Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Monday, 11 November 1985
Page: 1900


Senator JESSOP(4.39) —It seems appropriate that we should be debating on 11 November this subject dealing with the detrimental effect on South Australians in particular of the high interest and taxation policies of the current Labor Government because 10 years ago actions on this day led to a massive endorsement of the Liberal Party under Mr Fraser enabling it to come to government with a record majority after the economic mess left by the Whitlam Government.


Senator Bolkus —I raise a point of order. I do not know what relevance this speech has to the matter of public importance. Senator Jessop is wasting time.


The ACTING DEPUTY PRESIDENT (Senator Bjelke-Petersen) —There is no point of order.


Senator JESSOP —I am not surprised that Senator Bolkus wants to interrupt me because he will get the serve that he deserves. The Premier of South Australia, parading in the euphoria following the Grand Prix-which was a very successful event; I enjoyed it and I congratulate the State Government on what it did-


Senator Collard —The cars were built by private enterprise.


Senator JESSOP —It was run by private enterprise. I do not want to detract from the race and be nasty about the Bannon Government but in the euphoria of the environment created by that event, the Premier has announced an election, hoping that this will distract the people of South Australia from the miserable record that he has established economically during the three years of his Government. But this fact remains in the minds of the people of South Australia. We must emphasise it to ensure that they do not forget what has happened over the last three years. State collections during the Bannon Labor Government years have increased by 55.2 per cent; an increase in excess of that in any other State in Australia during the same period-even in excess of Commonwealth taxes.

State charges in South Australia have risen, as has the State deficit. State instrumentalites such as the Electricity Trust of South Australia have had to raise tariffs, to the disadvantage of citizens, business and industry in South Australia. The major reason for the Trust having to raise its tariffs is that it has to pay at least a 5 per cent levy to the Bannon Labor Government on all its sales. This levy constituted a payment by the Trust to the Bannon Government of $25.6m for the year ending 30 June 1985. Over the last financial year the Trust has paid $52m in various taxes. Some $1m a week has to be found through Electricity Trust charges to pay the Bannon Government. This has to come out of the pockets of citizens of South Australia either through higher electricity charges or in higher costs for commercial services and goods. To rub salt into the wounds of the Electricity Trust, the Bannon Government's finance authority took over the negotiation of the Trust's outstanding loans and, as a result, the loans cost nearly twice as much as before. That is an example of the Bannon Government's abysmal record on the welfare of taxpaying South Australian citizens. Let us look at other matters that have been referred to. Senator Hill referred to the financial institutions deposits tax which in South Australia is higher than it is in any other State.


Senator Teague —The Liberals will abolish it.


Senator JESSOP —Exactly. Mr Bannon promised that he would not introduce any new taxes. As Senator Teague and Senator Hill said earlier, Mr Olsen, when in goverment, will abolish it. What about housing interest rates? That is a great record for the South Australian Government. Mr Bannon was encouraged by the Prime Minister (Mr Hawke) last week who said that people have to get used to higher interest rates. What an indictment of a Labor Prime Minister who inflicts high interest rates such as we are now experiencing on the average working man struggling to pay for his house. As an example, interest rates on housing have resulted in an increase in housing loan payments of 63 per cent in the last 12 months. My daughter used to pay $530 a month for her house. She represents a very average income earning family and she told me at the weekend that her payments have risen to $636 a month. Of course, Senator Crowley does not mind that. She is not interested in the well-being of young people with young children.


Senator Crowley —I am outraged.


Senator JESSOP —She is not interested; she shakes her head.


Senator Crowley —I take a point of order, Madam Acting Deputy President. I understand that under Standing Orders it is not appropriate to impute an unpalatable intention or motive to another senator. I object very strenuously to the implications in Senator Jessop's words that I do not care about people in South Australia having to pay.


The ACTING DEPUTY PRESIDENT (Senator Bjelke-Petersen) —You should not impute words to another senator, Senator Jessop. Would you please withdraw?


Senator JESSOP —I withdraw. But honour- able senators on both sides of the House can be excused sometimes for misinterpreting the appearances that flit across the faces of honourable senators opposite. One can be excused sometimes for interpreting them in the wrong way, which perhaps I did. We are talking about taxation. In South Australia and at the Commonwealth level we have Labor administrations. Labor administrations are renowned for discouraging foreign investment from coming into a State or the country simply because foreign companies do not trust Labor governments because Labor governments bleed those companies, individuals and private enterprises so severely that--


Senator Bolkus —I take a point of order. It is quite apparent that the honourable senator does not have much to say about South Australia. The issues of guidelines for foreign investment and the regulation of foreign investment fall within the province of the Federal Government. I do not know how the State Labor Government is responsible for it.


The ACTING DEPUTY PRESIDENT —Will you please keep to the subject, Senator Jessop.


Senator JESSOP —Madam Acting Deputy President, I remind you that I am quite in order in talking about high taxation and interest rates of current Labor governments in the plural. The honourable senator is a guilty person because he--


Senator Bolkus —I take a point of order. I am not guilty of anything and I ask for a withdrawal.


Senator JESSOP —I will not withdraw that because the Commonwealth Government is guilty and he is a member of the Government that I am attacking at the moment.

The fringe benefits tax will create tremendous problems for the motor industry, in spite of what Senator Foreman said. We have read recently that throughout Australia fleet owners, some owning up to 50,000 vehicles, will seriously curtail their purchase of vehicles for this reason.

