NOT THE END - BUT THE BEGINNING

by Jeremy Lee
As we go to print we are only days away from the introduction of the ignominious, destructive, discriminatory and repressive G.S.T. Its introduction flies in the face of the will of the people. It breaks previous promises by the Prime Minister. Tens of thousands of Australians have actively expressed their opposition, only to be treated with contempt. A high percentage of small businesses will be forced into closure - indeed, a considerable number have already closed their doors. Those struggling to survive will be subjected to vastly-increased administrative work in what is already an over-regulated economy. The beneficiaries will be the large corporations, almost exclusively foreign-owned. In short, it is a deliberate act of evil, perpetrated on the people by a supposedly-representative government.

The depth of the coming reaction has yet to be ascertained. The recent figures quoted in On Target on the advertising costs for the G.S.T. were seriously under-estimated. The Australian (30/5/2000) reported that ".... Tax officers revealed in a Senate estimates hearings that the bill for advertising, promotion and education for all the tax changes on July 1 had now topped $410 million ...."
That's a lowly $22 for each man, woman and child in Australia - $88 for each family of four; spent on a form of propaganda that is quite inexcusable.

Included in the money spent was $270,000 for a song by the aged rock-star (and former alcoholic) Joe Cocker called "Unchain My Heart", which provided a maudlin background to various pictures of men, women and lawn bowls shedding their shackles. The only image invoked in this writer was Karl Marx's famous Manifesto slogan, "You have nothing to lose but your chains!"

Prime Minister Howard's reaction when question was explained thus by The Australian: " .... John Howard said the advertising and a proposed mail-out to taxpayers was no different to the campaign run by the Hawke Labor Government promoting changes to superannuation. 'There were booklets showing money literally growing on trees. It was one of the most outrageous advertisements ever funded by Australian taxpayers,' the Prime Minister said ...." Many a true word!
Howard, in essence, agreed that his programme was "no different" to the most outrageous advertising campaign ever funded by Australian taxpayers! It's the only statement Howard has made on the GST with which we can agree.

BUSINESSES ALREADY CLOSING

MISTAKE-RIDDLED-LEGISLATION

So consuming has been the rush by the Government to get the G.S.T. up and running at all costs that it has apparently left sound law-making out of consideration. Under the heading "RUSH LEAVES NEW TAX LAWS RIDDLED WITH MISTAKES", The Australian Financial Review (2/6/2000) reported:
"The sheer volume of tax change has overwhelmed legislative drafters and tax practitioners alike, resulting in an unprecedented number of errors in the law, and contributing to a real fear that the new simple system will be anything but.

'It would be fair to say that there will be as many defects in the new law as there are in the old law - because of the rush in the way it is being done,' barrister Mr. Tony Slater Q.C. told The Australian Financial Review this week. 'The G.S.T., for example hasn't even come into force yet and already the second edition of the act is out of date.' "Mr. Slater said practitioners were suffering from 'amendment fatigue', while the problems for drafters were evidenced by the 'remarkable range of errors that have crept into the legislative process'.
"Instances include the enactment of amending acts in the wrong order - resulting in failed amendments, the enactment of references to non-existent provisions and the enactment of different provisions with the same section numbers."
And these are the obvious mistakes.

Corrections to amending acts are being hidden away in the back of other amending acts.' Meanwhile, there are problems with changes that have been announced but have not progressed beyond press statements ..... " There followed a number of similar comments from lawyers and barristers, deeply concerned with the shoddy and massive legislation for the G.S.T. The head of the Victorian Law Institute's tax committee, Mr. Tony Reardon, was quoted as saying: "They are so hell-bent on getting legislation out that it is likely to be defective and no-one thinks they will devote adequate resources to fixing it," Mr. Reardon said.
"There is a serious danger that in the headlong rush to achieve tax reform some fundamental legal rights of citizens will be left behind ...."

