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Thursday, 29 June 2000
Page: 16083


Senator COOK (Deputy Leader of the Opposition in the Senate) (8:01 PM) —I rise to speak on the A New Tax System (Tax Administration) Bill (No. 2) 2000 almost 28 hours before the GST is introduced into Australia.


Senator Ian Campbell —On the east coast.


Senator COOK —On the east coast. It is not that hour on the west coast, of course. While we are 28 hours short of the introduction of this new regressive tax into Australia, I take the interjection of my colleague and Western Australian senator Senator Ian Campbell that that is not true of the west coast and the state of Western Australia. One of the big advantages of being a Western Australian is that we do not get the GST until two hours later. Western Australians at least have some sort of holiday from this tax, which other Australians do not enjoy. The bad news is that, when Labor come to office and start rolling it back, we will not get the benefit of the roll-back until two hours later either.


Senator Ian Campbell —If Paul Keating had had his way, we would have had it in 1984.


Senator COOK —I take that interjection. It is the fanciful notion of the government that somehow or other Paul Keating was unhappy with the outcome in 1985. I would suggest that the parliamentary secretary stop making these nonsense interjections. I know it comforts him, but the fact that it is not true does rather defeat the purpose of it.


Senator Ian Campbell —You should read what he said at the time.


Senator COOK —No, it is just not true. I know Paul Keating well, and I know what his views on this are. They were best expressed during the 1993 election campaign, which was, as I recall, the election campaign that the current government `could not lose' but actually did. They lost it because the people of Australia rejected the Hewson version of the tax that we are going to have imposed on us in 28 hours—the Howard version of the GST.

This legislation contains a series of amendments to a bill that this chamber carried about a year ago. As we get closer to the dawning of the GST, and on the last scheduled sitting day of the Senate before the winter recess, we still find before us legislation from the government amending its own tax—and this is before the tax itself is implemented. We have now had over 2,000 amendments to the GST legislation. It is as if the government wants to try to confuse the Australian community deliberately. But the fundamental thing about these amendments that just keep on coming—and doubtless they will continue after the introduction of the tax—is that they change the rules. The big defence that the community has is that, if the government does not know what the tax law is supposed to be, how can taxpayers know what their legal obligations under the tax law are? As I have said, there have been over 2,000 amendments, and this legislation adds to them again this evening. We also have a couple of other bills to come on later tonight which will add even more to the number. If the government does not know what the tax law is supposed to be and if, at this late hour, with only hours to go before the new tax, we are still legislating change, how can the Australian Taxation Office, the body independent from the government but with the statutory obligation of administering the law, know what the law is in order to administer it properly?

That is not the end of the problem. The other difficulty of the Australian Taxation Office is that it is understaffed and, when taxpayers question it about their legal liability, it cannot advise them because the government keeps changing the ground rules. As the tax gathering authority, the ATO also cannot advise people because it has insufficient staff to deal with the technical complexity of formal advice as to what the meaning of the law is. Companies and individuals seeking tax rulings from the Australian Taxation Office find that there is a huge list and that they are well back in the queue. With hours to go until the new tax, we still do not know what the legal obligations are.

On Saturday, when this new tax comes into force, most Australians will be given a sharp jolt, a sharp reminder of what this tax is. As Australians wander off to their Saturday afternoon recreation and go to the Australian football, to the rugby league or to the races, as they go through the turnstiles there will be a new tax of 10 per cent that they did not pay last week but they will pay this week. As people go into the ground to buy the football budget or racing guide to see which players are in which teams or what horses are running, there will be a new cost on the guide of 10 per cent. They did not pay it last week, but they will pay it this week.

As they wander down to the stall to get a hot pie served to them during the interval of the races or of the football, there will be another new tax—10 per cent on the pie. And so it will go. If their kids want to wander over to the stall selling memorabilia for the sporting teams to buy a club jersey, a scarf or a beanie, what will they find? A new 10 per cent tax. They did not pay it last week, but they will pay it this week. This Saturday afternoon will be the time at which the real meaning of the GST dawns on Australians, as they recreate and enjoy their Saturday afternoon of leisure. They will be en masse confronted by a new tax for the first time.

