Ian Macdonald (Queensland, Liberal Party) Share this | Hansard source

It could have been much simpler, Senator Murray, had it not been for your amendments—which, as I say, I acknowledge were gratefully received at the time, because we were able to discharge the promise we made to the Australian people to bring in a goods and services tax. Unfortunately, we were not able to discharge all of the promise to bring in a simple system of goods and services tax, and it has turned out to be quite complex, as you rightly confess to, through your involvement. As I say, it is no use rehashing that now, but I was always of the view that the concerns you and your party and many of us had about increasing costs to various elements of society could have been better addressed in a way other than interfering with a taxing bill. Having said that, the calls that both the previous speakers now make for simplification have a touch of irony in them in that both those parties have been the cause in one bill—not this bill we are dealing with—of making tax laws far more complex than they needed to be.

There are, of course, simple ways to fix the complexity of tax. At various times people have called upon the abolition of income tax across the board—not that I am particularly advocating that today, but I do think governments should be working towards a system where tax is paid and tax returns lodged only for those above a certain limit. I will not even attempt to guess what the limit should be. The tax laws become very complex because of exemptions and concessions that governments make. If there were a simpler way of addressing the underlying principle of taxation so that you did not need to allow all the complex concessions and allowances, that would be a goer well worth attempting to achieve. But I think there is merit, particularly as far as ordinary taxpayers are concerned, to look towards a system where most Australians would not have to lodge income tax returns at all. There are other ways of raising tax. Perhaps if we had not been so generous to the Labor states and given all the GST money to the states we could have had substantial concessions in the tax we collect under the income tax and associated acts. The states, particularly my state of Queensland, are rolling in money as a result of the GST. They never concede that, but the facts speak for themselves. Queensland has done exceptionally well.

Many people still think that the GST is a tax that the Commonwealth collects and keeps. Of course, it does not keep it. It all goes to the states—all of which, regrettably, are Labor states; all of which are or should be rolling in money. But, in my own state of Queensland, they cannot keep the health system operable, they cannot keep police on the beats and they cannot do anything about the desperately needed infrastructure, particularly in south-east Queensland. One would have hoped, with all of the GST tax revenue that Queensland has received, that the state Labor government might have been able to do that. Unfortunately, as with all Labor governments, mismanagement of financial matters, increases in the number of public servants, increases in bureaucracy and putting mates into the Public Service—it has become quite politicised in Queensland at the moment very regrettably—are the sorts of things that happen when you trust Labor governments with big licks of money. Unfortunately, in those days we were desperate to get the GST legislation through and needed the states onside, but in retrospect perhaps we should have imposed more conditions on them. Perhaps we should have called for accountability in the way that they spent the money because, looking from this chamber at all of the states, particularly my own state of Queensland, the lack of accountability for the spending is something that is almost criminal.

I want to use the opportunity of this debate to raise the issue of the zone tax scheme. Perhaps, tongue-in-cheek, I could suggest that this bill could have been extended to remove from the income tax acts all reference to the zone tax scheme—that is, abolishing it. I say that tongue-in-cheek because the effect of the zone tax scheme as it was introduced in 1945 is no longer with us. In 1945 the scheme was introduced to provide special income tax concessions for people residing in certain remote zones of Australia. The ATO website actually says that it was introduced in recognition of the disadvantages that taxpayers are subject to because of the uncongenial climatic conditions, isolation and high costs of living in comparison to other areas of Australia. That applied in 1945. It applies equally today but perhaps not with the boundaries as they were in 1945.

For example, I live in Ayr, in coastal North Queensland about an hour south of Townsville, and I still get a zone tax allowance. I think it is $54. I do not consider that where I live has uncongenial climatic conditions, that it is isolated or that the costs of living are all that much higher than they are in the capital cities. They are higher, but not all that much higher. So perhaps places such as where I live do not deserve that $52 to $54 allowance—it is some figure in that order. I suspect if it were taken away, few taxpayers would even notice it. In discussions I have had with the Treasurer, he rightly says that if you take away any sort of concession that anyone gets, it has unfortunate consequences. I do not know that I agree with him and I might say that this issue of zone tax is, I suspect, the only area where I disagree with the Treasurer, who is quite clearly an exceptional Australian and an exceptional Treasurer. As I say, quite clearly Australia’s best Treasurer ever—