Residential Park Rents Goods And Services Tax
Debate resumed from 28 February.
Ms LEE RHIANNON [2.47 p.m.]: Yesterday we were part way through the motion moved by Ms Burnswoods concerning a goods and services tax [GST] on people living in residential parks on a permanent basis.
The Hon. Dr B. P. V. Pezzutti: Point of order: When Ms Lee Rhiannon refers to members of the House she should use their proper title. The proper title of the Hon. Jan Burnswoods is just that. It is not "Ms Burnwoods" or anything like that. It is "the Hon. Jan Burnswoods" and you, Madam President, should insist that the proper title is used.
Ms LEE RHIANNON: To the point of order: This point comes up periodically. I am the only one in this House not known as "the Hon.". I was given that dispensation because it is actually not a legal requirement. I will outline the reason why I chose to do that in a speech during the adjournment debate. It basically has to do with the position of colonialist Britain, which I think we need to rise above. I most definitely respect traditions. However, my choice not to use the honorific is part of what I perceive as the need to make the Parliament more people-friendly rather than persist with the elitist way it works. In terms of addressing people, I do it respectfully and I will continue to do it the way I have been doing it. I understand that I am not doing anything incorrect.
The Hon. M. R. Egan: To the point of order: This is truly a dreadful moment for me because I am about to agree with Ms Lee Rhiannon. I think it is the first time since she has been here that I have done so, and I hope it is the last. But I, too, find the title "the Hon." a bit antiquated. We are entitled to it by royal warrant, as I understand it. It is interesting that the spelling of the word "honourable" depends on whether one is a current sitting member or a retired member who has applied to use the title after retirement. I think it should be a matter of choice. I do not find anything insensitive about a member referring to another member as, for example, Ms Jan Burnswoods. I am happy to continue to refer to members as, for example, the Hon. Jan Burnswoods, but I can understand that others do not think it is appropriate.
The Hon. Dr B. P. V. Pezzutti: You have got to change the standing orders to do it.
The Hon. M. R. Egan: I don't think you do, do you?
The Hon. Dr B. P. V. Pezzutti: You do have to change the standing orders to get that done.
The PRESIDENT: No.
The Hon. J. H. Jobling: No.
The Hon. M. R. Egan: Your whip is telling me that you are wrong. It is not the first time that the Hon. Dr B. P. V. Pezzutti has been wrong. I think it is time we moved into the twenty-first century.
Reverend the Hon. F. J. Nile: State senator?
The Hon. M. R. Egan: Absolutely not. There is no way in the wide, wide world while I am Leader of this House and we still need the Executive to approve legislation that we will ever be called senators. Brian Vaughan once wanted to do that. For once, as I say, I think Ms Rhiannon is right. We should move ahead with the times.
Reverend the Hon. F. J. Nile: If you make that change we can start using the words State senator.
The Hon. M. R. Egan: Yes, but nobody else will use it.
Reverend the Hon. F. J. Nile: Yes they will. If you drop "the Honourable" we will use "State senator".
The Hon. M. R. Egan: Have a try if you like but you will only be mocked for it.
The Hon. J. H. Jobling: To the point of order: The form of address and tradition of the House, irrespective of whether it comes from old English traditions, is, and has been, to address members by the title of "the Honourable". The question being discussed about the way members may be referred to in Hansard as, for example, the Hon. Jan Burnswoods, is another matter. If the Hon. Lee Rhiannon wishes to be addressed as Lee Rhiannon that is her choice, but it is not for her to determine how other members shall be referred to. It is an individual's choice and unless and until they do that the forms and protocol of the House suggest that members should be addressed as, for example, the Hon. Jan Burnswoods. If the Leader of the House wishes to be called, as he suggests, Mr Egan I do not disagree because it is his choice and most people would concur. The propriety and protocol is such that members choose, and they say they wish to be addressed in another form. I contend that the Hon. Lee Rhiannon is incorrect and that the point of order should be upheld.
The Hon. A. B. Kelly: To the point of order: I agree with the Hon. Dr B. P. V. Pezzutti and the Hon. J. H. Jobling and disagree with the Leader of the House. I understand that under the Constitution honourable members are to be referred to as, for example, the Hon. Jan Burnswoods, which I may not necessarily like. I might also prefer to be called a State senator. I am also advised that the honorific "the Honourable" is set out in letters patent from the Queen, so we are constricted by law to be called "the Honourable".
The Hon. G. S. Pearce: To the point of order: My understanding is that the correct procedure applicable in the House is that honourable members should be referred to in the third person and not directly by their names. Whilst honourable members are entitled to use the honorific, as the Treasurer has pointed out, under letters patent from Queen Victoria honourable members are merely obliged to refer to other members by a third person description. For example, it would be appropriate and sufficient for me to refer to the Hon. Helen Sham-Ho as the former Liberal member of the House. Not everybody is quite correct but that is the correct practice.
