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Bailey rebuffs Brough on GST and tourism.

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Joel Fitzgibbon MP

Shadow Assistant Treasurer Shadow Minister for Revenue Shadow Minister for Banking and Financial Services

29 April 2005

Bailey rebuffs Brough on GST and Tourism

Minister Bailey publicly disowned Minister’s Brough’s proposal to impose GST on foreign tour operators (FTOs). This comes after Government Senators also backed away from Brough’s proposals at a Senate hearing on Tuesday. Senator

Brandis called on industry representatives to put forward amendments. And Senator Watson forced Treasury to concede that alternative proposals could fix problems with the current law.

This is a very public rebuff for Minister Brough. Clearly his Bill was ill-conceived.

Labor supports moves to close the loophole that allows FTOs to claim input tax credits while they don’t remit GST on foreign tour packages. But the proposed cure is worse than the disease.

It is too far reaching and will impose GST on services that have nothing to do with Australian consumption (like international reinsurance contracts). The Tax office could not enforce it as it has no jurisdiction to conduct an audit on FTOs. Concerns have also been raised about possible breaches of the Trade Practices Act. There has been no consultation on the Bill.

Minister Brough is becoming a serial offender with taxation legislation. Bills are often poorly drafted and pushed through the Parliament too quickly without sufficient consultation.

Again it falls to Labor to try to correct Minister Brough’s bungling.

29 April 2005

Contact: Brendan Long 0408421447