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Legislative Assembly for the ACT: 2000 Week 7 Hansard (27 June) . . Page.. 2063 ..

MR STANHOPE (continuing):

community and on small business. Most of all, we are concerned about the blatant inequity of this tax.

The GST will apply a tax to goods and services that have not been taxed before. It is true that it will apply to some goods that have been taxed before and in some cases will reduce the tax applied. There will also be reductions in income tax. But the GST is an unfair tax and those reductions do nothing to address this unfairness.

The GST will apply to new houses and furniture. It will apply to skin creams and first-aid kits. Most infamously, it will apply to tampons. It will apply to prams and cots, it will apply to school uniforms and shoes, it will apply to electricity, it will apply to gas services, and it will apply to telephones.

It will not apply to the so-called basic foods, but it will apply to many food items, creating a nightmare for the consumer and retailer alike.

It applies also to all the attributes and accoutrements of a wedding. It applies to funerals. It creates a nightmare overall. Current and realistic estimates are that prices will rise by as much as 6.7 per cent. This is where the injustices begin to surface: prices will go up by 6.7 per cent and pensions by 4 per cent, but only until March 2001. That is equity Liberal style: prices up 6.7 per cent; pensions up 4 per cent.

There will be income tax cuts, yes, but bigger cuts for higher income earners and smaller cuts for lower income earners, eaten up already by interest rate increases flowing from the GST and before we take account of the price hikes on goods and services. The only winners from the GST will be people on incomes well above average weekly earnings. That is equity Liberal style.

Education was to be free of the GST, said Mr Howard. Private school fees will be GST free, but it will apply to school uniforms, to exercise books, to pencils, to school bags and to all the other essentials of education. It will apply to most school excursions. Community groups will even pay GST on the hire of sports grounds: more and more equity Liberal style.

The GST will apply to small business as well. Small business people, of course, not only will have to pay GST on goods, but also will become the government's tax collectors. The GST is the major concern facing the small business sector. It is the small business sector that is struggling with the lack of quality information now and will have to struggle in the future with compliance costs and the effect on cash flows.

Indeed, a study undertaken for the New South Wales Department of State and Regional Development highlighted the impact of the new tax regime on small business, using a series of case studies-a jewellery retailer, a small manufacturer with export markets, a smash repairer and a business that installs and repairs airconditioning. Any of them could operate in the ACT.

The study revealed a range of implementation costs, dependent in part on the nature and size of the business, but in each case reaching into the thousands of dollars. It is obvious that all businesses will have to commit significant time and training to implementation. These are hours of business forgone and the nature of small business inevitably means

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