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Tuesday, 28 August 2001
Page: 30418


Ms GILLARD (6:21 PM) —I rise to speak on the Taxation Laws Amendment Bill (No. 4) 2001. I would have thought that the last thing we would have heard a member of the Liberal Party refer to in this House today is the question of rorts.


Mrs Bronwyn Bishop —Yes, $4 million worth.


Ms GILLARD —Exactly. We have heard about rorts all day, and if that is the contribution of the deputy leadership contender for the Liberal Party, I do not think we have much to worry about.

The bill deals with four principal proposals. First, through schedule 1, it deals with amending the imputation rules in the Income Tax Assessment Act 1936 to take account of the reduction of the company tax rate from 34 per cent to 30 per cent. Secondly, it amends the Income Tax Assessment Act to defer the commencement date of the review of business taxation proposals to tax friendly societies on investment income received that is attributable to funeral policies, scholarship plans and income bonds. Thirdly, it amends the Income Tax Assessment Act to make a series of corrections relating to the intercorporate dividend rebate. Fourthly, it amends the Income Tax Assessment Act to deny refunds of excess imputation credits to non-complying superannuation funds and non-complying ADFs. Finally, it makes some technical corrections to the franking rebate provisions and the Medicare Levy Act.

The member for Wills has moved a second reading amendment, and it is to that second reading amendment that I first intend to address some remarks. I note that in that second reading amendment the member of Wills refers to condemning the government for:

(1) imposing a complex and cumbersome tax system on Australian businesses rather than delivering the simpler system it promised;

(2) creating new tax avoidance opportunities, despite addressing some existing avoidance opportunities in this bill ...

It is important to note that less than two weeks ago the Australian community reminded the government yet again of how it views the government's imposition of the GST. That reminder came in the form of the Northern Territory election, with the breathtaking and unexpected win for Labor by Clare Martin and her team. Everybody on this side of the House wishes her well as she ends the era of cronyism in the Northern Territory and moves to an era of responsible government. In the analysis of what moved voters in the Northern Territory so overwhelmingly to endorse Labor, we have to note that the GST was a very significant point. You do not have to take my word for that, because the former Chief Minister, Denis Burke, who is now relegated to Leader of the Opposition, told the ABC's Lateline that his analysis was that the GST had caused resentment and hurt; that is, that it was an operative factor in the Northern Territory election. That was enough to seriously embarrass the Prime Minister—and why wouldn't you be embarrassed as state and territory coalition governments around Australia are knocked over, partly as a result of the GST?—so he declared it a relatively minor concern in the election. One would have thought that Denis Burke's analysis of Northern Territory politics was to be preferred.

I would have thought that the GST was a substantial factor in the Northern Territory election in circumstances in which there has been a very big cost of living increase in the Northern Territory between June last year and June this year. For example, in Darwin the cost of living increase has been 5.4 per cent. The latest CPI figures—they are very important figures in terms of the sorts of problems that the price escalation caused by the GST has caused ordinary people—show that electricity costs have risen by 9.2 per cent. That is a very important factor in the climate in Darwin, where people are reliant on airconditioning and obviously have no way to power it except by using large amounts of electricity. Anybody in this House who has spoken to families in Darwin, particularly Defence Force families, will know that airconditioning, and paying for it, is a very live issue. Beef and veal prices were up 7.6 per cent, and lamb and mutton prices were up 4.8 per cent. We can see, just in the escalation of the prices of those items, as well as the escalation in the cost of living overall, that the GST has been a very important factor in the Northern Territory election.

It does not stop there. If we analyse the population in the Northern Territory, we find that 9.9 per cent of voters are permanent residents of caravan parks. In relation to GST on caravan parks and permanent residents, the government has performed the most inelegant series of backflips and still has not managed to get it right. We know that, originally, long-term residents were to carry the full 10 per cent of the GST. That was a real inequity, and caravan park long-term residents rightly started campaigning against it. In those circumstances the government engaged in its first backflip, and that was to reduce the GST to 5.5 per cent, although the full 10 per cent GST would still apply to site rentals. The government came up with that formula in a desperate attempt to make it simpler for caravan park proprietors to separate what inputs would apply to that part of the business which related to permanent residents. But we know that that backflip has not achieved the results that it was supposed to achieve, and we have evidence of that from those who work in that industry and understand how it operates. For example, we have Jim Clark, the New South Wales coordinator of the Affiliated Park Residents Association, who says that even from the government's second backflip—let us remember that they have backflipped twice on the way in which caravan park rentals are supposed to be dealt with—he does not expect any change in the point of view of residents and that they will continue to pay the GST.

The 9.9 per cent of voters in the Northern Territory who are permanent caravan park residents seems a high percentage until you start comparing it around the country. We find, for example, that in the seat of Kalgoorlie 20.2 per cent of those who voted at the last election are residents of caravan parks. One would have thought that the government's inability to get the issue right would make a real difference there. The list goes on in terms of the areas of Australia that it affects: Cowper, Eden-Monaro, Gilmore, Page, Richmond, Robertson, Dawson, Herbert, Hinkler, Leichhardt, Longman, Moreton and Wide Bay, to name just a few.


Mr Emerson —I've been everywhere, man; I've been everywhere!


Ms GILLARD —Members on this side of the House could claim to have visited to all those electorates. The shadow minister has probably been to all of them twice. We know, for example, that the pain and hurt in the community from the GST is going to continue to be a factor. It was a factor in the Northern Territory election, and we would expect from that example that it will continue to be a factor in the forthcoming federal election. In particular, it will continue to be a factor in the areas that I have named, which have a disproportionate number of long-term caravan park residents.

The fact that the GST is continuing to be an issue in the community is also verified by a number of opinion polls. For example, we have the Morgan opinion poll reporting that the GST remains a major obstacle to the electoral fortunes of the Howard government. It says that since the introduction of the GST the proportion of Australians who say that they are personally worse off rose from 22 per cent in August 2000 to 34 per cent in August 2001. We recall that the other side mocked the Leader of the Opposition when he described the GST as a slow burn, but when we look at statistics like that we find that that is precisely what it has been and that the hurt and resentment in the community caused by the GST are escalating, not diminishing, as time goes by. On that note, if it suits the convenience of the House, I seek leave to continue my remarks later.

Leave granted; debate adjourned.

Sitting suspended from 6.30 p.m. to 8.00 p.m.