We have no doubt Mr. Reardon is right. Furthermore, the bulk of the legislative provisions will never be seen by members in parliament. They are simply churned out by technicians in bureaucracies, under the "enabling legislation" built into the Acts which went before parliament The end result is likely to be very different from what the politicians who debated the original Bills believe.

THE G.S.T. IS PROBABLY ILLEGAL

Hanging over the heads of Prime Minister Howard and his henchman Peter Costello is the probability that the whole G.S.T. package contravenes the Constitution. They probably hope that the issue is too costly to be tested in Australia's High Court, and that, once in place, legal action will be confined to anomalies rather than the validity of the whole thing.

The Constitution has two clauses which are clear and concise: Firstly, among the 39 "Heads of Power" granted to the Commonwealth at Federation, Section 51, Clause 2 gives the Commonwealth power over: "Taxation; but so as not to discriminate between States, or parts of States". Lest there should be any confusion, the same principle is repeated in Section 99, which reads: "The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof."

With the above in mind the following article from a small monthly journal The Bugle (5/2000), published in the Brisbane suburb of Redcliffe, is printed with acknowledgment. The author is Chris Morris; the heading, "G.S.T. ILLEGAL!"
"Due to an astounding oversight by both the Public Service Treasury Department and the Federal Parliament, it now appears that the G.S.T. is illegal and has been from the start. Further, it appears that the Treasury and the Government have been aware of it for some time, since they were forced to tamper with the petrol excise in an effort to remove the discriminatory effects of the G.S.T. on fuel. The basis for this view is the Constitution itself, which states at Section 51, Sub-section 2, that "The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to ..... taxation, but so as not to discriminate between States, or parts of States."

In ANY interpretation of this clause, it is irrefutable that a person must not be unfairly disadvantaged by Federal taxation, just because they live in a different part of the State to someone else. Now take the simple instance of a can of beans. A can of beans in Brisbane costs, say, $1 retail, but in Longreach, it might cost $1.20 retail. The actual amount of G.S.T. (10% of the retail price) on the same item is more in the bush than the city. The same could apply to absolutely any item at all. So someone living in a remote area pays more actual tax for the same goods than someone in the city. As long as the tax is a percentage of retail price it must discriminate between parts of States and is therefore unconstitutional and illegal! The only way out of the dilemma would be to introduce price control on everything retailed in Australia - (not a chance) - or to hold a referendum to change the Constitution - (also no chance) - or to admit the error and repeal the G.S.T. legislation.

So what will happen? When the question was put to Liberal Federal Member for Petrie, Ms. Gambaro, her office said this question had "never been put to them before". Staff were very friendly and helpful, and within two days replied to the effect that the point was understood, but various compensation packages in regional areas nullified the disadvantage. (The offer was made to research a written submission, which will be accepted, and publicised in this medium ....Ed.) This is an important point. As one concerned citizen, Sterling Bower of Scarborough (Qld.) said: "A government which has to have compensation packages is admitting that it has caused disadvantages in the first place."

Now, even the Government's compensation system seems to be at issue, according to The Australian's Bernard Lane, in an article on 15/5/2000, titled "CHEAP BUSH FUEL COULD BREAK LAW". In an interview with Mr. George Williams, Senior Lecturer at the Australian National University, it was proposed that these compensatory packages could breach Section 99 of the Constitution, which forbids discriminating between regions in commerce, trade or revenue. This would be reversing the scenario, where some people in the bush would receive money from Revenue - as compensation admittedly - but still, not received by their counterparts in the City.

The Tax Office's Paul Tregillis, an assistant commissioner, says these fuel compensation programs have been set up as direct money grants to service stations and road transport interests, rather than rebates of G.S.T. or excise, because the Constitution prohibited a regionally discriminatory tax. Mr. Williams, however, believes the High Court might still regard these grants as rebates of a discriminatory tax.

