Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answer given by the Minister for Broadband, Communications and the Digital Economy (Senator Conroy) to a question without notice asked by Senator Colbeck today, relating to taxation.

Not only are Labor not ready with some of their taxation measures but they do not even know that they are not ready. I am not sure whether we are dealing with known unknowns or unknown unknowns, but it was pleasing to see that during question time the Minister for Broadband, Communications and the Digital Economy scurried around to find out exactly where the government are with respect to the supporting legislation for their $3.1 billion tax grab on ready-to-drinks.

We have already heard through the Senate inquiry that this particular tax proposal is not supported by the evidence. It is not supported wholeheartedly by health officials. In fact, in today’s Canberra Times Dr Tanya Chikritzhs said:

Low-risk drinkers preferred ready-to-drink products commonly called alcopops but straight spirits were the alcoholic beverage of choice for teenagers who drank to excess.

We heard during the inquiry into alcopops that this is not a measure that on its own is going to address binge drinking. It is not a health measure, as it has been dressed up to be. It is in fact a tax revenue measure. The government have come into this place and into the other place and criticised the opposition for holding up their legislation. But in fact they did not even know themselves, when asked on two consecutive days, where their own legislation was in respect of a measure that is going to raise $3.1 billion over five years. The government have very convenient memories. They forget how many times they have referred legislation to committees themselves. They forget how many times they have referred budget measures to committees themselves, yet they come into this place and accuse the opposition of all sorts of terrible crimes against their budget. But for two days running they have not been able to answer a very simple question: where is the enabling legislation with respect to the tax on alcopops?

It really does beggar belief that they would impose a tax such as this when the decision has been taken outside all of their own decision-making processes. As we indicated during the debate on the committee report, the government have set up the Henry review to look at taxation, and yet this decision has been made with no reference to that. They have set up a process under COAG to look at the issues surrounding the misuse of alcohol, and yet this decision has been made with absolutely no reference to that. Then, when they are asked where the legislation is to support it, they have no idea. Even when they are given a day’s notice they have no idea. They come back in here for a second day running and have no concept of what is going on. They have to scurry around for an hour during question time to come up with an answer.

All the government have told us is that they may bring the legislation in within 12 months. Yet they tell us that we are economic vandals for holding up the processes with respect to the budget. This is a significant budget measure. It raises $3.1 billion. I am pleased that they have taken the appropriate legal advice to see what might happen. But I do know that the industry are saying to consumers, ‘Keep your receipts,’ because it may be that the government have to give the money back. A significant amount of money—in the hundreds of millions of dollars—will be raised in the first year, and yet it could be up to 12 months before the government decide to bring this legislation in. You just have to wonder: are they waiting until they might have a better chance? It has been interesting to note the comments of the crossbenchers in recent days that they too are having doubts about this measure. We have heard the concerns of the Democrats and the Greens in the debate and we understand quite well that others have similar concerns. (Time expired)

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy President, or perhaps I should congratulate you as ‘Mr President in limbo for the moment’—a matter you obviously take very seriously. In taking note, can I follow Senator Colbeck’s comments today and reflect, in part, on Senator Conroy’s answer provided to the Senate. Senator Conroy indicated that the government has issued drafting instructions for this measure and, in listening to Senator Colbeck, you might have been confused about whether that was indeed the answer provided. Senator Conroy indicated that, consistent with the provisions of the excise and customs legislation, revenue can be collected for 12 months from the time the tariff alterations are proposed in the parliament or until the close of the parliamentary session—that is, until the next election—whichever occurs first.

Senator Colbeck provided appropriate advice, which is that people potentially affected by this measure should keep receipts, and indeed they should. But the hypocrisy indicated from the other side on this matter is astounding. Is Senator Colbeck suggesting that, during the term of the Howard government, similar things never occurred? I think he will need to consult the record on that. I can think of several. But it brings me to one of my favourites. My favourite is the government’s childcare measures in the lead-up to the 2004 election. If you are looking at the approach by different governments to tax systems—as indeed we are in referring to the Ken Henry review and other matters—you will see that it was the first and only occasion, of which I am aware, where the government introduced measures that were not to apply until the tax year after the year in which the expenses occurred. I invite senators on the other side to give me an example of a similar measure in our taxation history, and I think they will struggle.

