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Tuesday, 30 September 1997
Page: 7234

Senator HARRADINE(5.06 p.m.) —I do not intend to vote for the motion that has been put forward by the government. I do understand some of the matters that the government has been raising and these have given me some considerable concern since the last time this matter was discussed. The question that I think we all ought to think about—including the opposition—is what effect the carriage of the amendment will have on possible employment, and what are the compliance costs of this amendment which the government is asking not be insisted upon. Those are the questions that have been exercising my mind.

There have been a number of suggestions that the compliance costs will be quite considerable because the effect of the opposition's amendment would be to include in the $5 million threshold criteria used to determine whether a taxpayer qualifies for the CGT retirement exemption personal assets which may appreciate in value or which may have a resale value of more than $5,000. So the question is whether, under a number of situations—and forget the three per cent—a number of the 97 per cent will have to undergo considerable compliance costs. As I understand it—and the Parliamentary Secretary to the Treasurer (Senator Ian Campbell) might correct me if I am wrong—it is a question of valuing personal assets which may appreciate in value or which may have a resale value of more than $5,000. That seems to me to be quite a considerable compliance cost for very little benefit to revenue.

I am not sure, either—and the parliamentary secretary may examine this—whether small businesses in general are going to be benefited. Obviously, if there is the ability to roll over funds—and, as I understand it, we are only talking about $500,000 that can actually be rolled over, and, again, the parliamentary secretary may correct me—then obviously the buyer of the small business would most likely get a better deal. I am not sure whether that would always be the case, but I would have thought it would be quite probable.

I have had a look at what was said last night. The minister indicated certain things about that particular test, which I will not canvass again here. But the other matter that concerns me is the overall effect on small businesses and the fact that the government went to the election on this particular matter. I have said this before today: I am not here to give a rubber-stamp—if it comes down to me to do so, and it does not always do so—to anything the government might have said somewhere before the last election which it claims is an election undertaking and therefore has the mandate to do.

I do not know what they did precisely with the workplace relations legislation, including the unfair dismissal proposals, but I do not think the government would expect me, nor do I think anybody would expect me or anybody else—apart from, presumably, the government—to hold the flag up in support of that policy simply on the basis that it was mentioned by the government before the election.

What has happened is that the government has made a statement on small business in response to the report of the House of Representatives committee on small business. You can see what can occur. If the Senate does insist upon the amendments, I suppose that gives the government the opportunity to accuse the Senate of being anti-small business. I do not suggest, through you, Madam Chair, that Senator Ian Campbell would do that. That is probably the last thing on his mind. Nevertheless, it is a matter that has crossed my mind.

I must say that I am often persuaded by what Senator Sherry says on these matters. He certainly appears to be across his portfolio, and I congratulate him on that. But I wonder whether this is an area that we ought to insist upon here and now. The whole concept of whether the CGT is operating as it was intended to operate is a very important question.

There is evidence in the United States at the moment that there is increasing debate on tax reform. It is cutting the CGT as a means of stimulating investment and thus employment. I know a number of the United States economic policies have not worked in regard to unemployment. I raise the question: should we hold our preconceived ideas about the value of the CGT or should we have another look at that to see how much it might be a disincentive to the employment of workers? We will obviously have quite a debate on that over the next 12 to 18 months.

I can also understand the point—and I am not sure whether the government did raise the point, but I will raise it—that this amendment, if incorporated into the legislation, would be difficult to enforce. It could be readily avoided by those people keeping their assets in other entities or outside the country; and that sort of activity, which does not do the Australian economy much good, would be encouraged. Although I have said that, I am not prepared to vote for the motion that has been moved by the government. I will listen to what else is said in this debate.