Taxation: Building Industry
Database House Hansard
Date 04-11-1992
Source House of Reps
Parl No. 36
Electorate FORDE
Interjector Mr Tim Fischer
Mr Tuckey
Page 2553
Party ALP
Questioner Ms CRAWFORD
Responder Mr KEATING
System Id chamber/hansardr/1992-11-04/0030

QUESTIONS WITHOUT NOTICE - Taxation: Building Industry

Ms CRAWFORD —Is the Prime Minister aware of proposals to tax all inputs in the building industry? Does the Government intend to adopt these proposals? Can the Prime Minister say what effect this would have on the building industry?

Mr KEATING —The Government is not about taxing the building industry.

Mr Tim Fischer —You have; sales tax on the building industry.

Mr SPEAKER —The Leader of the National Party will cease interjecting.

Mr KEATING —What is exercising this industry is the very unfair treatment it would receive at the hands of a coalition government in the levying of a goods and services tax. We see the headlines: `Opposition set to hear advice on altering the GST', `Builders press Hewson for GST change', `GST confronts big hurdle in the construction industry'. Because the coalition, under its policy, does not permit the taxation of a construction as an end point tax on the end product of, say, a builder of a hotel or some sort of traveller accommodation, or some building, then all of the GST costs that go into the building are not deductable or rebatable; that is, the taxes on the pipes, the concrete, and all of the other fittings of the building are not a rebate against the end point tax because the Opposition will not have an end point tax. The industry has to wear this huge cost. That is why it is making it quite clear how unfair this policy is. It wishes that there be an end point tax and that then, if the building is used for office purposes or tourism purposes, the costs to the people who use it will defray the costs of the end point tax, which themselves defray the costs under rebates of the input taxation.

  So here is the Liberal Party telling us that it does not want to tax business inputs, and on one of the biggest industries in this country it is going to do just that: it is going to tax very heavily the business inputs; that is, the inputs in the development of office buildings, hotels and all other buildings. It will not give it the status of an end point tax and will, therefore, deny the builders of those buildings the benefits of eroding the impact of that tax and ameliorating it across the services which are then provided by those buildings, be they hotels or offices.

  The reason is that it punches another $2 billion hole in the GST, and those opposite cannot afford their already shonky economics to fall further. Here we have the major construction sector of Australia wearing now the input taxation on all the elements in a major building for which there will now be no rebate—

Mr Tuckey —A different tax would be better.

Mr SPEAKER —I warn the honourable member for O'Connor. If he interjects again I will name him.

Mr KEATING —The same problem existed in respect of tourism. As ATIA said, `Tourism is an export'. It is making it quite clear. Its first line said:

Dr Hewson missed the point. It is not narrow self-interest in being asked to be treated like other exports.

Mr Carmody from Access Economics said:

Why Dr Hewson is wrong on tourism and the GST . . .

This is planted across ATIA's front page:

Industry groups dig in to fight to the finish on concessions. Lib revolt brews over tourist GST . . .

And it goes on. The fact is that this has all been spirited off to the Cole committee. The Cole committee is now looking at these representations. It was set up as a sop to industries so that they could put their complaints. They are, of course, supposed to be heard and returned as policy by the Opposition.

Mr Tuckey —Mr Speaker, I raise a point of order. I refer to standing order 142 and standing order 145. Standing order 142 requires the question to be about matters for which the Minister or Prime Minister is responsible. Standing order 145 states:

  An answer shall be relevant to the question.

The question asked of the Prime Minister was what the Government was going to do. For about five or six minutes, which I have tolerated, he has talked about Opposition policy and shown a distinct lack of knowledge of how it works. Could he please tell us a bit about what the Government is going to do?

Mr SPEAKER —Order! The honourable member for O'Connor will resume his seat. The question was in order and the Prime Minister is in order.

Mr KEATING —He has given me time to re-arrange my papers. Thank you, Wilson! The Cole committee is supposed to come to terms with all of these conundrums in the application of this monstrous tax—the GST. We were supposed to get a report from this committee in March. Back in July we were told that the review would be completed and would be presented in August. At the beginning of September we were told the report would be finished by the end of the month. We are now into November and we have not seen a report. I saw this very pithy little comment in Inside Canberra which said this about the GST coordination office and the 300 submissions:

In business, many feel Dr Hewson and Mr Reith intend to keep on dealing with the GST office report until as close to the election as possible in the hope that, as the political climate hots up, business will be reluctant to go public on its concerns about Fightback for fear of being seen as entering into a political campaign.

The Cole committee is now doing a political job. It is now absorbing all of these submissions with all of these very difficult problems about input taxation. Instead of coming out and telling the building industry that it will not relieve it on input taxes, instead of coming out and telling the tourism industry that it has got no hope of relief, it is all lost inside this so-called Cole committee—

  Mr Brereton interjecting

Mr SPEAKER —Order! The honourable member for Kingsford-Smith will cease interjecting.

Mr KEATING —The Opposition will unveil it two or three weeks before the election. If any business dares to say, `Oh, look, this is unsatisfactory', the Opposition will say, `That is political. We will mark you down on our list. You shut up'. In other words, instead of doing the decent thing now and telling these industries that the Cole committee has considered the question of input taxation on the construction industry and is not going to accept their view, and let the Liberal Party account for the harshness of its GST tax and the enormous cost to the construction sector of this country and the tourism sector, no, they are holding out the promise that the Cole committee will consider it. Apparently Mr Cole is compliant in this procedure. His complicity in this procedure—

  Opposition members interjecting

Mr KEATING —Sir William! Sir William's complicity in this procedure means he is a party to the grubby politics of hiding from these industries the real impact of the GST. We say to the Leader of the Opposition on the construction industry, `Come clean, Dr Hewson. Come clean and tell them that the hundreds of millions of input taxation on buildings will not be rebatable. Come clean and tell the tourism industry that it is going to wear a large 15 per cent final tax on its export services, its internationally traded services', so at least when the people of this country come to think about you as an alternative government, they know what pernicious taxation you have in mind for them.