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Tuesday, 25 September 2001
Page: 31391


Mr SLIPPER (Parliamentary Secretary to the Minister for Finance and Administration) (5:16 PM) —It certainly will not come as any surprise to my friend the honourable member for Wills that the government does not accept the amendments moved by the opposition to the Taxation Laws Amendment Bill (No. 6) 2001. The opposition's amendments have nothing to do with the measures in the bill and only seek to make the GST more complex. There are many organisations on the record saying that more exemptions mean more complexity. For example, the Australian Financial Review reported tax counsel Paul Drum of the Australian Society of Certified Practising Accountants as saying:

Each product exempted from the tax implies additional compliance burden to ensure it is accounted for appropriately.

Business knows that exemptions mean complications, and what they want is certainty and stability. Even John Della Bosca said that roll-back should be abandoned. He got sacked for saying that. The question to ask Labor members in relation to GST amendments is: where are the funds coming from to pay for roll-back? Labor do not have a clue as to how they are going to pay for roll-back and `noodle nation'. They are getting increasingly desperate for money to pay for their spending plans—which explains some of their recent `funny money' proposals for raising revenue. The member for Fremantle publicly advocated education bonds to pay for knowledge—or `noodle'—nation and Kim Beazley told the Financial Review that he is looking at `mezzanine finance'. They are all just fancy words for going into debt.

Labor could also increase income taxes. We all remember Labor's record on income taxes; we remember it as though it were yesterday. The ALP spoke of its l-a-w law tax cuts before the 1993 election. What happened after the election? The l-a-w law tax cuts were abandoned, wholesale sales taxes were increased, fuel excise was increased by 5c a litre and company tax was increased to 36 per cent.

Members opposite referred to their amendments in relation to sanitary products, funerals and caravan parks. With respect to sanitary products, I point out that complexity and compliance difficulties will be faced when determining what sanitary products are GST free under the opposition's proposed amendment. Every exemption adds to the complexity of the tax system and creates new anomalies. The benefit of tax reform comes from applying GST broadly to as many items as possible and cutting income tax—which puts money back into the hands of taxpayers so that they are better off even after price rises. Due to the nature of a broad based tax, only a specific range of health related goods are GST free. These include a wide range of medicines and goods specifically designed for people with an illness or a disability that are not ordinarily used by people without such an illness or disability. Feminine hygiene products do not meet these criteria and are subject to the GST. The government acknowledges that sanitary products are essential items, but the government's policy is not to tax or exempt items on the basis of whether they are essential.

The amendments proposed by the opposition with respect to funerals are poorly defined and will create definitional problems, complexity, anomalies and uncertainty. For example, the proposed amendment seeks to remove GST from funeral services. Under the amendment, funeral celebrants would have GST-free services, whereas marriage celebrants' services would be taxable. Venues would be taxable if provided for weddings but GST free if used for funerals. Flowers would be taxable if provided for weddings but GST free if used for funerals. The proposed amendment would create anomalies and complexities and would, quite frankly, be a dog's breakfast.

Since the start of the GST, caravan park owners have had the choice between charging a concessional 5.5 per cent GST on their long-term accommodation and claiming full input tax credits or not applying GST to rents, which means they cannot claim input tax credits. Input taxing is the treatment that applies to residential rents. The government has ensured that long-term residents of caravan parks and other forms of commercial accommodation are treated fairly when compared with residents who rent a house or flat. The opposition amendment would make caravan park and boarding house accommodation GST free. This is giving a concession to those residents that is not available to other people in rental accommodation. The opposition proposals are yet another dog's breakfast. I oppose the amendments and move:

That the question be now put.

Question put:

That the amendment (Mr Kelvin Thomson's) be agreed to.