The Hon. M. R. Egan: Further to the point of order: Madam President, this is your opportunity to either uphold or do away with a bunyip aristocracy.
The Hon. Dr B. P. V. Pezzutti: Further to the point of order: Madam President, you might find this rather tetchy but listening to and ruling on points of order is one of the things that goes with the territory of President. In fact, on my reading the Hon. Lee Rhiannon has no choice but to be referred to as "the Hon. Lee Rhiannon" unless you change the law and we change the law. The Hon. Lee Rhiannon cannot appear in Hansard other than as the Hon. Lee Rhiannon. She can only be referred to in the Chamber in one way. I suggest, firstly, that you get advice on this matter in case you make a foolish ruling which will require dissent.
Ms LEE RHIANNON: Further to the point of order: Unfortunately, as is often the case, the Hon. Dr B. P. V. Pezzutti seems to be confused. To clarify the matter, I was sworn in as Ms Lee Rhiannon after advice was given and despite resistance for quite a while because there was no legal requirement that I be referred to as "the Hon. Lee Rhiannon". I had to swear allegiance to the Queen when I took the oath, which I would have preferred not to do. We do not have to have the title "the Honourable".
The PRESIDENT: Order! The point of order dealt only with the way in which Ms Lee Rhiannon referred to the Hon. Jan Burnswoods. The other areas of interest that have been raised in this discussion are certainly interesting but they are not relevant to the point of order. It has certainly been the practice in the past that members have referred to each other as "the Honourable". However, nothing in the standing orders requires that that practice must be followed. The use by Ms Lee Rhiannon of the words "Ms Burnswoods" is not disorderly, and the point of order is not upheld.
Ms LEE RHIANNON: Yesterday we were part way through what the Greens view as an important motion brought forward by Ms Burnswoods concerning the imposition of a goods and services tax on permanent residents living in caravan parks. We are having this debate because of the Democrats' action in the Federal Parliament when they colluded with the Coalition and we ended up with the GST. Unfortunately, Dr A. Chesterfield-Evans said that the Democrats did the best they could. Clearly they did not; otherwise we would not have a GST now and we would not have this debate. It was unfortunate that he included those comments in debate yesterday and then tried to justify why the Democrats had gone down the GST path.
I was also surprised that within the current comments about leadership within the Democrats and the relevance of the GST there is a problem of how closely the Democrats are sitting with the Coalition. I was very concerned when Dr A. Chesterfield-Evans said that they did the best they could. Honourable members should remember that the Coalition Government promised that the GST would not be charged on residential rents. That was a clear promise—one of the many promises made by the Coalition Government when it tried to get this insidious tax through. It is extraordinary that the GST is imposed on one class of citizens only, that is, those at the bottom of the socio-economic ladder in this country.
These people are doing it hard, living in what are called mobile homes, caravan parks or boarding houses. They are the ones bearing this impost of the GST—not the people of Kirribilli or Vaucluse, but those living in caravan parks around this country. That is a ridiculous anomaly affecting the 161,000 Australians who live permanently in mobile home parks. They are the ones who have to find this extra money. Some might say, "It is not very much money, an increase of between $15 and $18 a fortnight." But to those on an income of a couple of hundred dollars a week, it is a great deal of money, and it is additional money that they should not have to find.
This is an outrageous impost, and that is why the Greens support the motion. Another relevant factor is the compensation package that the Government offered those living in these parks as a means of trying to square off with them. That compensation package is totally meaningless. If it were delivered, it would give relief to only 3 per cent of park residents. That is in effect a bit of media spin to try to deflect criticism about one of the many outrageous outcomes of the goods and services tax. That is why the Greens will be supporting the motion.
The Hon. J. F. RYAN [3.01 p.m.]: I beg to differ with the "senator". I condemn the motion out of hand. It is based on falsehoods. In fact, there is no evidence that the GST has an adverse impact on caravan dwellers. We have heard from those on the other side of the Chamber endless rhetoric but no facts at all. Not one honourable member on the other side of this House has quantified the actual impact that the GST has had on caravan park dwellers. They continue to ignore the further measures introduced last year to discount the rate of GST—that is, not 10 per cent but 5.5 per cent—and make the impact neutral when compared with the rates that had been paid by caravan park dwellers.
I have no doubt that caravan park dwellers, like everyone, might now be paying more money in rent, but they are not paying more in rent as a result of the impact of the GST. If they are paying more in rent, that will be due to other factors such as inflation, but not the GST. Honourable members opposite suggest that if the GST were taken off caravan parks, residents of those parks would not pay the GST as a consumer. But they would pay the GST that has been paid by the caravan park owners on things such as fuel, cleaning, waste disposal and other services being provided by the owners. That is because the owner would be unable to take that component out of the rent and pass on the savings. Honourable members opposite ignore that.