Another example of how the fringe benefits tax will affect development in South Australia-this must be of concern to the South Australian citizens because it emanates from a Labor government-is the development of mining. I have notes here that I have received today from the Utah Development Co. Ltd. I will quote one or two points from the document:

Utah Development Company Limited, Australia's largest coal exporter, provides housing for 3,500 employees located either in towns adjacent to the six coking coal mines it manages in Central Queensland-

this is an example of the problems that mining companies experience in South Australia and in other parts of Australia-

at rentals ranging from $8 to $15 a week.

Utah estimates that the proposed fringe benefit tax could cost the mining operations it manages up to $10 million, depending on the Government's assessment of home rental values in the Central Queensland region.

These sorts of things are being imposed upon export industries that employ thousands of people throughout Australia; in this instance 3,500 people are housed in company homes. It continues:

Since 1980 individuals provided with housing by their employers in remote mining areas have been taxed on 10% of the deemed rental value of the house less rent paid, which recognises remoteness, lack of choice and other factors.

. . . .

The proposal is a corruption of the fundamental principle of fair and equitable taxation, because it sets out to tax the provider of the perceived benefit, rather than the recipient.

In other words, it is a tax on employment. It is quite interesting to note also that not only is the tax now to be levied on the employer and not the employee, but also the discount from deemed rental value to allow for remoteness, lack of choice, et cetera, is to be reduced from 90 per cent to 33 per cent, representing a gross discrimination by the Government against mining companies. It was important that I read those points and I seek leave to have the document from which I read incorporated in Hansard.

Leave granted.

The document read as follows-

UTAH DEVELOPMENT COMPANY LIMITED

THE FRINGE BENEFITS TAX PROPOSAL: REMOTE AREA HOUSING-UTAH'S POSITION

BACKGROUND

Utah Development Company Limited, Australia's largest coal exporter, provides housing for 3,500 employees located either in towns adjacent to the six coking coal mines it manages in Central Queensland, at rentals ranging from $8 to $15 a week. At the minesites single employees are provided with full board and accommodation for $15 a week.

Utah estimates that the proposed fringe benefits tax could cost the mining operations it manages up to $10 million, depending on the Government's assessment of home rental values in the Central Queensland region.

Several of the towns were constructed specifically to house mine employees in sparsely populated parts of the country, while others have been considerably expanded.

Since 1980 individuals provided with housing by their employers in remote mining areas have been taxed on 10% of the deemed rental value of the house less rent paid, which recognises remoteness, lack of choice and other factors.

BASIS OF UTAH'S OPPOSITION

Utah strongly opposes the Federal Government's proposal to introduce a tax on the employer on minesite accommodation provided to employees, for the following reasons:

1. The proposal is a corruption of the fundamental principle of fair and equitable taxation, because it sets out to tax the provider of the perceived benefit, rather than the recipient.

2. It is a tax on employment. The proposal jeopardises future development and potential employment within the industry.

3. The tax adversely affects the industry's international competitiveness. Every added cost disadvantages the Australian export coal industry which is trying to maintain its competitive position in over-supplied international markets.

4. The coal industry is Australia's largest export earner, with the potential to earn further significant foreign exchange, which would benefit Australia's balance of payments position. The Government's tax proposals will work against this potential.

5. Not only is the tax now to be levied on the employer and not the employee but the discount from deemed rental value to allow for remoteness, lack of choice, etc. is to be reduced from 90% to 33% representing a gross discrimination by the government against mining companies.

UTAH's POSITION

In the 12 months to May 31, 1985, Utah estimates that the level of taxes and charges paid to governments by the owners of the Central Queensland mines it manages reached around 79% of total income, before payments of taxes and other government charges.

These taxes included payment of a Federal Government Coal Export Duty which amounted to over $60 million for the 12 month period.The Utah-managed mines are now the only ones in Australia paying this highly discriminatory duty, which is in effect a tax on efficiency.

Utah urges the Federal Government to abandon its proposal to impose yet another tax which impedes the Australian coal industry's ability to remain internationally competitive, and jeopardizes future development and employment potential. Utah also asks that as part of the Federal Government's reform of the taxation system to eliminate unfairness and inequities, the Coal Export Duty be removed.


Senator JESSOP —I thank the Senate. I heard Senator Foreman extolling the virtues of the Bannon Government in developing the Olympic Dam ore deposits at Roxby Downs. I remind the Senate that that particular project was able to commence because of an indenture Bill that was passed by the Tonkin Liberal Government. Very sadly, there was only one member of the Australian Labor Party who had the foresight to assist in passing that legislation through the Legislative Council; that was `Stormy Normie' Foster. What was his reward for contributing to the development of South Australia? What was his reward for establishing a potential export earning capacity in South Australia? What was his reward for contributing to a project which provides and will provide thousands of jobs directly and indirectly? His reward was expulsion from the Labor Party. His family was threatened over the phone by-


Senator Bolkus —Who by?


Senator JESSOP —I could say who it was but I do not want to say. But I know very well who it was and Senator Bolkus may know to whom I am referring. But the reward he got for looking after the interests of development in South Australia was expulsion from the Labor Party. Thank heavens that our Party does not adopt that sort of dictatorial, dogmatic, unfair approach to its members when we want to demonstrate independence. It is a disgrace. The people of South Australia will remember on 7 December just which party is interested in the development of that State, in the provision of job opportunities, in the reduction of interest rates, in the encouragement of private individuals and private enterprise to get on with the job of developing South Australia, restoring it to its proper place in Australia and lifting it out of the situation in which it is in-of becoming dependent on handouts from the Commonwealth.