In taking note of Senator Conroy’s answer today, Senator Colbeck gives me the opportunity to reflect more broadly on the Ken Henry review. I have had some time in the last few weeks to look closely at that review as we dealt with the fringe benefits tax issue and the issue of concessions available to charitable and not-for-profit organisations. I am extremely pleased to reflect on the breadth of the review that has been established. Senator Stephens will recall that she inherited a review that I attempted to establish in the Senate some years back when, unfortunately, other priorities overtook our attempt to take an early look at some of the issues that the Ken Henry review will now address. Labor have indicated for many years that a comprehensive review of our taxation arrangements is urgent. That is not to say that the government should stand back from taking measures such as those applied to ready-to-drink beverages, but we are looking at this issue far more comprehensively and more broadly. My favourite aspect of the Ken Henry review is indeed at point 2, which states:

Raising revenue should be done so as to do least harm to economic efficiency, provide equity (horizontal, vertical and inter-generational), and minimise complexity for taxpayers and the community.

Significantly, we should also be looking in this review at improvements to the tax and transfer payment systems for individuals and working families, as well as those for retirees. Aside from simplification issues, we are addressing not only the key transfer issues, the relationships between our social security system and our tax system, but also such issues as customs and excise relating to ready-to-drink beverages.

I took the opportunity during question time to have a quick look at the report of the Senate Standing Committee on Community Affairs on this matter. They do indeed highlight the need for the Ken Henry review to address broader issues. I think some of the suggestions that Senator Murray made in his report, though, are also worth noting:

I look forward to Labor in government being able to address issues such as lower alcohol ready to drink beverages, tax and excise issues in relation to that area, and indeed wine as well can be a part of a much broader …

(Time expired)

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

Question time today presented a cipher of all that this government seems to be doing when it comes to its policy on taxation. Here we have one of the most significant tax measures, worth $3.1 billion, which this government has announced—it came out of the blue; it was not on its agenda before the election—on users of ready-to-drink alcoholic products. The measure was introduced by way of a regulation in April this year. The minister was asked, ‘When will we see the legislation whereby parliament is able to confirm that this tax should be imposed?’ The minister said: ‘I don’t know; I can’t tell you. It’ll happen at some point, and I’ll get back to you about that.’ An hour later, at the end of question time, the minister rises and says he will table the legislation in due course. To me, that indicates the kind of shambolic approach this government has been taking in general to taxation issues and the planning of its budget.

This particular tax is a good example. It was not announced in the lead-up to the last election. Mr Rudd had a plan for Australia—a way of being able to deliver on all sorts of important social changes. He did not mention to Australians that he was going to increase taxation levels on ready-to-drink alcoholic products. And bear in mind that that same committee report that Senator Collins was just quoting from indicated that the majority of people who are consuming these products are not adolescents; they are older Australians who, for the most part, are using these drinks responsibly. This out-of-the-blue burden on these drinkers was not announced at all before the election. Suddenly, in April, a new tax is announced on these products and a measure is put in place to allow it to occur but, in terms of the legislation, we do not see any follow-up that will make that possible.

There is serious concern here about how much money the government will collect before its actions are vindicated by an act of this parliament. This financial year, 2007-08, the government, under this proposal, will collect almost $100 million in tax, without the legislative base for that passing through parliament, with the real possibility that, if the parliament does not endorse this particular measure or endorses it in a different form to the one the government puts forward, we might see the government, possibly, having to refund money to those Australians who paid that tax. It is a bizarre circumstance which, apparently, has not been foreshadowed or adverted to by this government. It is a chaotic approach to budgeting across the board.