Obviously, the principle is that even if some of the tax is handed back, if the original tax is discriminatory, it is illegal. Consider this: all that fuss is only about fuel! What about everything else? What do others have to say about the G.S.T. illegality?
Wayne Swan, Labor Federal Member for Lilley, was not in either, but the response from his office was "You have a valid point. We'll have to get back to you on that." No reply has yet been received.
Senator Hogg, Labor Senator for Queensland, was out too. His office: "That's a problem alright, can't respond to that."
A.T.O. Agent, G.S.T. Hotline: "That's a curly one. You'll have to put it in writing." (It seems those in officialdom were taken by surprise.)
Tony Murphy, IndBiz, representing small business associations: "The G.S.T. is an impost on the time and capital expenditure of small business. This latest anomaly only proves it is an ill-thought-out tax forced on the people of Australia against their will."
John McRobert, Tax Reform Ltd., representing alternative tax systems: "The logic of your point sounds good. In the interests of Australia, the G.S.T. must be put on hold until we come up with a better system, especially for small business. Delay would afford the opportunity for proper debate, which we have not yet had."
Jock Wallace, representing the Debit Tax Council of Australia Inc. "The G.S.T. certainly does contravene Section 51 (2) of the Constitution, and I believe it is illegal. The G.S.T. is a compliance nightmare invented by bureaucrats to benefit only Big Business, which can be the only reason the benefits of the Debit Tax were deliberately suppressed from public knowledge."

The Constitution specifically forbids any law imposing a tax which discriminates between parts of States, and the G.S.T. does just that! Whether or not compensation packages are later tacked on is irrelevant. Even whether the compensation packages are legal or not is irrelevant. The G.S.T. itself is illegal! (end of article)

The article above has caused widespread interest, with copies of The Bugle disappearing within hours of distribution. Rumour hath it that the article has caused anger and dismay in the highest circles in Canberra. Astonishingly, the National Party, which has always claimed to be a voice for the bush, has so far made no protest against a tax which mitigates heavily against its own constituency.

ULTIMATE POWER?

by Betty Luks
It is dawning on more and more Australians that the New Tax System is in fact the Business Identity Card - the complete surveillance system. Section 165-55 of the G.S.T. Act sums up the Tax Commissioner's goal of seeking ultimate power. "For the purposes of making a declaration under this subdivision, the Commissioner may:
* Treat a particular event that actually happened as not having happened; and
* Treat a particular event that did not actually happen as having happened and, if appropriate, treat the event as: having happened at a particular time; and having involved particular action by a particular entity; and
* Treat a particular event that actually happened as: having happened at a time different from the time it actually happened; or having involved particular action by a particular entity (whether or not the event actually involved any action by that entity)"

This is the unreality of George Orwell's 1984!

THE MYTHICAL BEAST OF OPTION 2

Reports are going out to the business community that the Howard government intends to go ahead with the implementation of the Ralph Report's Option 2; a cash flow/tax value method of calculating taxable income. Tax Advisers are saying this will dramatically change the way companies calculate taxable income and will result in the throwing out of many decades of legislation, determinations and case law.

It was in November 1999 Alan Kohler warned in an article in the Australian Financial Review, "There will be no more secrets from the tax man. This basic truth is simply not understood." He wrote, "Between Howard's 1997 G.S.T. conversion and the so-called ANTS paper (A New Tax System) in August 1998, Treasury and Tax Office officials took hold of the process and turned it into something more than just a Goods and Services Tax.

Chapter 4 of ANTS was the key section. It is called 'Reform to tax administration' and, at the time, looked boring and was widely ignored in the flurry of excitement about the G.S.T. and the personal income tax cuts... more notice should have been taken of the following paragraph in the 1998 document: 'The G.S.T., the alignment of business tax payments, the establishment of the A.B.N. and the new withholding arrangements will, together, result in more timely receipt of better information and a more comprehensive matching capability for the Tax Office to act upon. The level of integration of the G.S.T. into the tax system as a whole will be a key feature of the government's approach."