The solution put forward by those opposite would not benefit caravan park owners; it would cruel them. That level of deceit does not stop honourable members opposite from spreading this archaic and much-discredited lie. They persist in telling the lie. This motion is based on falsehoods, not evidence. It is last year's news or the news of the year before. Much of the problem that they complain about has been solved by a package of measures designed specifically to address any adverse impact of the GST on caravan park dwellers. Whilst it might be technically correct to say that the Government promised that caravan dwellers would not pay GST, the only reason that that promise had to be implemented according to the specific letter of that law—unlike the deceit perpetrated by those opposite, because people are still paying tolls on the M5 and M4 motorways—is that not to do it would have resulted in an increase in caravan rents, not a decrease.
I think we are all in agreement that the introduction of tax reform should not have had the result of increasing caravan park rents, and it has not. Of course, there is a GST impact, but it has been negated by other designated measures, such as the increase in rent subsidies and, more importantly, the 5.5 per cent package. If any caravan park renter is paying 5.5 per cent more rent than they were prior to the introduction of the tax reform package, then the caravan park owner is operating in contravention of the law. That law is supervised not only by the Australian Competition and Consumer Commission but also, as was pointed out by the mover of the motion, by none other than the Residential Tenancies Tribunal. It is not legal for the GST to result in an increase on rents that were being paid prior to the introduction of the tax reform package. Any such notional increase has been effectively negated. But members opposite do not let the facts stand in the way of a good scandal and scare.
We are all in agreement that caravan park dwellers should not pay more as a result of tax reform, and they are not. While technically they pay a GST component, the rate of their rent has been discounted by a number of factors. Of course, members opposite neglected to mention the fact that all people on pensions and income support from the Government, or even receiving rent support, have had their incomes increased in order to compensate them for any adverse impact that might result from the introduction of the GST. Overnight I carefully read the mover's speech, which had been produced in Hansard. It is apparent that that speech contains nothing more than empty rhetoric. The mover took up half of her allocated time before even starting to talk about the impact of the GST on caravan park dwellers, but dealt with other issues relating to the Residential Tenancies Tribunal.
When it came to identifying specifically the amount by which caravan park rents had increased, the honourable member squibbed on the issue. That is because she was not able to identify an amount. Even the member who followed her in the debate, although indicating that rents had increased by about $15 or $18 a fortnight, neglected to mention that rents otherwise would have fallen as a result of the input taxes being taken out. Apparently, honourable members opposite would prefer that caravan park dwellers did not pay the 5.5 per cent GST that applies to rents but, rather, would have them pay the caravan park owner's GST on inputs. Apparently that is a better option.
In other words, as long as caravan park dwellers pay an invisible tax, apparently that is fine for Government members. I do not think they should pay a visible or invisible tax; the GST should have no impact on the rents of caravan park dwellers, and it has not. They have been amply compensated by a number of measures designed to make the impact of the GST on their rents basically expenditure neutral. Nothing said by honourable members opposite indicates that that objective of the Federal Government has not been achieved. I defy them to show otherwise. The motion is part of a cynical, outmoded and outdated scare campaign. I have no need to quote a more independent authority to show how baseless the Labor Party's campaign against the GST has been than to refer to an article by the Australian newspaper's political columnist and Channel 7 correspondent Glen Milne, who 12 months ago said this about Labor's campaign regarding caravan park dwellers:
There is nothing honourable about Labor's campaign, of course. It is just that it is very effective. Because caravan parks contain some of the most vulnerable people in the community, they are likely to be suspicious of the GST.
He concludes his remarks by saying:
He condemns Labor's campaign out of hand, as I do. It is a depressing fact of political life these days that the political debate emanating from many parties is little more than slanging matches, scare campaigns and beat-ups, which are principally designed to extract a political advantage, rather than to advance some point of principle or to suggest a scheme that might be for the public good. We have almost reached the point at which it is impossible to introduce any sort of economic reform in this State or this nation—no matter how beneficial it might be—without having to run the gauntlet of a baseless and negative scare campaign. These campaigns have nothing to do with the national interest or the interests of the people that they seek to advantage; they have simply been tailor-made to cater to a vested or sectional interest for some sort of political advantage. That is the same tactic used by members of One Nation.
We have gone from being the Lucky Country to being the Unhappy Country. Labor is now counting on caravan dwellers joining the descent into national pessimism. It's a hell of a way to win government.
Because the economic cycle is changing and the world is turning they collect all the people falling into the economic shade and suggest to them that, somehow or other, it is possible to get them back in to the sunlight by turning the globe backwards. As a member of the Liberal Party I am not about trying to turn the globe backwards; I am about trying to help into the sunlight all those people who are in the shade. The GST package and tax reform are about introducing a more fair tax package which would mean, among other things, that some of those people who live in caravan parks would not be paying 22 per cent tax on many of the supermarket items that they purchase, whilst other people who do not live in caravan parks would be enjoying restaurant meals which were not taxed at all.
