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Monday, 27 September 1993
Page: 1162

Senator IAN MACDONALD (3.45 p.m.) —The motion moved by Senator Childs seeks to extend the time allowed for presentation of the report of the Standing Committee on Industry, Science, Technology, Transport, Communications and Infrastructure to 18 October 1993. I intend to move an amendment to this motion to extend the time for presentation to 30 November 1993. I want to make a couple of very brief points about the reason for the amendment.

  The revenue raising measures contained in the Taxation (Deficit Reduction) Bill and the fringe benefits tax on business travel will not take effect until 1 April 1994, so delaying the reporting date of the committee to 30 November will have no effect whatsoever on revenue. In any case, there is a lot of evidence from the industry that this budget has no implications for revenue. In fact, a lot of work is being done by many people in the tourism and accommodation industries which suggests that the contrary will be the case.

  There is some material in existence which suggests that, as a result of employment losses which will follow any fringe benefits tax on business travel, the federal budget deficit is likely to be increased both because of lower personal income tax collections and because of higher outlays on unemployment benefits. It is suggested that instead of the claimed reduction of $60 million in the first year presented in Budget Paper No. 1, Statement No. 4, these consequential job losses could actually increase the deficit by as much as, or even considerably more than, that amount. Extending the reporting date by a few extra weeks will certainly have no impact upon the budget at all.

  The fringe benefits tax matter has been referred to the standing committee which, according to its current schedule, will meet this Friday to hear evidence from the industry, the minister and the department. Unfortunately, the limits above which fringe benefits would be paid on travel and business allowances are not specified in the bill. That is something that will be determined by regulation at a later date. This bill has caused a lot of concern in the hotel and tourist industries and associated industries because of the expected loss of jobs and revenue and because of the compliance costs of filling in the forms and doing what needs to be done.

  The government has sought information from the industry and has consulted fairly widely on what that limit should be and if the limit should be there. That government inquiry—it is something the government is doing; it is not part of the Senate inquiry—has requested that evidence be submitted by 30 September. No doubt, once 30 September comes the government will consider all of that information and will then determine what the limits should be. It is my suggestion and the suggestion of the Liberal and National parties that, having heard what the government has proposed on that limit, the standing committee should then consider that limit, should then perhaps invite further evidence from the industry and should then be able to come to this parliament with a recommendation on this very important matter.

  It is a very important matter because there have been suggestions that up to 20,000 jobs could be lost. There has been some evidence that the profitability of the industry would be quite severely damaged; that investment in hotel accommodation—this is very important with the Olympic games coming to Sydney in the year 2000—could be stopped, and already there is evidence that building projects worth upwards of $30 million have ceased.

  As I mentioned earlier, the revenue is not there. The government has assumed that if these proposals are introduced people will keep using business accommodation and travel in the way they did before. That is not the case, of course, as has been shown with the luxury car tax. So the revenue being anticipated by the government is not there. The quality of the Australian product in the hotel and travel industry, in terms of the international competitiveness, would fall, and conferences and meetings would be hit, if this legislation goes through as proposed, as they would be enticed to go offshore, undermining the viability and effectiveness of these facilities.

  There are alternative ways of addressing any problems that the government foresees with regard to a very few people rorting the system, and no doubt these will be made available to us, evidence will be given on them and suggestions will be made by the industry this Friday morning. I urge the Green senators and the Australian Democrats to support this small extension of time to enable the government to complete its inquiry into the limit of allowances for business travel and accommodation; to allow it to come up with a suggestion; to allow the industry to have a look at that and determine whether the problems it now foresees would still be there if those limits were adopted; and to allow industry to make any other submissions it might like to make on those particular proposals by the government. It would seem to make the work of the committee much more effective if we were to report back after a time when the government had given some indication of what that limit might be. I urge the Democrats, the Greens and the government itself to allow that extension of time in reporting back so that we can properly investigate all these things on the committee.

  I re-emphasise that the legislation is not scheduled to come into effect until 1 April 1994, so any delay to 30 November this year will in no way affect any revenue that might be gained. There is some real doubt as to whether there are any revenue implications at all. It will not be holding up the budget bills. I know the Democrats were a little concerned that it might be seen as doing that, but it will not because, as I said, the bills do not take effect until 1 April 1994. But it would allow the committee to make an informed and intelligent assessment and recommendation after the government had come to the industry and said that the limit it is proposing is such and such a figure. So there is no detriment. We are not holding up the government bills. We are not delaying the government in any way. But it would allow the committee to more effectively and efficiently complete its task. I move:

  Omit `18 October', substitute `30 November 1993'.