The government, which luxuriates in the belief—emphasised tonight by the Prime Minister's demanding time to address the nation—that this tax will be good for you, will find that Australians on the first sampling will reject the package in even stronger terms than before. Australians know this Prime Minister said that there would never ever be such a tax and then went back on his word. He said that petrol prices would not rise, and we know they will. He told us that beer would be at a lower price than it will be across the bar now—in fact, it will be some 8c to 9c more expensive. The Prime Minister's record of deceit and dishonesty on this is now legendary.

What about the most famous commitment by the government concerning this tax—that the percentage of the tax will not rise? Australians are not dumb. One of the great things about Australians is that they see through cynicism and they see through propaganda. Any Australian knows that, in every country of the world in which a GST has been introduced, after its introduction the level of the tax has gone up. So, when the government says that it will not increase it to more than 10 per cent—and this is coming from a government that said that it would never ever introduce it in the first place—there is a massive horse laugh of disbelief as ordinary Australians once again say, `The government has it wrong.'

Before I turn to the legislation before us, I should remark on what I have just seen on television. The Prime Minister demanded access to the airwaves tonight to address the nation on the tax package. This is after the government has spent $430 million of taxpayers' money trying to publicise the tax in a party political way. As if that were not good enough, as if the government had not unchained the taxpayers' pockets and dipped into them to pay for the government's own blatant political propaganda, the Prime Minister went on the airwaves tonight to emphasise the message. If you listened to and watched what the Prime Minister said, apart from the dreary, boring monotone in which he addressed in an expressionless way the Australian community about such vital—using his term—tax reform, what did he say? He said all sorts of things which relate to an election campaign and very few which relate to the tax. He did not explain or sell the tax in any great detail. He used the air time for a party political propaganda broadcast. That is what tonight was about.

He started citing the government's economic record. One would ask what that has to do with the tax of the present. He went on and eulogised his own so-called prowess at economic management, but what does that have to do with the tax? Why should taxpayers pay for the government to tell them what it thinks its record is like when they are supposed to be being briefed on the tax? This was a blatant exercise in politics, and the sad thing is that this government has dragged down the level of public debate by abusing the powers of its office and using the resources of the tax office to fund party political propaganda. At least the brewers of Australia, who are running an ad with the slogan `It's your shout', attacking the government for the misrepresentation of our beer prices—and who are, in turn, being attacked by the government—can say that they are paying for the ad themselves. What can the government say? The taxpayers are paying for it.

If Labor keeps making poll points ahead of the government, the government will turn around and get more taxpayers' money to sell the message even more strongly. This is a disgrace to the national political scene, and it is the beginning of an insidious new approach of the government abusing its responsibilities to taxpayers and using their funds for party political propaganda. Tonight, we got all the old platitudes as if nothing had changed, as if it were not true that rents are going up, as if it were not true that petrol prices will be higher, as if it were not true that beer prices will be higher, as if it were not true that the government had promised that no business would go out of business because of the GST and as if it were not true that the government had promised that no-one would be worse off, when already many Australians are worse off and many more stand to be worse off.

The fundamental objection we have to this tax is that it is unfair. It hurts those in the most exposed and defenceless positions in our society the most. This is a percentage tax on almost everything, and the so-called compensation for it is in a tax cut which comes in gross dollar terms. Percentages go up with inflation. The value of a gross cut in taxation remains the same and, as time ticks by and as inflation kicks in, the value of the compensation erodes dramatically. Those that get the least compensation are hurt the worst, and they are the ones at the bottom of the scale. That is our fundamental objection to this tax, and we should never shrink from citing it as often as possible.