So many measures announced in this budget were not foreshadowed to the Australian community before the last election, like the taxes on alcopops and luxury cars, the increase in health insurance rebates and the gutting of the solar panel rebate system. The effect on this city particularly is very concerning. In my community we are seeing the failure of the government to identify areas where, as Senator Conroy put it in question time today, wasteful spending was occurring, which means that the government has moved over to areas where painful and unnecessary cuts are having to be made. So we are seeing cuts to the national institutions based here in Canberra: the National Library, the National Museum, the Australian War Memorial and the National Gallery. Where did that come from? Where were the announcements about that before the last election?

These things are happening because you people have discovered that there is not that much wasteful expenditure that you could easily lop off in order to make these sorts of policy changes in your budget. You are having, as a result, to go back and cut things which are much more important to the Australian people than those things that you previously suggested were there to be cut easily. So we are seeing cuts to the CSIRO and to innovation programs. Commercial Ready is going out the door. We are seeing extra burdens on Australian drinkers. We are seeing, as Senator Fielding suggested today, extra government taxes on petrol. We are seeing all sorts of burdens on the Australian community of which no notice was given before the election in November. This is a very serious turn of events and it indicates the shambolic approach this government takes to taxation. (Time expired)

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I place on record my congratulations and thanks to the President of the Senate for the way in which he presided over this chamber, the way in which he conducted himself and the advice that he has made available to all of us. Taking on the points that have been brought up in this taking note of answers debate, it never ceases to amaze me how the people on the other side come into this chamber and lecture us about budgets and responsibility. If you look at the budget we brought down, with a $22 billion surplus, you will see that we are showing the economic credentials to be a good government that is going to balance the budget and have a surplus, while having to deal with the inflation that we inherited from the previous coalition government.

I remind the Senate that the now opposition, which was in government for 12 years—very long years as far as the community was concerned—did nothing in the way of reviewing the taxation system. We have now instigated the Ken Henry review. That is going to be a wide-ranging review, which will impact on the Australian community. Having worked alongside Senator Humphries on the Senate Standing Committee on Community Affairs, I know that he knows only too well the sorts of issues that are going to be addressed by that review. One of those issues concerns Australian pensioners—a very important one. Because of the plight of single pensioners, I am most interested in what will come out of this review in regard to how we can better assist them.

Talking about budgets and taxation, I remind the Senate of the burden left by the Howard coalition government on Australian families and how Australian working families are struggling to make ends meet, whether you are talking about grocery prices, petrol or, more importantly, the family home and interest rates. How many interest rate rises did we have under the Howard government? Was it nine, 10 or 11 consecutive interest rate rises? All of those had a huge impact on Australian working families. But the Rudd Labor government are delivering on all its election promises. I know they do not want to hear that on the other side. When it comes to personal income tax, childcare costs and education costs, we are delivering on all of those for working families. We are taking very, very important steps to ensure that Australian families have the best opportunities ever to own their own homes.

Talking about election commitments and budgets, I remember, as do the Australian community, that the Howard government, when it was election time, had to be asked, ‘Was it a core promise or a non-core promise?’ One thing the Australian people remember, as we do on this side, is that the Howard government failed to deliver on many of its election promises. We on this side of the chamber—the Rudd Labor government—have articulated a five-point plan to address the inflation that we inherited. We have brought down a budget surplus. We have encouraged private savings. We are addressing the skills crisis that we were left. For 12 long years we had to put up with the Howard government, and we are paying the price for that now. The Rudd Labor government are investing in infrastructure. All of these measures are there to address the inflationary pressures that the Australian community are facing, which, as I said, were one of the worst legacies left by the Howard government.

In regard to the ready-to-drink liquor issue in this taking note of answers debate, let us say that this taxation measure is only one measure. We all know that there are serious concerns in relation to binge drinking. But, like I said, this is not something that has just manifested itself within the community; it has been there for a long time. Once again, it has been left to the Labor government to start addressing these real issues that Australian families are facing, particularly when it comes to our young people and their plight in all sorts of circumstances. Something that is of great relevance to us Tasmanians is the investment that this government is making in our health system—unlike the previous government, where there was huge neglect. I reiterate: when it comes to budgets and delivering on our election promises, the Rudd Labor government—(Time expired)

Question agreed to.