Senator McLAREN (South Australia) - If the debate on this clause has done nothing else it has at least brought people out into the open to let everyone in the community see where they stand. Every honourable senator on the opposite side is expressing regrets at the ramifications of this clause. Yet to a man they are saying that they will support it. Senator Martin came into the chamber a while ago today and said that she wanted to put the record straight. I want to refer the Committee to what Senator Martin actually said last night. I quote from page 1235 of the Senate Hansard. She said:

She said this afternoon that she was using as the basis for her right not to support the amendment put forward by Senator Townley the fact that she had been convinced that this is not retrospective taxation. Why did she last night express regret about the ramifications of this clause and today say that she is now convinced that this is not a retrospective measure? Senator Martin and Senator Missen will have a hard job convincing people who take, say, three years annual leave as a lump sum payment and have to refund a third of that payment to the Government that this is not retrospective taxation.

If the Government had been honest and had wanted to force employers and employees into taking their annual leave each 12 months as they should, it would have given warning in this Budget that, as from this financial year if annual leave is not taken it will be taxed at the rate of 33 te per cent. Why tax the people who, in all honesty, believed that they would pay very little tax? The Government made great play in its policy speech on the claim that as from 1 February it would reduce taxation. No warning was given to those unfortunate people of what it would do in the Budget. If it was good enough to hoodwink people into believing that the Government would reduce taxation, why was it not good enough to be honest with them and tell them that this year it would raise $78m, taken out of their pockets, to try to balance the Budget or to bring about some decrease in the massive deficit? The Government has done this by an underhand method. It was all very well for Senator Martin to say last night that the Labor Government did things by stealth. I will have more to say about that.

It is no good honourable senators opposite trying to extricate themselves from the position in which they now find themselves by saying that they are convinced that this is not a retrospective taxation measure. It is nothing else. The people who will have to pay the tax will know about it when they get their holiday pay, whenever that may be. In fact, the measure is retrospective and honourable senators opposite have to live with that. If we on this side wanted to be really political we could thank the Government for doing this, because it will cost the Government hundreds of thousands of votes.