According to Government members it would have been a good idea to retain a system that imposed a 10 per cent tax on champagne and a 22 per cent tax on frozen and processed food—the sort of stuff that we would find in the cupboards of people who live in caravan parks. I do not believe that to be fair. The Federal Government did not believe it to be fair and rectified it. Many people who live in caravan parks earn very modest wages. Some of them were paying 36 and 46 per cent marginal tax rates on the extra income that they earned from doing shift work or overtime, in most instances in order to save up for some other form of housing. Government members suggested that that was fair. I do not believe it to be fair. Those people are now paying a 30 per cent marginal tax rate on any extra income and they are better off.
Yesterday the Hon. I. W. West said that the large number of people living in caravan parks are better off under the Government's tax reform package. They are better off because they have more job opportunities. They are now enjoying a much better economic climate than they enjoyed under the old tax system. Government members prefer to mount scare campaigns rather than suggest ways in which to improve our economy. Government members have ignored the fundamental purpose of the tax reform package. It was intended to improve the economic opportunities of all Australians by reforming a complex and unfair tax system. What is fair about taxing processed food at a rate of 22 per cent? Processed food is a common part of the diet of many people, including people who live in caravan parks. However, the same cannot be said about restaurant meals. What is fair about taxing biscuits, orange juice, or soap powder at 22 or 33 per cent and taxing champagne at the rate of 10 per cent? A factor worse than anomalies such as this is that our old tax system stifled job creation and individual incentive.
Members opposite do not want the GST, but they have no suggestions as to what should be done to counter the impact of the imposition of high rates of tax on workers who earn very modest incomes. Under Kim Beazley's tax regime average shift workers were paying 36¢ or 46¢ in the dollar on any income they earned from doing overtime, an additional shift, or a second job. People who wanted to start a new business and create new job opportunities faced enormous amounts of sales tax before they even opened their doors to customers. That no longer applies under the current tax regime. Everyone in the community has benefited from the consistent economic growth we have been able to achieve in this nation since the tax reform package was introduced.
It is all very well for Government members to ignore those benefits, focus on other anomalies, grab hold of a sectional interest and run a scare campaign which is designed to beat up support. I will listen to such a campaign only when members opposite tell us what they intend to do to make Australia more prosperous and a better place in which to live. They have no answers for that. Notwithstanding today's opinion polls, the Labor Party will not win the next Federal election. I sincerely hope that it does not. When members of the Labor Party are backed up against the wall, stripped of their scare campaigns and asked, "What will you do to make Australia a better place in which to live?" they have no answers.
Simply trying to turn the globe backwards and espousing some nonsense about rollback are undefined concepts that might result in a worse impact than the impact they allege that the GST has had. That is something for which they will have to account. This motion should be opposed and condemned. All it is really designed to do is waste the time of this House. Government members carp about tax increases when only yesterday the Auditor-General's report contained this statement:
State revenues in 1999-2000 were $1,349 million above the budget forecast, and $1,452 million higher than the previous year. Taxation revenues accounted for the bulk—
and these are the words of the Auditor-General—
Many people who live in caravan parks do so in order to save up for a new home. Government members are denying them that opportunity by imposing such a scandalous rate of stamp duty.
of the increase over budget, with stamp duties being $935 million over budget.
The Hon. Dr B. P. V. Pezzutti: What is the stamp duty on a caravan?
The Hon. J. F. RYAN: I am not sure. It is probably 2.5 per cent of the purchase price. This Government received nearly $1.5 billion in additional tax last year and who knows what that figure will be in June this year. Yet Government members carp about some alleged—and unfortunately scandalously untrue—GST impact. Members of the Labor Party should start saying that they will reduce tax revenue—not tax rates or the nonsense about which the Treasurer talks. He knows that, in the current climate, he can reduce tax rates and still increase taxation revenue over and above the amounts for which he has budgeted. If the Government is prepared to reform that tax system, only then can members opposite come into this House and tell us what they are prepared to do about caravan park owners.
One salient point I make about the increased tax revenue that this Government received to June last year is that it gives the Government an opportunity to implement the amendment moved earlier to this motion. The Government could then give all that money back to caravan park residents. If those high tax rates are hurting the conscience of Government members they should return that money and give people who live in caravan parks that additional benefit. There is nothing stopping this Government from returning that money. The State Government gets all the GST revenue. That is not something which the Federal government keeps; it is something which is passed on, holus bolus, to the State Government. If it bothers Government members so much, all they have to do is give it back. The truth is that they have already voted against that motion in another place.