As for the mythical beast Option 2 to which Alan Kohler referred: "Once the G.S.T., the alignment of business tax payments, the establishment of the A.B.N. and the new withholding arrangements" are bedded down and "a more comprehensive matching capability for the Tax Office to act upon" is secured and other tax reforms are implemented such as Entity Taxation - Option 2 will rear its ugly head!
The original Option 2 in the Ralph Report included a cash flow type of income tax calculation as well (cash receipts minus cash payments) - but ... John Ralph has refined this and now wants simply to apply tax to changes in assets, including bank balances."

What does this mean? Only time will tell - the legislation has not yet been drafted. The Taxation Examiner May/June 2000 Newsletter says that, "...coming on top of the complexities of the tax reform process already in place and the introduction of G.S.T., is a clear sign that the Government and its advisers are completely out of touch with reality... The proposal is planned to go ahead despite high level concerns from small business, farming groups and tax professionals."

The truth is the chains of Big Brother are enmeshing us, not releasing us, as the Howard Government's propaganda would have us believe.

A DISASTER FOR SMALL BUSINESS

WE ARE WITNESSING A NATION'S DEATH THROES

BETTY LUKS CONTINUES QUEENSLAND TOUR

THE 'SORRY' AND 'RECONCILIATION' DEBATE

MR. '15 PER CENT': Charles Perkins has been around a long time and one would have expected that in that time he had accomplished some good works towards his fellow Aboriginal-Australian. Maybe he has, maybe he hasn't, but one thing is sure, the land rights industry has provided him with some pretty good 'perks of office'. The Weekend Australian, February 21st-22nd, 1998, property section carried the following report: "The first house in Newtown, Sydney, to pop the million-dollar mark has been bought by Eileen, the wife of Aboriginal activist Charlie Perkins, for $1.12 million through Roger Cull of Raine and Horne... Mr. Perkins confirmed the sale, saying it was the intended 'family home', after several years in Bondi. Mr. Perkins was last year dubbed "Mr. 15 per cent" after it was revealed interests associated with himself and his son Adam stood to make big money from their roles as middle men on lucrative native title compensation claims. The Ernst Henry mine near Mount Isa, for example, earned Aboriginal claimants up front payments and royalties of $120 million..."

THE LUCRATIVE ELECTORAL FUNDING

CHAOS CONTINUES IN ZIMBABWE

Black Squatters occupy over 1,000 White Farms from Tom Fielder
White farms are vast and highly productive. Some cover thousands of acres. They employ large numbers of workers, often in the hundreds. These farms can be as large as an entire county in the U.S. They provide homes on their property for their black workers, schooling for their children, medical care and the highest pay for blacks in Zimbabwe. These workers are loyal to the white farmers and have fought to keep the Red squatters off their farms.

Nevertheless, the ruthless Mugabe sees this as an election ploy to cover up his gross mishandling of the economy. He has supported the squatters who have now occupied over 1,000 white farms. Using spears, axes, knives and guns they have killed some of the whites and driven off workers. Mugabe blames all the problems of the country on the whites regardless of the fact that they produce the nation's only export products (from "The Truth At Last"). "Mugabe to speed up land grab . . ." Herald-Sun, 2/6/2000: "Last month he warned "we can do more" if they resisted again.

His remarks were a reference to the violence of the past three months in which five white farmers have been murdered and a reign of terror extended over occupied farms . . . of which 841 have been listed for confiscation."

Can readers of On Target see a correlation between a racial policy to remove about a thousand white farmers in what was once a peaceful and prosperous Rhodesia and a financial policy here in what was once a peaceful and prosperous nation to also remove about a thousand farmers?

"About 300 angry dairy farmers marched on N.S.W. Parliament in Sydney yesterday to protest about total deregulation of the Australian dairy industry on July 1st." - The Land, 1/6/2000.
It is estimated that at least 1,000 dairy farmers particularly in N.S.W. and Queensland will not survive this financial policy.

Further information on Tape - $7.00 from Box 184, The Basin, 3154: "The Technology of Illegitimate Power" by Ivor Benson, formerly Political Adviser to Ian Smith, Prime Minister of Rhodesia.