Let me turn to the provisions of the A New Tax System (Tax Administration) Bill (No. 2) 2000. The bill covers three broad areas of tax law: first, the rationalisation of administrative penalties across different taxes; second, the rules governing who can advise, prepare and lodge business activity statements on behalf of taxpayers; and, third, in a broad category, a plethora of miscellaneous amendments in areas including the new pay as you go or PAYG system, rounding down of tax debts, discretions concerning lodgment of the business activity statements and the imposition of general interest charged on outstanding debts. Broadly, that is what this bill encompasses. As I say, with only hours to go to the GST there are yet further amendments.

I will just address for a moment the rationalisation of administrative penalties across different taxes. This bill proposes to amend the various pieces of tax legislation to introduce a uniform administrative penalty regime that will impose penalties relating to statements and schemes, penalties for the late lodgment of returns and other documents, and penalties for failing to meet other tax obligations. As a matter of principle, it has to be said that Labor support the objective of a consistent regime across taxes for similar behaviour. The penalty should be the same for similar offences—a principle to which we adhere. However, whether or not the particular penalties proposed by the bill are struck at an appropriate level of penalty for the various categories of offence and for the differing circumstances is a very difficult judgment to make. For that reason, we sought to have an inquiry into the legislation.

The government's behaviour, in rushing this bill into the House of Representatives with very short notice, did not enable those in that chamber to consult sufficiently well enough with all of the stakeholders affected by these legislative changes. As a consequence—in the Senate, the house of review—it requires us to exercise great caution and discipline in examining whether these changes meet the level of consistency that we adhere to in principle. It is very difficult to say in the circumstances, and the conclusion is still an open one. However, the position of the Labor Party is that we will support this legislation.

We will support it because the government wants to make these changes to the tax law. When Australians reject the GST, never let it be said that this is not the GST that the government wanted; this is the GST the government wanted. By giving approval to these legislative changes, the government will not be able to escape the fact that this is its tax law as it desired it. Of course, when the wheels start to come off the trolley, the government will point the finger, as it has done over recent weeks, to the corner of the Senate chamber where the Democrats sit and blame them for forcing the government to make the changes that have already occurred in the tax act. It was a voluntary decision of the government to accept the Democrat changes and, by voluntarily accepting them, the government has to wear the pain of the complications that those changes bring. They boasted about it tonight as if it were originally the intention to exempt food and do a number of other things. They boasted about it tonight in this deliberately boring monotone of an address by the Prime Minister. Because they boast about it, they certainly have to cop the responsibility for it. Because we believe that the technical changes sought by the government should be supported so the government cannot blame Labor about this tax, and because these technical changes do go to the principle to some extent, we will therefore support them. I now indicate that.

I will not go to a greater consideration of the other parts of the legislation, other than to remark on the changes to the business activity statements. The business activity statements are the basis on which taxpayers in business interact with the tax office. It is effectively a summary of taxation liability that is to be provided regularly by the taxpayer, either monthly or quarterly—in general, quarterly for most small businesses. This then raises the issue about who will be able to advise, prepare and lodge business activity statements for taxpayers. This is precisely the same issue of who is allowed to lodge income tax returns now. Currently, this is restricted to tax agents and lawyers. This bill proposes to allow members of accounting bodies, tax practitioners and the bookkeepers working for them and persons that provide payroll services to be involved in business activity statement advice, preparation and lodgment. This is a broadening to some extent and it appears to have—at least in principle—the backing of a number of accountancy firms and the Taxation Institute. The need for broadening arises because there are not enough tax agents in Australia to deal with the reporting requirements of the government's so-called simplified tax system. As a consequence, we will support those amendments as well.

In conclusion, here we are again, only hours from the new tax system being introduced, adding additional administrative complexity. It is not a defence for taxpayers to say they did not know what the law is, but on this occasion the government just keeps changing the goalposts. How can the tax office be aware of all of the changes and advise those that seek private rulings? It is disgraceful that the government should have so botched the introduction of its so-called monumental changes to the tax system. But we have become used to the fact that the government just cannot get it right. This bill is proof again tonight that it is still making mistakes that it has to correct at the eleventh hour.