The honourable member for Wyong, who tells everyone how much he supports people living in caravan parks, promised in 1991 to introduce a private member's bill designed to do exactly that. The honourable member has not done so. When he was given an opportunity to vote for such a measure or to show his support for it, he gutlessly voted against it. This motion is nothing other than a scandalous and cynical attempt to garner political capital from those who are politically vulnerable. That is all it is about. This motion is certainly not in the national interest.
The Hon. I. W. West: I challenge you to make this speech at a caravan park.
The Hon. J. F. RYAN: I do not deny that there may be people in caravan parks who feel strongly as a result of being conned by members of the Government about the GST, but they have been conned because those members are not able to back up their claims and they would rather harp about the fact that there has been a change and fester a scare campaign than try to design and construct new policies directed at economic growth.
The Hon. I. W. West: Their rents have gone up 15 per cent to 18 per cent a fortnight. It is fact.
The Hon. J. F. RYAN: The Hon. I. W. West has already had an opportunity to make a contribution. I ask him to bring into the House the facts. The fact is the impact of the GST on caravan park dwellers was studied by an independent economic forecaster. It was less than 5.5 per cent and it was less than the amount of the subsidy that is now being given to caravan park dwellers. So, there is no reason why the introduction of the tax reform package should have increased their rents one iota. If we did what members on the government side are saying and took the GST off caravan parks, the caravan park dwellers' rents would go up considerably.
Rather than being subject now to the scrutiny of the Australian Competition and Consumer Commission [ACCC], it would lead caravan park owners to pass on the tax on other costs such as waste removal, electricity, and so on. I note that the Labor Party makes no claim to abolish the GST on caravan parks. To do so would be an empty claim. It would have the bizarre impact of increasing costs, because it would make the tenants pay the owners' GST rather than pay a neutral level of GST, which technically exists but which has no economic impact. I believe the tax package was designed to benefit all Australians, including those who live in caravan parks, and I ask the House to vote against this motion.
The Hon. Dr B. P. V. PEZZUTTI [3.21 p.m.]: I was not going to get involved in this debate, because I thought it was frivolous. The Hon. Jan Burnswoods has these little flurries of activity from time to time to keep her left-wing mates occupied.
Unlike that discerning person John West, who rejects the arguments or fish that are no good and brings to the Chamber those fish that are perfect, the Hon. I. W. West brings in stuff that one would not give to a dog, even the sort of dog that the Treasurer had that ran away. I want to say three things. First of all, when the demonstration was put on at Tweed Heads, a very positive, big-time demonstration in the presence of the Federal Cabinet, all the usual suspects were there and there was a big photograph in the Daily Telegraph. Three days later in the Daily Telegraph the same photo appeared, with little arrows pointing to who was there. One would have thought they would be people from caravan parks, the people affected. No. Who were they? One was the Hon. Janelle Saffin. I can understand that. The Hon. Janelle Saffin moves freely around the North Coast and is concerned about people on the North Coast, and I would expect her to be there. Good old Tony Albanese was there, putting it up us. Wayne Swan was there, and I thought I saw at the corner of the photograph the Hon. P. T. Primrose. I cannot be certain of that but I am pretty sure I saw the Hon. P. T. Primrose tucked around the side, hiding behind a placard.
The Hon. P. T. Primrose: There were no Liberals or Nationals.
The Hon. Dr B. P. V. PEZZUTTI: No, and why was that? Because, as part of the negotiations that came up with what I think is a very fair deal for caravan park dwellers, we were making sure that our colleagues understood. The honourable member for Richmond had been resourced about the issue by his local State member. He had major consultations with the 4,000 or 5,000 people in the Tweed alone who live in caravan parks. It is not a small number of voters. It is a lot of very vociferous people.
I will give honourable members a bit of history. When the new legislation about long-term caravan park dwelling came in under the Hon. J. J. Schipp and the Hon. Gerry Peacocke, changes were to be made to caravan parks to give people permanency but also to give them access to an appeals process. That has since been further amended by the current Government, and is something I actually support, but at the time who were the big fighters in this Parliament for the rights of long-term caravan park dwellers? They were the honourable member for Wyong, the honourable member for Gosford and I. We were the three prominent people attacking what was happening and making sure that the Hon. J. J. Schipp, the Hon. G. Peacocke, and, following him, the current Government, made changes to the law.
I was heavily resourced by a bloke called Bruce Francis, a person who used to write some material for Alan Jones—and that does not make him an extreme right-winger. He had been heavily involved with Federal politics at the time. At one time he was Federal candidate for the Liberal Party in Richmond. As a candidate he was in and out of caravan parks full time. He was the only person in years who beat the Labor Party candidate at the top end in a Federal election. He outpolled him for the primary vote. Bruce Francis got very close to understanding the people in the caravan parks. That does not mean he agreed with everything they wanted to do, but they liked the guy and he talked to them. He understood them and went into bat for them.
