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Thursday, 17 April 1980
Page: 1554

Senator KILGARIFF (NORTHERN TERRITORY) - My question is directed to the Minister representing the Treasurer. A major escalation in the cost of consumer and household commodities has occurred in the remote areas of the north and north-west of Australia because of huge freight cost increases directly related to higher fuel costs. In any future review of taxation will the Government consider recognition of this and other extreme disadvantages experienced by residents of these remote areas by, firstly, alleviating or eliminating the effect of sales tax levied quite inequitably on the freight component of costs of goods and, secondly, by reviewing substantially for the first time in decades the level of zone allowance rebates for taxpayers in remote areas of

Queensland, Western Australia and the Northern Territory?

Senator CARRICK -Cost increases, and particularly rising oil and fuel prices, have affected all Australians, not just those living in the more remote areas. For example, transport costs between and within metropolitan areas are incorporated in the price of goods sold in the cities, just as the cost of freight is incorporated in the price of goods sent to non-metropolitan areas. On an overall basis, a government must strive to see that its total economic policy produces a level of inflation which is lower than the rates of the countries with whom we trade and which allows us to trade outwards in the world. Our living standards depend on this.

It should be realised that Australia has not been able to isolate itself from world increases in fuel prices. To reduce overall fuel prices would serve to subsidise consumption of fuels, which is contrary to this Government's policy. We have sought a differential for fuel prices in cities and more remote areas. The Government has introduced the petroleum products freight subsidy scheme and now the gap is no more than 2c a litre. This is very generous; it costs about $123m a year. The freight component of the cost of goods should be eliminated from the base on which the sales tax is levied. The present sales tax is levied at the point of wholesale transaction and consequently the cost of freight to the wholesale distributor would be included in the base on which the sales tax is levied. Nevertheless, I will bring the substance of the question to the attention of the Treasurer.

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