Madam Speaker, I thought that I indirectly admitted the correctness of this position. This is exactly why Reform supported the idea that we should have a national sales tax. Though I must say to the hon. member that after the very lengthy study of the GST as it is in operation I have really changed my mind about the merit of such a value added tax unless we could start from scratch and do what the New Zealand government did: put it broadly on everything.
The administrative nightmare, the distortions that I have mentioned in my speech that are caused by exemptions, zero rating and various other twists that are too complicated to explain here have made the tax into a nightmare. I do not believe it can be fixed. To come forward and say that we need a valued added tax on everything, including food, simply will not go in this political system, however good it would be.
For this reason I believe the country needs fundamental tax reform which would lead to flatter rates: flatter personal income tax rates, the elimination of double taxation on income from property and lower rates or maybe even the elimination of capital gains taxes. Economists agree that all those measures would do wonders for the efficiency and the growth of an economy.
In the process of having such tax reform I believe that it would be appropriate to eliminate the GST and impose the revenue loss on the other forms of taxation. We have done some very preliminary calculations which involve a flat tax. This is not Reform Party policy but we are doing our homework which is expected of us as elected members of Parliament. We are expected to do our homework, to investigate the costs and benefits of different types of taxation.
When we ran simulations of different tax rates on the computer, we discovered that the average flat tax rate would have to increase by only about three percentage points to afford to get rid of the GST with all the nightmares associated with it, including the need to send monthly cheques to individuals in Canada with lower incomes. Members know how much it costs to write, print and keep track of cheques, yet the GST and the blended sales tax require the government to send out those kinds of cheques to people with low incomes. They can be helped some other way.