Caravan parks are owned and run not only by councils. Caravan parks are owned and operated by private industry, often as four-star and five-star operations. The Hon. I. W. West would have us believe that caravan parks are places where only the poor live. That is not true. Around Cabarita and Chinderah there are some enormous five-star caravan parks. These are resort or hotel style caravan parks operated by families who have been in the business for 20 years or 30 years. As well as that there are the caravan parks operated by councils on Crown land. It was Nick Greiner who required councils to return a profit to the Government of 5 per cent rather that investing all the money they made into local roads. They were not putting the money back into caravan parks. It was being shuffled out the back door by Tweed council to fund new roads and new developments. Caravan park dwellers were actually paying for the roads.
Greiner put in place a proper accounting process. Park operators saw their money being put back into their caravan parks and they paid a 5 per cent dividend for the occupation of Crown land. Caravan park dwellers suddenly noticed a huge quality improvement around their caravan parks. I tell these stories to show my involvement in the caravan park industry up and down the coast. There are some very high-quality, high-cost-to-get-into and well-maintained caravan parks and permanent dwelling parks up and down the coast. Subsequent legislation that built upon legislation introduced by the Hon. J. J. Schipp has given permanency to park residents.
Some relocatable homes cost a minimum of $80,000 or $90,000. They are put in with awnings and are almost concreted to the ground. People live that way because they choose to, because it gives them better security. More people are in a caravan park and the park area is well lit. Park residents who want to travel, as many healthy, wealthy retired people do—or even healthy retired people who do not have a lot of money—can leave their mobile homes inside a caravan park knowing they will be there when they come back and will not be vandalised or robbed. These are very convenient places to live for older folk who like to be out and about. However, that does not mean that they are cheap or that rents are low.
When the Federal Government introduced the GST it offered caravan park owners two choices. If caravan rents were GST-free, caravan park owners would not be able to claim back the GST they paid on services and goods bought to maintain their caravan parks, including cleaning and maintenance services. Costs for caravan park owners have increased dramatically because there was no tax on those services before the GST was introduced. However, costs may have dropped slightly if they previously bought supplies that attracted the 22.5 per cent wholesale sales tax. They are more concerned about the GST on services they must purchase, including any outstanding service contracts. So costs have increased dramatically. The increase in costs, with the GST component, must be passed on to those who rent caravans, as all tax increases are passed on. That is exactly what happened in the private rental market. People who own investment properties—the Hon. I. M. Macdonald probably owns a number of investment properties—
The Hon. I. M. Macdonald: I wish.
The Hon. Dr B. P. V. PEZZUTTI: Most of the chardonnay set have investment properties.
The Hon. I. M. Macdonald: No. You are a member of the chardonnay set. I drink chablis.
The Hon. Dr B. P. V. PEZZUTTI: I thought the Hon. I. M. Macdonald was a sauvignon blanc man these days. People who own investment properties and rent them out cannot claim back the GST on inputs or charge GST on rent. That is a disincentive for people to own rental properties, except they can increase rents to cover the GST on property management services. I own a unit in Sydney. My quarterly payments for maintenance of the units and the sinking fund have increased. That reflects the increase in costs for the agents who manage the units. Although I own the unit, and costs have increased, I cannot claim as an input the GST I pay.
The Federal Government conducted several inquiries into the GST on rents. It decided that in the long term it is better to allow caravan park owners, whether it be a council or an individual—many caravan parks on the North Coast are operated by councils—to claim inputs. That puts them on the same footing as other businesses, because basically they are a business providing a service. That is what happened. Caravan park owners can claim back the GST they pay for services and they save money on supplies. Instead of paying wholesale sales tax of 22.5 per cent, suddenly they were reaping the benefits of the GST by claiming back the GST on supplies. In the past they paid the wholesale sales tax and never got it back; it simply went to the State Government or the Federal Government.
The Federal Government looked closely at the caravan park industry, and it consulted those who live in caravans, caravan park owners and councils. As a result, it decided that caravan park owners could increase rents by 5.5 per cent, and that any future increases will be subject to inquiries by the Australian Competition and Consumer Commission. At the same time, the Federal Government increased the rental assistance for those who rent caravans—those people much publicised by Ms Lee Rhiannon and Hon. I. W. West with their song and dance. I think those who rent caravans were slightly better off before the GST was introduced. In fact, they have been overcompensated for the rent increases. I return to the photograph. After the big demonstration with placards, which looked professional—they were probably done by Eric Roozendahl in Sussex Street—
The Hon. Janelle Saffin: We don't need Eric to do our placards.
The Hon. Dr B. P. V. PEZZUTTI: Who does them for the left?
