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Legislative Assembly for the ACT: 2000 Week 7 Hansard (27 June) . . Page.. 2061 ..

MS TUCKER (continuing):

The deal that the Democrats did with the government over the tax package was, in our view, a sellout of Democrat principles and did little to improve the regressive nature of the package. The Liberal-Democrat tax package is still fundamentally unfair and is unacceptable.

We support the conclusions of the Australian Council of Social Service that, while the revised package is fairer than the original because it gives a little more to pensioners, unemployed people and low and middle income Australians, it still gives too much to the well off. The package will therefore widen the gap between rich and poor and the whole nation will suffer from greater division between the haves and have-nots.

The package remains seriously flawed because, while some food is exempt from the GST, the definition is too narrow. Prepared meals, snack foods, confectionery, alcoholic beverages, soft drinks, takeaways and restaurant meals will be taxed. This includes sandwiches, pies, pizzas, frozen dinners, ice cream and the like.

To help pay for the exemption, regressive bank account taxes will remain in place for at least five years. Immediate financial compensation is being provided for low income households, but they are being exposed to a higher risk of future budget cuts in social security, health, education and welfare services.

The well-off remain the biggest beneficiaries of the income tax changes. Tax cuts for high income earners have been reduced from the $86 per week originally, but all taxpayers with taxable incomes over $60,000 will still gain an unfair tax cut of $62 per week, thus widening the inequality. A breadwinner on $20,000 a year will get tax cuts worth $540 a year. A breadwinner on $60,000 will get cuts of $3,222 a year.

The GST will also impact on the spread of knowledge. Books will be taxed for the first time. Within the education sector, books, stationery and research-related expenses will be taxed. There will be a higher cost of living for students.

The GST will also have negative impacts on the community sector. Charities and non-profit community groups will be taxed for the first time. Commercial activities of conventional charities will be taxed, for example, shops, mail order sales, fundraising dinners and fees charged which are more than 50 per cent of the market value for the service. For non-profit community groups that do not qualify as charities, most activities will be taxed, for example, membership fees, publications, fundraising, sponsorship, some course fees and fees for services.

On the environment side, Dr Clive Hamilton from the Australia Institute calculated that the Democrat-Liberal GST package will cause a sharp increase in urban air pollution and a 5 per cent increase in greenhouse gas emissions from the commercial transport sector.

There is to be an extra $3,223 million per annum in massive new tax cuts and incentives for diesel and petrol consumption. This is only 15 per cent less than promised in the government's original GST package. All trucks over 20 tonnes and rural-based trucks over 4.5 tonnes will get a reduction of 23c per litre in diesel prices. All business vehicles will get a 10 per cent reduction-7c per litre-in petrol and diesel prices.

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