been back a number of times since then. None of the people whom I knew while working there would recommend doing what they did there. The big dampener on European employment in the services industry is because of the VAT. This government is replacing a small tax on big payrolls with a huge tax on small payrolls, and it then says that this is good for employment. The Pollyannas opposite are unbelievable. The tragedy is that they actually believe it. When it comes unstuck they are going to blame the world. They are going to blame the media and the scare campaigns. We are not scaring the people. Every day I walk around the streets of Newcastle people come to me in absolute desperation. I do not tell them; they tell me their problems. We are all getting the same.

One matter that I want to raise is slightly related to that; it relates to the use of excise. I had a phone call from the manager of a club in Newcastle, the Stockton RSL and Citizens Club. It is a very good community and a very responsible club. This manager has practised the encouragement of sensible drinking habits for a very long time. He has tried to ensure that his younger club members drink sensibly and learn about drinking sensibly as a social matter. He is absolutely appalled at what has occurred. He had just got his price figures for the cost of drinks in the months ahead, past 1 July. He explained to me that the RTD drinks, the ready to drink cans, have had their prices cut by 28 per cent. It means that a can of bourbon and coke, which used to sell in his club for $4.50, will now sell for $3.25. This has nothing to do with state governments. This has to do with this clever government's tricks in trying to make all things equal somehow or other. What they have done is give the equivalent of three bourbon and cokes for $3.25 in a tin. It is a conscious, deliberate decision that is going to transform the drinking habits of young Australians. This man said, `I have spent years working and trying to get sensible drinking and it is all now undone.' It has all blown up. What on earth were they thinking of? What are they trying to do? Why on earth would a government deliberately make the cost of those kinds of popular drinks, which are aimed at very young drinkers, acceptable, appealing and cheaper? Why would they make the price so attractive compared with less alcoholic beverages? All I could say to him was that this just fits the pattern.

This government has no real depth to what it is doing. It has no real understanding. It is pursuing an agenda that most of us do not understand, appreciate or agree with. But, in the years ahead, that single issue alone will come back to haunt members of this government. I suggest that all of those on the other side look at this very carefully. They will be selling those kinds of drinks at those kinds of prices; when the price of other drinks is going up they are coming down by 28 per cent. Why would you do it? Who is behind it? What is the rationale? For God's sake, wake up to yourselves! You just cannot go on doing these stupid things without having an effect on people and your community. This is social engineering of the very worst kind, because it is unthinking. It is not thinking of the consequences and it is not thinking about the impacts. If nothing else, that one issue alone should at least ring the bells for backbenchers in the government, causing them to ask, `What on earth are we doing?' That is just one example of the mindlessness and stupidity of so much of what is on the government's agenda.

We have more amendments to come; this is just another load. I do not doubt that there will be more next session. I would not be surprised if parliament has to come back early to bring in legislation to correct even more mistakes. The fact is that this mistake-ridden government has almost served its term. Unfortunately, its legacy will not be so easy to correct.