The Hon. I. M. Macdonald: We organise them—don't worry!
The Hon. Dr B. P. V. PEZZUTTI: The left organises them.
The Hon. Janelle Saffin: We are highly professional.
The Hon. Dr B. P. V. PEZZUTTI: I thought they were the Roozendaal style. They were fairly good; they were good enough for the right. The placards were waved around with a song and dance. Some caravan dwellers wondered what the protesters were doing. They had been called together to discuss the matter; suddenly the media turn up and wonderful, professional placards are being waved around. The exposé was in the Daily Telegraph three days later. They were all there—fingered! I cannot remember everyone who was there but I am fairly sure I saw the Hon. P. T. Primrose. I know the Hon. J. R. Johnson was not there, because he comes from the Tweed and he knows that this is a big beat-up. Another important feature of the GST for people who rent caravans—the people whom the Hon. I. W. West seems so concerned about—is that it was not imposed on food. That was the result of negotiations between the Federal Government and the Australian Democrats. However, I do not think that it was necessarily a good idea.
The Hon. J. R. Johnson: It's on some food.
The Hon. Dr B. P. V. PEZZUTTI: That is right.
The Hon. I. W. West: Are you happy with the petrol decision today?
The Hon. Dr B. P. V. PEZZUTTI: I will get to petrol. If the Hon. I. W. West moved a motion relating to petrol prices I would support him all the way, because I have tried to raise in this House the Government's rip-off in terms of petrol. The New South Wales Government says that it is returning the tax to the North Coast, but that is not the case. The Hon. Janelle Saffin will support me on this because she has had the same experience. Petrol should be 5¢ cheaper in Lismore than it is in Sydney because we pay 6¢ less in tax, but in fact it is 5¢ more. I heard the Leader of the Opposition, Mr Beazley, say that people in the regions are paying more tax on petrol.
People in Armidale pay less tax on petrol—that is, excise tax plus the GST—than people in Sydney. Although the people of Armidale pay more for petrol, the amount of tax they pay—the GST plus excise tax—is much lower than that paid by the people of Sydney. That is certainly true of the people of Lismore. Although petrol is more expensive in Lismore, we pay much lower tax than is paid by people in the eastern suburbs or western suburbs of Sydney. So let us not get too carried away on the petrol issue.
The Federal Government has listened on the issue of GST on caravan park rents. Certainly, Larry Anthony, Ian Causley, Don Page and other people in the area have listened carefully. I am not sure whether Neville Newell has been talking to people in his electorate. Harry Woods has not been anywhere near the caravan parks at Iluka and Yamba for years. He has not been to his electorate for years. The Federal Government has listened. If Labor wants to roll back the GST on rents it should just try. I have not heard Kim Beazley say that he would roll back the GST on caravan rents. The Hon. Jan Burnswoods is bleating, as usual. It is nonsense. We should strike out all her comments because they are an embarrassment to our intelligence.
The Hon. D. F. MOPPETT [3.38 p.m.]: It is often—
Pursuant to sessional orders business interrupted to allow the mover to speak in reply.
The Hon. I. M. MACDONALD (Parliamentary Secretary) [3.38 p.m.]: I listened with interest to the two previous speakers, who made comparatively erudite contributions to the debate. Unfortunately they forgot some of the facts.
The DEPUTY-PRESIDENT (The Hon. A. B. Kelly): Order! The Hon. I. M. Macdonald cannot speak in reply to debate on the motion moved by the Hon. Jan Burnswoods unless he seeks leave to do so.
The Hon. I. M. MACDONALD: I seek leave to speak in reply to the debate.
Neither the Hon. J. F. Ryan nor the Hon. Dr B. P. V. Pezzutti referred at any point in their contributions to specific examples of what has occurred since the introduction of the goods and services tax.. With regard to the Tweed Broadwater Village—
The Hon. M. I. Jones: Point of order: Leave was neither sought nor granted.
The DEPUTY-PRESIDENT (The Hon. A. B. Kelly): Order! Yes, leave was sought and granted. The Hon. I. M. Macdonald may proceed.
The Hon. I. M. MACDONALD: Residents of the Tweed Broadwater Village were notified on 28 April last year that their rents would increase from $205.70 a fortnight to $220.80 after 1 July. That increase, namely of $15.10, was implemented on 1 July. The savings they would make from the loss of wholesale sales tax, which the Hon. Dr B. P. V. Pezzutti referred to, and other embedded savings amounted to exactly 0.1351 per cent. In other words, the savings with regard to wholesale sales tax were minimal indeed; however, the $15 was very real.
The Hon. Dr B. P. V. Pezzutti: That's true. I accept that.
The Hon. I. M. MACDONALD: But the Hon. J. F. Ryan did not.
The Hon. Dr B. P. V. Pezzutti: I was talking about the tax on services.
