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Legislative Assembly for the ACT: 2000 Week 7 Hansard (27 June) . . Page.. 2071 ..

MR OSBORNE (8.57): I wish to make two brief comments about the Commonwealth goods and services tax and it seems that this is as good a time as any, given that other members are making substantive comments here. The first is that I want to place on the public record my opposition to the GST. I appreciate that it is essentially a matter outside the bounds of this parliament and our old tax system did need to be extensively reformed, but a GST was not the only option available to the Howard government.

I believe that, once it is up and running, the GST will fail to live up to its supporters' high expectations in several key areas. The most recent experience overseas shows that, regardless of what controls are put in place, prices will rise when they ought not. This has been especially true in both Canada and New Zealand. They found that it is not possible for government to tell a business what it must charge for a service. They also found, as I suspect we will too, that the sheer number of business transactions across the country was a problem for those who were monitoring the situation.

In the Australian model, some of the GST's weaknesses and inequities have already been exposed, such as an expected rise in the price of petrol after being repeatedly assured that there would not be one. I believe, Mr Speaker, that it is unrealistic to expect a massive decrease in those transactions commonly referred to as the black economy, where jobs are done for barter or cash, thus falling outside the tax net. There may be some gain in tax revenue from this type of economic activity as a result of the GST, but in New Zealand, especially after a couple of years, people just became more cunning in this area and those gains substantially diminished.

My second comment refers to how this bill fits into the confusing puzzle of tax legislation in the ACT. This bill is one of several GST-related tax bills that are before the Assembly today. I note that the Treasurer intends to amend this bill rather than proceed with the amendment to the Interpretation Act that he had originally intended. I have to admit that I find that rather intriguing. It now appears that, despite the Treasurer's protest to the contrary, the Interpretation Amendment Bill is not necessary to fix up any shortcomings in the territory's ability to cope with the introduction of the GST.

Members will recall that the Interpretation Amendment Bill provides for taxation measures to be levied other than through this parliament. We have already debated the fallacy of allowing such a practice and looked at the history of taxation law going back as far as King Edward I, over 700 years ago. He established the so-called Longshanks principle of restricting tax initiatives to those that have been approved by parliament.

I do not wish to move the debate away from the bill before us, other than to say that the Treasurer has a fairly short memory on this matter. His passion for defending our current tax system whereby taxes are included in fees and charges established by a disallowable regulation is exactly the opposite of what he was saying in opposition a number of years ago.

Over the past 30 years the ACT had gone from prior parliamentary approval of tax initiatives to imposing them by regulation for a specified period of disallowance. The Treasurer now believes this practice to be the gold standard, but I draw his attention and the attention of this Assembly to two newspaper articles from 1989. The first, headed "Tax laws are unacceptable", is from the Canberra Times, and I quote:

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