The Hon. I. M. MACDONALD: The Hon. J. F. Ryan did not say that. In relation to the package, the Hon. J. F. Ryan said there was a package that would equalise this situation so that no-one would lose. Late last year the person responsible for this issue at a Federal level, Anthony Albanese, the Federal member for Grayndler, delved into and researched the package. He said:
Let us remember the history of this matter. Prior to the 1998 election the then Minister, Mark Vaile, issued a circular to caravan park residents across Australia. In that circular he made the following statement:
What we found was that, of the 161,000 permanent residents of caravan parks, only 3,955 will get one red cent out of this $33million package—that is, 97 per cent of these residents get nothing at all from the package that was lauded as solving the issue of discrimination because of the failure of the National Party and the government to live up to their promise that there would be no GST on rent.
As we have seen, most of these caravan parks have had to impose this increase on their residents. No-one can dispute that; it has happened. As I have said, the rents at Tweed Broadwater Village have increased by $15.10, which is a direct GST increase. Yet, prior to the election the Minister made it clear that the GST would have no effect on caravan park fees. The Minister even promised, "This will be treated the same way as rental of a house or unit and is GST free."
I would like to assure you that residents who occupy accommodation in a caravan park or holiday village on a permanent basis (i.e. over 28 days) will not have to pay GST on their site fees. This will be treated the same way as rental of a house or unit, and is GST free.
The Hon. Dr B. P. V. Pezzutti: How much rental assistance did they get?
The Hon. I. M. MACDONALD: They are getting $33 million. As I have already pointed out, that applies to only 3,955 of the 161,000 permanent residents of caravan parks in Australia. Figures from the Australian Bureau of Statistics clearly show that there are 161,000 permanent residents of caravan parks in Australia, and that only 3,955 are receiving access to that assistance. In other words, 97 per cent of those residents are not receiving that assistance.
The Hon. Dr B. P. V. Pezzutti: They're not all poor.
The Hon. I. M. MACDONALD: But they have had the increase. Mr Anthony, the poor, hapless, soon-to-lose-his-seat member for Richmond, said on 12 October 1999:
Mr Anthony then reiterated what Mark Vaile had said. As I indicated, Mark Vaile had said that residents of mobile home parks would not have to pay GST on their site fees. Yet, there is a GST on their site fees. Those Federal members deliberately lied to the caravan park residents and to the electorate; they deliberately misled them. In the case of the seat of Richmond, where Mr Anthony has a margin of less than 1 per cent, that lie was probably critical; it allowed him to win the seat. However, that lie will lead to his defeat at the next election. I feel sorry for the poor old National Party in relation to these issues. If one looks at the 17 electorates that have the largest number of caravan park residents, one finds that six of those 17 seats are in New South Wales and five of them are held by the National Party.
As you well know, prior to the last election we were very open and transparent about the GST, particularly the relationship that it had to rent and particularly the relationship it had to mobile home parks.
Let us look at the figures. The seat of Richmond has 6,649 permanent residents of mobile home parks, Cowper has 4,471, Lyne has 3,421 and Page has 2,968. All those seats are National Party seats, not Liberal Party seats. They are among the seats that have the highest number of residents of mobile home parks. Who are the members under threat? Those members are National Party members, a number of whom will be thrown out of office because of the broken promise of Mark Vaile, who said there will not be a GST on caravan park rents. I suggest to the Hon. Dr B. P. V. Pezzutti that if he really wants to test the feeling of the people he should go to these caravan parks. They will throw him out. And they will certainly throw their local National Party members out at the next election. What a sad situation! The poor, once-great National Party, represented by the Hon. Dr B. P. V. Pezzutti, who is sitting in stunned silence because he knows what is happening to the National Party—
The Hon. Dr B. P. V. Pezzutti: He's not saying anything because he is not convinced by your drivel.
The Hon. I. M. MACDONALD: He has come alive! As the Government demonstrated in debate yesterday, in relation to Telstra the National Party is out of touch with the people of regional areas. It is also out of touch with the people on this and other issues. It is unfortunate that the Country Party has disappeared, but it is very fortunate that there is Country Labor, which can put a little zip back into the bush for rural people and give them access to the services they richly deserve—instead of them being abandoned, thrown aside and forgotten by Liberals like the Hon. Dr B. P. V. Pezzutti. We must remember that five of those seats are National Party seats. I am prepared to wager a bet. I suggest that several of those poor members will lose their seats after the next election because of this issue.
[Time for debate expired.]
Question—That the amendment be agreed to—put.
The House divided.
Mr M. I. Jones
Mr Della Bosca
|Mr Gallacher||Ms Burnswoods|
|Mr Jobling||Ms Tebbutt|
Question resolved in the affirmative.
Amendment agreed to.
Motion as amended agreed to.